Subscribe to Gopal Snacks Ltd: Geojit

Geojit, IPO report on Gopal Snacks Ltd

Gopal Snacks Ltd (GSL), established in 2009, is a rapidly expanding FMCG company in India. It offers a diverse range of 'ready to eat' packaged snacks, including ethnic namkeen, gathiya, wafers, snack pellets, and other products like extruder items, noodles, spices, and flour. GSL operates under brands such as "Gopal," "Cristos," "Shot Go," and "Cornigo," boasting a product portfolio of 84 items across 276 SKUs (Stock keeping units). With distribution through 617 distributors, GSL reaches customers in 523 locations across ten states and two union territories. The company operates manufacturing plants in Rajkot, Nagpur, and Modasa. The Indian market for savoury snacks is valued at Rs.796bn in FY23 and is expected to grow at a CAGR of 11% to Rs.1,217bn by FY27E owing to surge in demand for high-value, pre-packed ‘on-the-go’ and ‘ready-to-eat’ products. GSL is the largest manufacturer of Gathiya in terms of production volume and sales revenue in India and holds a market share of ~31% for FY23 in the organized gathiya market.

Valuation and Outlook

Considering its strong topline and bottom line growth, emphasis on improving market presence, vertically integrated manufacturing facilities, lean balance sheet, healthy return ratios and promising industry outlook, we assign a “Subscribe” rating on a medium to long term basis.