Try:

with CteRec as
(
    select
        c.ID,
        c.CategoryName,
        Cast(c.DisplayOrder as float) as ParentDisplayOrder,
        0 as DisplayOrder,
        c.ParentCategoryID,
        c.ID as MainID,
        1 as LevelNo
        
    from tblCategory as c
    where (c.ParentCategoryID is null)
      
    union all
     
    select
        c.ID,
        c.CategoryName,
        r.ParentDisplayOrder + (Cast(c.DisplayOrder as float) / Power(10, r.LevelNo)) as ParentDisplayOrder,

        c.DisplayOrder,
        c.ParentCategoryID,
        r.MainID,
        r.LevelNo + 1 as LevelNo
    from tblCategory as c
    join CteRec as r on r.ID = c.ParentCategoryID
    where r.MainID = @ID and r.LevelNo < @LevelNo
)

select * from CteRec
order by ParentDisplayOrder

ex: @ID =  2 (Non-Beverages) and @LevelNo = 3

I hope this helps.