Crisil Ratings revises rating outlook of Gopal Snacks to 'negative'; reaffirms ratings at 'A/A1'

The agency has reaffirmed the company's short-term rating at ?Crisil A1?.

Crisil Ratings stated that the revision in the rating outlook factors in the expectation of a subdued business risk profile over the medium term.

Revenue growth remained constrained by intense competition, and due to occurrence of fire at GSL?s key manufacturing facility in December 2024, which contributed significantly to revenue. Following the incident, the company's operational performance has been under pressure, as evidenced by muted revenue growth and decline in operating margin.

Operating margin has also contracted due to rising raw material cost and lower utilisation of installed manufacturing capacities. Although GSL reported growth in revenue and operating margin in the first quarter of fiscal 2027, sustenance of growth will be key monitorable.

The financial risk profile has also moderated due to increase in debt. The company?s ability to maintain a comfortable capital structure, while supporting business growth, will be a key rating sensitivity factor.

The ratings continue to reflect GSL?s established distribution network, its strong brand in the lower and middle-income customer segments, and healthy financial risk profile, supported by efficient working capital management.

These strengths are partially offset by exposure to intense competition, geographical concentration in revenue profile and volatility in raw material prices.

Gopal Snacks manufactures ready-to-eat packaged snacks and food pellets under the brand 'Gopal'.

The scrip had risen 0.11% to end at Rs 256.60 on the BSE today.

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