Gopal Snacks shares fall over 4% on weak margin, higher expenses

The drop in the share price came after the company's expenses jumped 13.1 per cent year-on-year (Y-o-Y) to Rs 3,649.9 crore in Q2FY25, from Rs 3,227.88 crore in Q2FY24

Gopal Snacks Q2 results impact: Fast moving consumer goods (FMCG) company Gopal Snacks shares dropped as much as 4.37 per cent to hit an intraday low of Rs 420.15 per share. 

The drop in the share price came after the company’s expenses jumped 13.1 per cent year-on-year (Y-o-Y) to Rs 3,649.9 crore in the September quarter of financial year 2025 (Q2FY25), from Rs 3,227.88 crore in the same quarter a year ago (Q2FY24). 

Operational performance also remained weak to flattish as earnings before interest, tax, depreciation and amortisation (Ebitda) rose merely 2.7 per cent to Rs 467.7 crore in Q2FY25, from Rs 455.3 crore in Q2FY24. While Ebitda margin, also known as operating profit margin, squeezed 111 basis points (bps) year-on-year (Y-o-Y) to 11.62 per cent in the September quarter of financial year 2025, from 12.73 per cent in the September quarter of financial year 2024.

 

Overall, Gopal Snacks’ profit rose 6.2 per cent annually to Rs 288.9 crore in Q2FY25, from Rs 272 crore in the same quarter a year ago (Q2FY24). The company’s revenue from operations soared 12.6 per cent year-on-year (Y-o-Y) to Rs 4,026.4 crore in the September quarter of FY25, from Rs 3,576.9 crore in the September quarter of FY24.

The company added over 161 new distributors in the past six months.

The Ghathiya and Wafers segments grew 13.4 per cent and 46.8 per cent Y-o-Y, respectively. Additionally, the Focus Market achieved a growth of 29.3 per cent annually. The focus market includes Madhya Pradesh, Maharashtra, Rajasthan and Uttar Pradesh.

“With a clear vision for the future, we are well-positioned for continued growth. Our goal is to expand our market reach and strengthen our standing as a leading company in the global food industry. We remain focused on enhancing product management, meeting diverse customer needs, and boosting brand visibility. As we establish a stronger market presence, we are prepared to navigate challenges, seize opportunities, and continue delivering enhanced value to our stakeholders," said Bipinbhai Hadvani, chairman and MD of Gopal Snacks. 

Gopal Snacks dividend

Gopal Snacks Board has declared the first interim dividend of Rs 1 per share (i.e. 100 per cent) on equity shares of face value of Rs 1 each for the financial year 2024-25 (FY25). The interim dividend will be paid on or before November 12, 2024, the company said.

Gopal Snacks brokerage view
 

On October 14, analysts at Emaky initiated coverage on Gopal Snacks with a 'Buy' rating and a target price of Rs 600 per share for September 2025, based on a price-to-earnings (P/E) ratio of 40x. The current stock valuations at 32x for FY26E appear attractive, supported by an optimistic revenue outlook with a projected compound annual growth rate (CAGR) of 15 per cent from FY24 to FY27, alongside a robust earnings growth forecast of 29 per cent.

Since its IPO in March 2024, analysts at Emkay said, the management has intensified its focus by bringing in experienced professionals, which has bolstered five key growth pillars including a strong backend, production innovation and renovations, accelerated pan-India expansion with an emphasis on alternative channels, effective branding strategies, and an improved logistics infrastructure to ensure product freshness. 

Additionally, the brokerage’s on-ground assessments in key markets indicate a notable push for revenue growth, with trade partners reporting strong execution support. Given Gopal Snacks' attractive financial ratios, analysts anticipate a rebound in business growth, which should facilitate a valuation re-rating.

Gopal Snacks IPO
 

Gopal Snacks saw a lacklustre debut on the stock market, with its shares opening at Rs 350, a 13 per cent decline from its issue price of Rs 401 on the BSE on March 14. The stock was listed at Rs 351 on the National Stock Exchange (NSE).

About Gopal Snacks
 

Established in 1999, Gopal Snacks Limited is a fast-moving consumer goods (FMCG) company focusing on both ethnic and Western snacks. The company offers a diverse range of products, including traditional snacks like namkeen and gathiya, along with Western snacks such as wafers and extruded snacks. 

Additionally, Gopal Snacks provides various FMCG items, including papad, spices, gram flour (besan), noodles, rusk, and soan papdi, catering to both Indian and international markets.

The market capitalisation of Gopal Snack is Rs 5,424.03 crore, according to BSE. The company falls under the BSE SmallCap category.

At 1:14 PM, Gopal Snacks shares were trading 0.36 per cent lower at Rs 437.75 per share. In comparison, BSE Sensex was trading 0.32 per cent lower at 81,713.91 levels.