Gopal Snacks , a leading FMCG company known for its high-quality snack products, has announced a significant expansion of its production capabilities through long-term agreements with third-party manufacturing facilities in Karnataka and Uttarakhand.

Strategic Expansion in Southern and Northern India

The company has entered into agreements for two facilities:

1. Hiryur, Karnataka Facility:

   • Installed Capacity: 4,400.00 MTPA
   • Product Focus: Wafers, Snack Pallets, and Corn Products
   • Strategic Aim: Strengthen presence in Southern India

2. Kashipur, Uttarakhand Facility:

   • Installed Capacity: 5,900.00 MTPA
   • Product Focus: Namkeen (including Gathiya), Snack Pallets, and Corn Products
   • Strategic Aim: Enhance market penetration in Northern India

Enhancing Supply Chain Flexibility and Market Reach

Mr. Bipin Hadvani, Chairman of Gopal Snacks, commented on the strategic move: "The establishment of these facilities in Hiryur and Kashipur marks a significant step in our journey to build a stronger and more flexible supply chain. By leveraging strategic partnerships through third-party arrangements, we are enhancing our ability to serve customers across India while maintaining the quality and scale that our brand is known for."

Strengthening Distribution Network

These new manufacturing agreements are expected to:

• Deepen market penetration in key regions
• Strengthen relationships with dealers and distributors
• Improve service to trade partners
• Ensure continued growth momentum

About Gopal Snacks

Gopal Snacks is a prominent manufacturer of packaged snacks in India, offering a diverse portfolio including gathiya, namkeen, wafers, snack pellets, extruded snacks, and other products such as papad, besan, spices, and bakery items. The company operates six manufacturing facilities supported by in-house cold storage and a network of ancillary units.

With an extensive distribution network of over 850 distributors and nearly 300 owned logistics vehicles, Gopal Snacks ensures wide reach for its products. The company also exports to markets including Canada, the UAE, the UK, and the USA.

Gopal Snacks is committed to sustainability through renewable energy adoption and resource efficiency, aiming to drive growth, enhance product appeal, and capitalize on evolving consumer preferences in the growing packaged foods industry.

This strategic expansion through third-party manufacturing agreements demonstrates Gopal Snacks' commitment to growth and its ability to adapt to market demands while maintaining its focus on quality and customer satisfaction.

Gopal Snacks Limited , a prominent player in the Indian snack food industry, has released its financial results for the first quarter, revealing the impact of recent supply chain disruptions on its performance.

Revenue and Profitability

The company reported revenue of Rs. 322.20 crores for Q1, marking a 9% year-over-year decline. This downturn is primarily attributed to supply chain disruptions stemming from a fire at its Rajkot plant in December. Despite the setback, Gopal Snacks managed to achieve a sequential growth of 1.7% compared to the previous quarter.

The company's profitability took a significant hit, with EBITDA margin dropping to 4.7% from 11.5% in the previous year. Gross margins also fell to 26% from 29%, reflecting the challenges faced during the quarter.

Operational Highlights

• The Gondal unit, serving as a replacement facility, is now operating at over 60% utilization.
• Management expects the new Modasa plant to begin trial production by mid-September, which will restore 60% of lost Rajkot capacity.
• The company plans to add 60-70 new distributors by December and has stepped up marketing efforts with refreshed packaging and enhanced store visibility.

Supply Chain Challenges and Recovery

Naveen Gupta, Chief Business Officer, explained the impact of supply chain issues: "Typically, when we talk about supply chain challenges, a distributor expectation is to fulfill his product basket need from one single location largely. Before the fire incident, we were just manufacturing wafers only from Modasa facility and rest everything was manufacturing at Rajkot."

The company is working to mitigate these challenges by optimizing production across its facilities. The Modasa plant is expected to play a crucial role in normalizing operations, with trial production set to begin in mid-September.

Financial Outlook

Despite current challenges, Gopal Snacks maintains its guidance for 20% revenue growth, targeting Rs. 1,750.00 crores in total revenue. Rigan Raithatha, Chief Financial Officer, stated, "We are very hopeful that we should be having higher gross margins as compared to the last financial year."

The company expects to see improvements in EBITDA margins in the coming quarters, particularly as the Modasa facility becomes operational in Q3.

Product Portfolio and Market Expansion

Gopal Snacks is focusing on diversifying its product range, with recent introductions including popcorn and wafer biscuits. The company is also exploring opportunities in the bakery category and considering strategic partnerships for potential international expansion.

Conclusion

While Gopal Snacks faces short-term challenges due to supply chain disruptions, the company's management remains optimistic about its growth prospects. With the imminent commissioning of the Modasa plant and ongoing efforts to strengthen its distribution network, Gopal Snacks aims to overcome current hurdles and return to its growth trajectory in the coming quarters.

Investors and market observers will be keenly watching the company's performance in the second half, as it works to realize its ambitious revenue targets and improve profitability.