Target: ₹500
CMP: ₹284
We hosted the management team of Gopal Snacks, represented by Bipin Hadvani (MD and Promoter) and Naveen Gupta (Chief Business Officer) for domestic NDR.
We retain our Buy call on the expectation of market share recovery with 100 per cent restoration of in-house production by Q1FY26. So far, disruption from the fire has been managed well with a quick shift in production to 3P (now about 8-10 per cent of production) and a gradual shift back to own capacities. Modasa plant capacity augmentation is expected to be on stream from July 1. While actions are underway to recoup business in Gujarat with production ramp-up, the management has maintained its focus on enhancing fundamentals like gradual onboarding into quick commerce, entry in large modern trade, and expansion in the vending machine channel.
The company will face dual pressure of topline and margin in Q4, while full recovery with the return of growth and margin recoup is likely from Q3FY25. Management remains attentive to maintaining business fundamentals, which reflects in dealer connects and is further enhanced by relevant actions in the portfolio and supply chain.
Key risk to our call is the company’s inability to recoup market share on 100 per cent production recovery.