Gopal Snacks Q1 FY27 earnings call

Gopal Snacks Limited delivered a robust Q1 FY27, reporting its highest-ever quarterly revenue of ₹422.3 crores, marking a 31.1% year-on-year and 3.1% sequential growth. This performance was significantly bolstered by the successful recommencement of operations at the Rajkot main facility and sustained contributions from the Modasa and Nagpur plants. The company's EBITDA more than doubled over the previous year to ₹31.5 crores, with the EBITDA margin improving to 7.4% from 4.7% in Q1 FY26, primarily due to higher sales volume and enhanced capacity utilization.

The company continued its focus on strengthening its distribution network, expanding its distributor base to over 1,000. Currently, Gopal Snacks reaches between 5.25 lakh to 5.5 lakh retail outlets and aims to increase this to 6 lakh outlets by the end of the year. The 'double service' initiative, which was restarted in January-February 2026 after a temporary pause, has shown positive results, increasing run rates for distributors by 14-25% depending on their capabilities. This strategic expansion is critical for meeting growing consumer demand and enhancing market presence.

In Q1 FY27, Gopal Snacks faced a 5% increase in raw material prices. The company successfully passed on 4.2% of this inflation to consumers through a combination of price hikes and grammage reduction. A remaining 0.8% impact on the P&L is expected to be mitigated in subsequent quarters. Management expressed confidence in its ability to manage inflationary pressures, particularly leveraging the flexibility offered by its INR 5 SKU price point to adjust grammage and maintain profitability.

The recommencement of the Rajkot main facility and the consolidation of production from the Gondal facility are pivotal for improving manufacturing efficiencies. This move is anticipated to result in lower logistics, power, and operating costs. The company expects these operational improvements to translate into enhanced service levels, better product availability, and support future growth across both existing and emerging markets, with benefits expected to materialize in the coming quarters^⏳.

Gopal Snacks is actively working on diversifying its product portfolio, with 7 new product introductions (NPIs) planned for H2 FY27. Notably, 5 of these NPIs are non-palm oil based, indicating a strategic shift towards healthier and potentially higher-margin products. In core markets, Gathiya remains the leading product, followed by Namkeen and snack pellets. The company also highlighted the significant opportunity in Gujarat, where the Gathiya market is still 65% unorganized, presenting a long-term conversion potential to packaged products.

The company provided a positive outlook for its profitability, guiding for an EBITDA margin of 8-9% for the full FY27, with an exit run rate projected to be close to double-digits. Looking further ahead, the sustainable EBITDA margin is targeted at 11-11.5%, with an average-out basis expected by mid-FY28-29. For FY28, the EBITDA margin is guided to be 10-11%, and the PAT margin is expected to be in the range of 7-7.5%, reflecting continued focus on operational efficiencies and cost control.