MTR parent's revenue growth slows on weak demand

Orkla, which owns MTR and Eastern spices, said its revenue in India rose just 4.3% to ₹2,533 crore during the year ended December 2024, blaming high prices for basic goods placing pressure on demand, particularly in rural areas and small towns.

The performance is significantly slower than a year ago when it grew 12.1%. "The price trend was negative for the year, due to decreasing raw material prices that were passed on to customers, while volume growth was positive in both domestic and exports markets," the Norwegian parent said in its latest annual report.

Started in 1924 with the MTR restaurant by the Maiya family in Bangalore (now Bengaluru), the company diversified into the business of convenience foods and instant mixes half a century later. Norway-based Orkla entered India in 2007 by acquiring MTR Foods and, nearly five years ago, it bought a majority stake in Kerala-based spice maker Eastern Condiments.

The spice company is planning a $300 million (about ₹2,500 crore ) initial public offering (IPO) this year.

"The Indian food market, despite the recent slowdown, continues to exhibit strong market fundamentals, underpinned by a growing population, rising disposable incomes and a resulting increase in demand for quality packaged foods.

The business aims to combine operational efficiency programmes to continue to improve margins, whilst commercially driving a steady shift in product mix towards more high-margin value-added product categories," Orkla India chief executive officer Sanjay Sharma said in the report.

The consumer goods maker gets three-fourths of its sales from southern states, where it is the market leader with MTR, focusing on Karnataka and Andhra Pradesh, and Eastern Condiments dominating Kerala.

More than a year ago, the company restructured its Indian operations under one business entity, Orkla India.