This news post details how Gopal Snacks, a prominent Rajkot-based snack manufacturer, is preparing for stronger growth this year. The company’s strategy is driven by two key factors: a recent GST rate cut and a significant expansion into new markets.
The reduction in the Goods and Services Tax (GST) from 12% to 5% is a major win for the company. Gopal Snacks’ CFO, Rigan Raithatha, explained that this move will boost consumer demand by making products more affordable, which in turn adds momentum to the overall consumption story in India.
The company is also strategically expanding its manufacturing capabilities by entering into long-term agreements for new plants in Karnataka and Uttarakhand. These facilities are expected to add an incremental revenue of ₹90 crore and ₹100 crore, respectively. This expansion will also help to significantly improve efficiency by reducing product delivery lead times by around 50%.
Gopal Snacks is maintaining a full-year revenue growth guidance of 15-20%, with the goal of hitting the higher end of that range. They are also forecasting EBITDA growth of 20-25%. The company anticipates achieving a volume growth of 5-6%, largely by focusing on its popular ₹5 SKUs (which make up 70% of its sales) and adjusting grammage and pricing to attract more customers.
The company is also targeting gross margins of 25-26% this year, supported by an easing of supply chain issues following a fire at its Rajkot factory.