Homegrown snacks company Gopal Snacks management highlighted the company’s 12-month performance (FY24) compared with FY23 in an earnings call this week. The Rajkot-based snack-maker’s revenue remained flat at Rs 1,400 crore and gross margin remained stable at 28.5% and EBITDA margin was at 12% compared to 14% of the previous year while gross profit margin remained stable at 28% but EBITDA dropped by 2%. There has been increase in overhead cost while revenue remained flat. The increase has happened in salary cost and marketing cost which was close to Rs 32 crores and that is the reason why the EBITDA has come down.
The company’s CFO Mukesh Shah said during the call, “Overall, just to give a key highlight of our Q4 performance, I would say within ethnic segment which is our key segment, our revenue from Gathiya has grown. Revenue from Gathiya product has increased by 5% year-on-year in Q4 versus the previous year. In western Snacks, our wafer which is our profit selling product has increased by 40% year-on-year versus the previous year.”
CEO Raj Hadvani said, “…Gopal Snacks has continued its leadership position, while ensuring that the building blocks are in place to grow in the focus areas that we have set for ourselves. Our leadership position as India’s largest Gathiya manufacturer continues to remain strong and growing in line with the market. Additionally, we are making strong strides in the wafers segment both on volume, as well as revenue.” Hadvani highlighted its focus markets such as Rajasthan, Maharashtra, Madhya Pradesh and Uttar Pradesh which have shown strong revenue growth of almost 37% year-on-year in the last quarter. “We have also been focusing on improving our product mix and our efforts of increasing the INR10 pack are also yielding good results with almost 42% Y-o-Y growth in the number of packets sold in Q4 FY24,” he added.
Gopal Snacks had three new product launches in the past three months as it deepens its product offerings.
Hadvani also said that one of the key drivers of the growth in the snacks foods business is its distribution strength. Gopal Snacks has expanded its distribution network to 667 distributors now and increased its retail touchpoint to over 5.50 lakh as on FY24.
The company will continue to enhance its presence in its core market of Gujarat by focusing on capturing market share in wafers category, accelerating penetration in the focus market such as; Maharashtra, Rajasthan, MP and UP and pushing its expansion into newer markets such as Jharkhand, Chhattisgarh, Telangana and Karnataka.
Shah said that as they move forward, Gopal Snacks plan to increase marketing expenditures. “We have planned to increase approximately 2% of revenue, which is currently less than 1%. The increase in marketing spend will be offset by the operating leverage from fixed overheads which we have already incurred in our Nagpur and Modasa plant. We will also be benefited by saving from various initiatives such as our renewable energy installation like solar, windmill and boilers and host of backward integration facilities which we have. So, we will get a good amount of savings coming from these facilities which will offset the increase in our marketing and branding cost.”