Srivari Spices and Foods: Blending Tradition with Innovation for Robust H1 FY26 Growth

Srivari Spices and Foods Limited, a prominent FMCG player headquartered in Hyderabad, has reported a strong financial performance for the first half of fiscal year 2026 (H1 FY26). The company, known for its wide range of food products including flours, spices, instant mixes, and edible oils, announced its unaudited financial results, showcasing significant growth across key metrics. Total income for H1 FY26 surged by an impressive 49.09% year-on-year, reaching 78.77 crore. This robust top-line growth was accompanied by a substantial increase in profitability, with EBITDA climbing by 52.65% to 13.43 crore and Profit After Tax (PAT) rising by 46.66% to 7.20 crore. The EBITDA margin also saw a healthy improvement, expanding by 40 basis points to 17.05%, reflecting the company's focus on operational efficiency and sustained demand.

Performance Highlights and Segmental Dynamics

The strong H1 FY26 performance was primarily driven by consistent demand and widening distribution reach in both the flour and spices segments. Srivari's strategic initiatives, including ongoing capacity expansion and process automation, played a crucial role in improving operational efficiency and sustaining these healthy margins. The company's focused marketing efforts and increasing penetration across South Indian markets further fueled volume growth.

In terms of revenue contribution, the Atta segment emerged as the largest contributor, accounting for 50% of the total H1 FY26 revenue. Spices and Masalas followed closely, contributing 45%, while the newly launched Oil segment made up the remaining 5%. This diversified revenue mix underscores the company's balanced portfolio strategy.

Strategic Initiatives and Future Outlook

Srivari Spices and Foods Limited is actively pursuing several strategic initiatives to sustain its growth trajectory and expand its market footprint. A significant move is the planned launch of a new business vertical dedicated to puja articles, devotional goods, festival-related items, and allied products under the brand 'Neihaa Narayan'. This initiative, slated for January, aims to tap into the largely unorganized yet high-potential market for devotional products, leveraging the company's reputation for quality and authenticity. Management views this as a high-margin segment with significant growth opportunities, with minimal initial capital expenditure as some products will be sourced externally.

Another key initiative is the recent launch of Soya Chunks, marking the company's entry into the high-growth, health-focused food category. While currently in the repacking phase, Srivari plans to establish its own manufacturing plant for Soya Chunks by FY27. This move aligns with the increasing health awareness and protein consumption trends in India, positioning soya chunks as an economical and versatile protein source. The company also recently launched its edible oil plant in May 2025, with products introduced in Mumbai and Maharashtra in July. The oil segment is currently at an EBITDA breakeven, but management anticipates improved margins and a utilization rate of up to 30% in H2 FY26, driven by exclusive deals with e-commerce platforms like Big Basket and Amazon, alongside general and modern trade distribution.

Geographical expansion remains a strategic priority, with plans to penetrate new states such as Gujarat, Karnataka, and Odisha. However, the company is adopting a pragmatic approach, prioritizing portfolio expansion within its existing strong distribution network in Andhra Pradesh and Telangana over aggressive geographical expansion into highly competitive new states, which can be costly and time-consuming. This strategy aims for more efficient market penetration and quicker revenue generation. Furthermore, Srivari is strengthening its B2B business through partnerships, notably with Jumbotail, serving around 3,000 stores, which enhances its distribution reach.

Management Commentary and Investor Confidence

Mrs. Neihaa Rathi, Chairperson & Whole Time Director, expressed satisfaction with the strong H1 FY26 performance, attributing it to healthy growth across all product segments and the company's unwavering focus on quality, purity, and consumer trust. She emphasized that Srivari is well-positioned to sustain its growth trajectory, backed by a robust financial position, efficient manufacturing capabilities, and a clear roadmap for expansion. Management also acknowledged that while a previously guided 100% revenue growth for FY26 might see some delays, they remain optimistic about maintaining strong growth and a 17% EBITDA margin going forward.

Srivari Spices and Foods Limited continues to demonstrate strategic clarity and disciplined execution. The company's ability to diversify its product basket, scale up automation, and enhance retail reach, while maintaining a strong focus on core values, positions it favorably for sustained profitable growth. The strategic entry into new, high-potential segments like devotional products and health-focused foods, coupled with a cautious yet determined approach to geographical expansion, reinforces investor confidence in its long-term value creation potential.