Gopal Snacks Plans Product Overhaul To Boost Margins
Aiming to bring down the revenue share of lower priced products to 50–60% from the current 70%, the firm will launch more large-pack products at higher price points.
Gopal Snacks Ltd. is targeting 14.5% margins by the financial year 2026–27 on the back of a change in its product mix and base expansion, the company’s Chief Financial Officer Mukesh Kumar Shah said.
In the second quarter, the Ebitda margins of the snacks maker declined to 11.6% compared to 12.7% in the year-ago period. However, it remained within the guidance of the 11–13% range.
Talking about the company’s growth plans, Shah told NDTV Profit that the revenue contribution from its Rs 5 SKU (stock-keeping unit) will decline slowly.
These lower priced products currently contribute to 70% of Gopal Snacks’ revenues. Shah said that the company is aiming to bring this number to 50–60%, by launching more large-pack products at higher price points.
“In the higher packs, you have the opportunity to do price increases, etc.,” Shah said.
The top executive added that Gopal Snacks is also exploring options to sell its products through alternate trade channels like e-commerce and quick commerce platforms.
The company’s wafer segment, with an annual run rate of Rs 200 crore, is growing at a fast pace and is close to 40% in terms of volume, Shah noted.
“We expect this volume to grow at a similar pace in the years to come. It has a higher gross margin compared to any other product in our basket,” he added.
“All this is going to give us higher margins in FY26 and FY27. We expect it to go to the range of 14.5% by FY27,” the CFO said.
On the growth outlook for FY25, Shah said H2 will be better than the first half. “The festive season buildup in Q3 has already seen our footprint expansion in our focus market. We have made a lot of effort in our core market, where we had a 6% growth in Q2 and 3% growth in Q1, and we definitely will have a higher growth in Q3 and Q4 there,” he said.
Gopal Snacks witnessed a 6% increase in net profit, reaching Rs 28.89 crore in Q2 this year, up from Rs 27.21 crore in the same period last year. Revenue grew by 12.6% year-on-year Rs 402.64 crore for the quarter.
Shah attributed the drop in margin to the rising costs of raw materials like chana and palm oil.
Shares of Gopal Snacks closed 0.11% higher at Rs 439.10 apiece on Tuesday, with the benchmark Nifty 50 closing 0.28% lower.
