Gopal Snacks Limited (GOPAL) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Gopal Snacks Limited Earnings Call hosted by Emkay Global Financial Services Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Nitin Gupta from Emkay Global Financial Services Limited. Thank you, and over to you, sir.

Thanks, Vishan. Good afternoon, everyone. I would like to welcome the management and thank them for this opportunity. We have with us today Nina Advani, Chairman and Managing Director; Navin Gupta, Chief Business Officer; and Rigan Raithatha, Chief Financial Officer. I shall now hand over the call to the management for the opening remarks. Over to you, sir.

Thank you, Nitin. Good afternoon, and thank you for joining us for the earnings call. We hope you all got a chance to go through our investor presentation uploaded on the stock exchange. We will share our key operating and financial highlights for the quarter and half year ended September 30, 2025. Q2 FY 2026 was a quarter of steady progress and operational enhancement for Gopal Snacks. Our focused application and discipline cost--cost management enabled us to deliver improved profitability sequentially, reflecting the better life resilience of our business model. Revenue from operations to that 375.7 growth up 15.6% quarter on quarter, supported by a strong traction in other products segmented a steady recovery in the core portfolio. The digital margin is 6.4%, reflecting the benefits of operational efficiencies and prudent cost control. While our gross margin expanded to 26.4% amid easing input costs. For F1, FY 2026 revenues stood at INR 697.8 crore with EBITDA margin at 5.6% despite continued impact from the Rajkot one facility prior. During the quarter, we received an entering insurance payment of INR 19.994 related to Rajkot facility with reinstatement work currently underway. Our founder unit continues to ensure uninterrupted production and supplies, reinforcing our requesting resilience. To further strengthen our regional footprint, we have entered into long term agreements for 3rd party manufacturing facilities at [indiscernible] Karnataka and Kashipur, Uttarakhand. Whether these facilities add over 10,000 metric tons per enough capacity, enabling us to serve dozens and dozens dozen markets more efficiency and reduce lead time. We also focused on enhancing brand presence and consumer engagement during the quarter. Our association as the official snack partner for the Filmfare Awards 2025 significantly elevated Gopal's net brand recruiting across the region. Digital and social media platforms alongside refreshed packaging, improved visibility at airports and modern trade outlets, and increased participation in festival festive promotions as further Canada band recall and market reach. Operationally, the Modasa plant ramped up slightly, improving distribution coverage across Gujarat, Rajasthan, Maharashtra and Madhya Pradesh. Our advanced distribution management system and you have two integration as streamline dealer level visibility and enhanced inventory planning resulting in improved service level across core and focus markets. By 2026, we had 858 active distributors reflecting steady expansion and better on ground. Looking ahead, our priorities remain centered on expanding market presence, driving efficiency through technology integration. And innovative across product lines, we continue to explore new opportunity in under penetrated regions. While our sustained investment in branding and distribution. Help us to extend incremental growth in India's fast evolving package black markets. With the Terminal Operational Foundation expanding capacity base and a growing distribution network, Gopal net is well positioned to deliver sustainable growth and enhanced value for all stakeholders in the quarter, right. I would now like to invite our Chief Financial Officer, Mr. Rigan Raithatha, to share his perspective on the financial performance during the quarter.

Thank you Naveen. So good afternoon everyone. Let me take you through the key financial highlights for the quarter and half year ended 30th September 2025. First, starting with the quarterly performance. So during Q2 FY22, we achieved revenue from operations of INR 375.7 crores, registering of 16.6% sequential growth. Gross profit for the quarter ended at 99.2 crore, translating to a gross margin of 26.4% compared to 26% in the previous quarter. Gross profit was driven mainly by the subsiding income and the steady raw material prices. Data for the quarter was 24.1%, reflecting a margin of 6.4% sequentially. Margin expansion was 88 by operating leverage and prudent control over discretionary spend. Profit after tax to that 25.7%, resulting in a fat margin of 6.8% for the quarter. This includes the exceptional income of rupees INR 21.5 crores nearly due to interim insurance payment received from insurance earning on the top of fire in our ASCO facility. Now moving on to the half yearly performance. For F1 25-26, revenue from operations to at INR 69.6978 crores while EBITDA came at 39.4% reflecting a margin point 5.6%. Profit before tax. Before exceptional items to get INR 18.7 crores while profit after tax was INR 28.62 crores with a margin of 4%. Y-O-Y margin for the period for the half year and for the quarter were impacted due to raw material price inflation mainly due to the duty impact. Our sequential improvement demonstrates the success of our cost saving initiatives and stable performance from our alternate production these. As we look forward for the next half of the financial year, our Modasa plant has started the trial production and benefit of which will be shown partially in our Q3 results and fully in Q4. As we look ahead, our strategy remains focused for expanding market presence, improving operational efficiency and driving innovation across our core and emerging product strategy. It's a solid financial based retail and manufacturing network and disciplined capital allocation. Gopal financial is well positioned to sustain its growth momentum in the coming quarter. Thank you. Over to you Nitin. [Foreign Language]

[Operator Instructions] Thank you very much. We will now begin the question and answer session. [Operator Instructions] The first question is from the line of Nitin Gupta. From Emkay Global Financial Services Limited.

Yeah. Thanks for taking my question. My first question for-- given the GST rate reduction. So like other FMCG companies have also noted that there was a trade related disruption. So of the 7% decline in our top line, how much of this would be attributed to GST related pickups?

[Foreign Language]

[Foreign Language] Percentage pressure because of this.

[Foreign Language]

Sure. Thank you. And [Foreign Language] with respect to your Modasa commissioning, first of all congratulations and this is Modasa commissioning of my delayed [Foreign Language] sort of post festive season [Foreign Language] What exactly? How exactly the second-half going to look like?

[Foreign Language]

The next question is from the line of Resha Mehta from Green Edgewell. Please go ahead.

Thank you. [Foreign Language]

[Foreign Language] Got my point.

Yeah, yeah, sure. Understood.

[Foreign Language] totally just initially. Benefit [Foreign Language] Amaran lost consumer base to support extra. We'll say subsequent. [Foreign Language]

[Operator Instructions] The next question is from the line of Ishant Lalwani from Ashika institutional equity. Please go ahead.

Good afternoon, Sir. Your last year actually mentioned [Foreign Language] [Technical Difficulty] [Foreign Language]