Gopal Snacks has announced a third-party manufacturing agreement for a new production facility in Manendragarh, Chhattisgarh. This development aims to expand the company's manufacturing capabilities and geographical presence.

Manufacturing Facility Details

The new facility focuses on wafer production, with the following specifications:

Strategic Benefits

The establishment of this manufacturing facility is expected to deliver several operational advantages:

• Boost overall operations
• Provide enhanced supply chain flexibility
• Enable better market penetration in the region
• Improve distribution capabilities

Operational Impact

The facility's dedicated capacity of 2,240 metric tonnes per annum for wafer production aims to meet growing market demand. The third-party manufacturing model allows Gopal Snacks to expand its production capabilities without significant capital investment in infrastructure, potentially enabling more efficient resource allocation and operational scalability.

This strategic move is intended to strengthen Gopal Snacks' market position and enhance its ability to respond to consumer demands in the region.

Gopal Snacks Limited , a prominent player in the Indian snack food industry, has reported a mixed bag of results for the second quarter of fiscal year 2026. The company achieved a revenue of INR 375.70 crores in Q2 FY26, marking a 16.6% sequential growth from the previous quarter. However, the company acknowledged that it will not meet its annual revenue guidance of INR 1,750.00 crores due to operational challenges.

Financial Highlights

• Revenue from operations stood at INR 375.70 crores in Q2 FY26
• EBITDA margin improved to 6.4%
• Gross margin expanded to 26.4%
• H1 FY26 revenue at INR 697.80 crores with EBITDA margin at 5.6%

Operational Updates

Gopal Snacks faced several operational challenges during the quarter:

1. Delayed Plant Commissioning: The Modasa plant, which was expected to start operations in July-August, began trial production only in November. This delay significantly impacted the company's ability to meet its annual revenue guidance.

2. Supply Chain Disruptions: The company experienced supply chain issues, particularly affecting its core markets in Gujarat and focus states like Rajasthan and Maharashtra.

3. Capacity Utilization: Current capacity utilization stands at 41% to 45%, with the company aiming to reach 70% utilization in the next 2 to 2.5 years.

4. Product Mix: The company is working on improving its product mix, with a focus on reducing dependency on palm oil-based products by 25% over the next 3 to 5 years.

Insurance Claim and Facility Reinstatement

Gopal Snacks received an interim insurance payment of INR 19.99 crores related to the Rajkot facility fire incident. The company expects to receive similar amounts in subsequent installments as the reinstatement work progresses.

Expansion and Future Outlook

Despite the challenges, Gopal Snacks is pushing forward with its expansion plans:

1. New Manufacturing Agreements: The company has entered into long-term agreements for third-party manufacturing facilities in Hiriyur (Karnataka) and Kashipur (Uttarakhand), adding over 10,000 metric tons per annum of capacity.

2. Product Innovation: New products like popcorn and wafer biscuits have been launched, with plans to expand these offerings across India.

3. Distribution Network: The company aims to increase its distribution network and market penetration, particularly in Gujarat and within a 350 km radius of its Nagpur facility.

4. E-commerce and Modern Trade: The company reported significant growth in e-commerce sales, increasing from INR 1.00 crore in H1 last year to INR 3.50 crores in H1 this year.

Naveen Gupta, Chief Business Officer of Gopal Snacks, stated, "Despite a dynamic market environment, we continue to strengthen our manufacturing footprint, deepen market penetration, and enhance supply chain efficiency. Our focused execution and disciplined cost management enabled us to deliver improved profitability sequentially, reflecting the underlying resilience of our business model."

While the company faces short-term challenges, its management remains optimistic about long-term growth prospects, focusing on expanding market presence, driving efficiency through technology integration, and innovation across product lines.

Challenges Ahead

Gopal Snacks needs to address several challenges to regain its growth momentum:

1. Stabilizing supply chain operations
2. Ramping up production at the Modasa plant
3. Expanding market share in focus states
4. Improving capacity utilization across facilities

As Gopal Snacks navigates through these operational hurdles, investors and industry observers will be keenly watching the company's performance in the coming quarters to see if it can regain its growth trajectory and meet its long-term objectives.