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Gopal Snacks Limited Q1 FY '25 Earnings Conference Call Summary
Submission Details • Date of submission: July 29, 2024 • Conference call date: July 24, 2024 • Compliance with SEBI regulations
Key Executives Present • CEO: Raj Hadvani • CFO: Mukesh Shah
Financial Performance Highlights • Revenue Growth: 11% year-over-year to INR 354 crores • Gross Profit Margin: Decreased to 29% due to rising raw material costs • EBITDA: INR 41 crores (11.5% margin) • Net Profit After Tax (PAT): INR 24 crores (6.9% margin)
Operational Insights • Expanded distribution network with over 170 new distributors • Significant growth in Gathiya and Wafers segments • Record revenue in Wafers segment
Management Strategies • Addressed rising raw material prices and product grammage adjustments • Planned 4-5% grammage correction in Gujarat portfolio by September • Focus on enhancing sales and distribution through new markets and channel partners
Market Dynamics • Observed decline in Gokul Snacks operations, with former partners returning to Gopal Snacks • Targeting double-digit revenue growth and EBITDA margin guidance of 11-13%
Strategic Partnerships • Agreements with channel financing firms for working capital management • Expansion in modern trade and railways, with revenue projections exceeding INR 20 crores annually
Growth Focus Areas • Key markets: Maharashtra, Madhya Pradesh, Uttar Pradesh, Rajasthan • Strong performance in Gathiya and namkeen products (21% revenue increase)
Revenue and Distribution Management • Revenue per distributor may decrease temporarily during expansion • 15% of dealers below break-even threshold, with support programs in place • E-commerce and quick commerce currently minimal contributors to revenue
Future Outlook • No immediate plans for new facilities; current utilization at 35-40% • Anticipated revenue growth of 10-12% for FY25 • Revenue growth primarily from distribution expansion, not new products
Pricing and Marketing Strategies • Family pack pricing aligned with market competition • Confidential marketing campaign details in progress • Inventory management with an average holding period of 40-45 days
Conclusion • The call concluded with no further questions, emphasizing the company's focus on sustainable growth and stakeholder value enhancement.
Gopal Snacks Limited Q4 FY2024 Earnings Conference Call Summary
Conference Call Details • Date: May 13, 2024 • Participants: CEO Raj Hadvani, CFO Mukesh Kumar Shah • Focus: Operational and financial performance for Q4 and FY2024
Financial Performance Highlights • Q4 Revenue: 8% increase in operational revenue • Gross Margins: Stable at 28% • EBITDA Margins: Decreased from 13% to 11% • Annual Revenue: Flat at INR 1,400 crores • Key Growth Areas: Strong performance in Gathiya and wafer segments
Future Outlook • Growth Plans: Enhance market presence in various regions • Target for FY '25: Double-digit growth in rural and urban markets • Marketing Spend: Increase to 2% of revenue
Q&A Session Insights • Margins: Expected stabilization of gross profit margins between 27% and 28% • Competitive Landscape: Strong market presence despite local competition • Wafer Segment Growth: Significant growth anticipated, currently underrepresented • Market Share: Less than 1% overall, under 2% in key states
Operational Strategies • Capacity Utilization: Currently at 35-36%, with capex planned after reaching 75-80% utilization • Debt and Working Capital: Net debt of INR 65 crores, temporary increase in working capital due to inventory buildup • Dividend Payout: Confirmed at 25%, with future distributions based on performance
Market Dynamics • Sales Mix: 25% urban and 75% rural • Product Mix: Strong and diverse offerings to facilitate market entry • New Product Launches: Driven by market demand, contributing 7-8% to total revenue
Regulatory Compliance • SEBI Requirement: Plan to reduce promoter holding from 81.48% to 75% within three years
Closing Remarks • Mukesh Shah thanked participants and encouraged follow-up questions. The call concluded with appreciation for attendance.
Gopal Snacks Limited Earnings Conference Call Summary
Overview • Date: April 4, 2024 • Focus: Unaudited financial results for Q3 and nine months ending December 31, 2023 • Participants: CEO Raj Hadvani and CFO Mukesh Kumar Shah
Company Profile • Leading manufacturer in the Indian savory snacks market • Diverse product portfolio and robust distribution network • Significant growth through: • Backward integration • Efficient logistics • Affordable products (INR 5 SKU constitutes 70% of revenue)
Financial Performance Highlights • Q3 FY24: • Revenue: INR 368 crores • Gross Profit: INR 96 crores • EBITDA: INR 35 crores (decline in margin from 16% to 10%) • Nine months ending December 31, 2023: • Revenue: INR 1,044 crores • Gross Profit Margin: 29% • EBITDA Margin: 12% • Key factors affecting performance: • Increased retailer margins and overhead costs • Fluctuating raw material prices (palm oil down 23%, chana up 24%)
Growth Strategies • Expansion of sales team with FMCG professionals • Focus on corn-based snacks and export opportunities (UK, Canada) • Plans for deeper market penetration in Gujarat • Enhanced branding efforts and participation in exhibitions
Market Insights • Ethnic snacks contribute 56% of revenue; growth potential in core markets • Western snacks (including wafers) account for 31% of revenue • Management optimistic about future EBITDA margin improvements
Capacity and Utilization • Current capacity utilization at 40%, with potential to reach 80-85% in 2-3 years • Low utilization in Nagpur unit (13%) due to diverse offerings • Gradual sales growth anticipated, with plans to expand into new states
Inventory and Cash Flow • Rising inventory days attributed to raw material stockpiling • Strong cash generation allows flexibility in funding growth
Conclusion • Management expressed gratitude for participant engagement • Open invitation for further questions from investors and analysts