Gopal Snacks Eyes 11% Ebitda Margin In FY26 After Subdued Third Quarter Performance

Gopal Snacks Ltd. is aiming for an Ebitda margin of 11% in fiscal year 2025-26 despite challenges seen in the quarter ending December 2024.

Speaking to NDTV Profit, company's Chief Executive Officer Raj Bipinbhai Hadvani attributed the subdued third quarter performance to disruptions at its Rajkot plant, which was impacted by a fire accident.

In fiscal 2026, the margin will stabilise at 11%, and "we will protect that margin", Hadvani said.

In the December quarter, Gopal Snacks' net profit fell by 70.3% year-on-year to Rs 5.3 crore, while revenue from operations grew by 7.1% YoY to Rs 393.6 crore. The company clocked an Ebitda of Rs 15.5 crore with a margin of 3.9% in comparison to 9.6% in the year-ago quarter.

The downturn was largely due to a fire incident at its Gujarat plant, which was responsible for about 70% of the company’s total production.  

“The fire disrupted operations in Q3, but we’ve already recovered 65-70% of the lost revenue and expect to reach over 90% recovery by the end of March,” Hadvani said.

The top executive mentioned while the unit was fully covered by insurance, it is yet to receive the full claim amount. 

Commenting on inflationary pressure, Hadvani acknowledged the impact of rising palm oil and potato prices, which contributed to the decline in company's margin in the third quarter. However, there seems to be some improvement on the front.

Hadvani said that palm oil prices are stabilising and the new crop of potatoes will further help the company improve its margins. 

Gopal Snacks has been taking steps to counter the impact of inflation, he said. “We have reduced a few grammages in our products, and we have changed the packaging size as well."

The company is also working on expanding its distributor network in the non-core states to drive growth, he pointed out.

"We are expanding our distributors in non-core states, which are Jharkhand, Uttar Pradesh, Chhattisgarh, Telangana. So, we are adding more and more distributors, mostly 30-plus distributors in a month," he said. 

Shares of Gopal Snacks were trading 2.89% lower at Rs 287.40 apiece as of 10:56 a.m., compared to a flat Nifty 50 at 22,550.65.