| Gopal Snacks Limited | ||||||
| Ratings reaffirmed at 'Crisil A / Stable / Crisil A1 '; Rated amount enhanced for Bank Debt | ||||||
| Rating Action | ||||||
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| Note: None of the Directors on Crisil Ratings Limited’s Board are members of rating committee and thus do not participate in discussion or assignment of any ratings. The Board of Directors also does not discuss any ratings at its meetings. | ||||||
| 1 crore = 10 million | ||||||
| Refer to Annexure for Details of Instruments & Bank Facilities |
Detailed Rationale Crisil Ratings has reaffirmed its ‘Crisil A/Stable/Crisil A1’ ratings on the bank facilities of Gopal Snacks Ltd (GSL).
The rating reaffirmation factors in the healthy business risk profile, as reflected in revenue of Rs 1,468 crore in fiscal 2025, as against Rs 1,402 crore in fiscal 2024, despite a fire incident. Operating margin moderated to 7.19% from 12.06% due to the fire and volatility in raw material prices. The working capital cycle is efficiently managed, as indicated by gross current assets (GCAs) of 56 days as on March 31, 2025.
Networth was healthy at Rs 401.7 crore and gearing and total outside liabilities to tangible networth (TOLTNW) ratio were comfortable at 0.17 time and 0.33 time, respectively, as on that date. Gearing and TOLTNW ratio are expected at similar levels over the medium term amid no debt-funded capital expenditure (capex) plans. Debt protection metrics were robust, as reflected in interest coverage and net cash accrual to total debt (NCATD) ratios of above 32 times and 0.69 time, respectively, in fiscal 2025. Liquidity will remain strong over the medium term, backed by healthy cash accrual and moderately utilised bank limit.
The ratings continue to reflect the established distribution network of GSL, its strong brand in lower and middle-income customer segments, and a healthy financial risk profile supported by efficient working capital management. These strengths are partially offset by exposure to intense competition, geographical concentration in the revenue profile and volatility in raw material prices. |
Analytical Approach Crisil Ratings has considered the standalone business and financial risk profiles of GSL. |
Key Rating Drivers - Strengths Established distribution network and strong brand The three-decade-long experience of the promoters in the packaged snacks business and the strong network of over 852 dealers of the company across Gujarat, Rajasthan, Madhya Pradesh, Uttar Pradesh, Rajasthan and other states will continue to aid the business risk profile over the medium term. Strong position in the value-for-money segment has helped the company to build healthy brand in the lower and middle-income groups. GSL continues to be the market leader in gathiya, which accounts for around 27% of its revenue. However, income from other products such as wafers is expected to grow with continuous capacity addition. Despite the fire in the company’s primary manufacturing facility, revenue increased to Rs 1,468 crore in fiscal 2025 from Rs 1,402 crore in fiscal 2024 and will likely grow at a moderate pace over the medium term with addition of new products and increase in geographic presence.
Healthy financial risk profile Gearing and networth were strong at 0.17 time and Rs 401.7 crore, respectively, as on March 31, 2025. Debt protection metrics were robust, as reflected in interest coverage and NCATD ratios of above 32 times and 0.69 time, respectively, in fiscal 2025. With no debt-funded capex plans, gearing is expected to remain stable over the medium term on the back of sufficient accretion to reserve and prudent working capital management.
Efficient working capital management The GCAs were around 56 days as on March 31, 2025, owing to credit of less than a week given to customers. As bulk of the raw materials are procured locally, the company maintains inventory of 30-45 days. The inventory fell to 42 days as on March 31, 2025, from 61 days as on March 31, 2024. The company sources majority of its raw material on cash payment basis, as seen in payables of 6 days as on March 31, 2025. |
Key Rating Drivers - Weaknesses Susceptibility to volatility in raw material prices The Ebitda (earnings before interest, tax, depreciation and amortisation) margin moves in tandem with the prices of raw materials such as pulses, flour, chana, palmolein oil, spices, seasonings and packaging materials. Sustaining profitability amid sudden input price hikes will be monitorable. The operating margin fell to 7.19% in fiscal 2025 from 12.06% in fiscal 2024 owing to the fire incident and impact of raw material prices. The operating margin remained modest in the first quarter of fiscal 2026 and will remain monitorable over the medium term.
Exposure to intense competition and geographic concentration in revenue The company mainly operates in the Gujarati namkeens segment and faces direct competition from other well-known retailers such as Everest Namkeen, Real Namkeen and Balaji wafers. Though the management has taken steps to expand geographical reach, around 70% of the revenue comes from Gujarat. |
Liquidity Strong Bank limit utilisation was low at 26.61% on average for the 12 months through May 2025. In the absence of debt obligation, expected annual cash accrual of Rs 100-120 crore will aid the liquidity over the medium term. Current ratio was healthy at 1.98 times as on March 31, 2025. |
Outlook Stable Crisil Ratings believes GSL will continue to benefit from the extensive experience of the promoters, its established market position and a strong financial risk profile over the medium term. |
Rating sensitivity factors Upward factors
Downward factors
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About the Company Based in Rajkot, Gujarat, GSL was set up as a partnership (Gopal Gruh Udyog) in 1999. The firm was reconstituted as a private limited company in 2009. Promoted by Mr Bipin Hadvani and his family, GSL manufactures ready-to-eat packaged snacks and food pellets under the brand Gopal. The company was listed on the Bombay Stock Exchange and the National Stock Exchange in March 2024. |
Key Financial Indicators
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Any other information: Not applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instrument(s)
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| Annexure - Rating History for last 3 Years | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Annexure - Details of Bank Lenders & Facilities | ||||||||||||||||||||
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Criteria Details
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