Gopal Snacks Ltd (NSE: GOPAL) Q3 2025 Earnings Call dated Feb. 12, 2025
Corporate Participants:
Bipin Hadvani — Managing Director
Yash Rajpara — AGM, Finance & Accounts
Naveen Gupta — Chief Business Officer
Analysts:
Nitin Gupta — Analyst
Manish Ostwal — Analyst
Pawan Parakh — Analyst
Resha Mehta — Analyst
Naitik Mutha — Analyst
Disha Giria — Analyst
Bhavin Shah — Analyst
Pulkit Singhal — Analyst
Nikunj Mehta — Analyst
Abhishek Kumar — Analyst
Unidentified Participant
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Gopal Snacks limited conference call hosted by NK Global Financial Services. As a reminder, all five lines will be in the listen only mode. And there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchtone phone. Please note that this conference is being recorded.
I now hand the conference over to Mr. Nitin Gupta from MK Global Financial Services. Thank you. And over to you, Mr. Gupta.
Nitin Gupta — Analyst
Good afternoon everyone. I would like to welcome the management and thank them for this opportunity. We have with us today Vipin Hadwani, Chairman and Management Director. Naveen Gupta, Chief Business Officer and Yash Rajpada, SGM Finance. I shall now hand over the call to the management for the opening remarks. Over to the management.
Bipin Hadvani — Managing Director
Okay. Hello.
Operator
Yes, sir.
Bipin Hadvani — Managing Director
No Sir. [Foreign Speech] Thank you.
Yash Rajpara — AGM, Finance & Accounts
Yes, thank you sir.
Bipin Hadvani — Managing Director
Thank you.
Yash Rajpara — AGM, Finance & Accounts
Good afternoon everyone. My name is. So let me begin with the sharing key financial highlights for the quarter and nine months ended on December 31, 2024. Let us take up key financials for Q3 FY25 first. During the quarter we achieved a revenue from operations of 393.6 crores marking a year on year growth of 7.1%. The growth was driven by product innovation, focused channel engagement and and expansion in distribution network as well as imparting essential training to our dealers and with feet on the street, our gross profit for the quarter stood at 84.2 crores represent
[Technical Issue]
Operator
Ladies and gentlemen, the line for the management has been disconnected. Let me reconnect them. Please hold the line. Ladies and gentlemen, thank you for patiently holding the line for Mr. Yash Rashpara has been connect reconnected. Over to you sir.
Yash Rajpara — AGM, Finance & Accounts
Sorry for the delay. Our gross profit for the quarter to date 84.2 crores representing a gross profit margin of 21.4% against 26.3% last year. Our margins during the period were impacted by several factors starting with rising key raw material pricing which added a significant pressure on our margins. Key raw materials such as palm oil, potato and chala witnessed sharp price increases on year on year basis and that has substantially impacted our cost structure. In response to that, we have undertaken multiple initiatives like downward revision in granite in our rupees 5 and rupees 10 SKUs of gratia and milking products as well as upward revision in selling price in some of our larger packs.
Margin pressure was also observed as a result of third party tariffs to resume our production and supplies consequent to the incident of fire. However, this pressure is both marginal and temporary. Our EBITDA for quarter three stood at Rupees 15.5 crores with an EBITDA margin of 3.9% against 9.6% from the last year. In addition to declining GP being the main reason, the decline is also attributable to increase in employee benefit expenses as well as advertisement and promotional costs. Our profit after tax stood to 5.3 crores with a flat margin of 1.5%.
Now coming to ITD performance for nine months of fiscal 25 we reported revenue from operations of rupees 150.50 crores with a year on year growth of 10.2%. Gross profit stood at 303.6 crores with gross margin of 26.4% is against 28.7%. Gross profit has remained in line with the last year. EBITDA stood at rupees 103.2 crores with a Nikta margin of 9% compared to 12.4% last year. We would like to reassure you that the underlying business fundamentals of Gopal Snacks are remaining strong and we are well positioned for a steady recovery. Our focus remains on optimizing operational efficiency, enhancing profitability and delivering value to all our stakeholders.
With this, I would like to request Naveen sir to provide operational highlights on the quarter fallback.
Naveen Gupta — Chief Business Officer
Good afternoon everyone. Thank you for joining. During the quarter we demonstrated resilience and adaptability, overcoming significant challenges to deliver a strong performance. Talking about statewide performance, our focus states achieved a healthy growth of 19.7% showcasing the success of our expanded distribution network and market specific strategies. Other states continued to exhibit stellar performance with a significant growth of 48.3% driven by our targeted efforts to tap into new regions and expand our geographical. These results underscore the success of our ongoing initiative to strengthen our footprint across under penetrated markets. Our strategic focus on key segment yielded remarkable results this year. The wafer category witnessed a substantial growth of 48% driven by continuous product innovation, enhanced trade campaigns and improve channel engagement.
We remain committed to establishing a leading position in this category by introducing region specific products and flavors tailored to our consumer preferences. Additionally, we are intensifying efforts to strengthen the Bakiyan Namkeen segments which despite the fire incident, remain integral to our portfolio. A key driver of our success remains our expanding distribution network which has grown to 874 distributors, adding 207 new partners in the past nine months. This expansion has played a crucial role in strengthening our market presence, driving revenue growth and increasing our share across key regions.
Furthermore, commercial operations have started at our new manufacturing facility in Gondal. This facility is a pivotal step in reaffirming our commitment to operational excellence and supply chain resilience. The new plant is expected to operate at 100% capacity by end of this fiscal year, significantly enhancing our production capabilities and enabling a faster phase out of third party leadership during the quarter, we laid the groundwork for additional branding and marketing initiatives which are set to launch in the upcoming quarters. These efforts aim to enhance brand visibility and strengthen market penetration, ensuring sustained growth and consumer engagement.
A long term strategy focuses on expanding market presence, enhancing operational efficiencies and postpone innovation across our product lines. With a strong distribution network supported by rapid deliveries through all logistics vehicles, increased capacity utilization and a diversified product portfolio, we are well positioned to capitalize on emerging opportunities. We remain committed to driving sustainable growth, optimizing profitability and delivering long term value to our stakeholders.
This is all from my end. I now request the attendees to come up with their questions. Thank you.
Questions and Answers:
Operator
Thank you very much sir. We will now begin with the question and answer session. Anyone who wishes to ask questions May press star N1 on the touchtone phone. If you wish to withdraw yourself from the question queue, you May Press Star N2. Participants are requested to use only handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Manish Ostwal from Nirmal Bank Securities Private Limited. Please go ahead.
Manish Ostwal
Yes sir. Thank you for the opportunity and it’s really a tough quarter for the company but you performed with resilience so that’s good to see. So first question on margin movement during the quarter. So we have seen almost 756 basis point of dip in the gross margin and the reason is one is the RM inflation. The second is maybe third party procurement costly, slightly higher cost compared to the what we were manufacturing inside so and so. First is what is the component of these two factors in terms of contribution of margin decline and second is when do you see your margin going back to the Q2 level in in near term? Is there any possibility you can make comment on that also?
Yash Rajpara
Thank you for the question only. As you know the third party manufacturing has just after the fire. Okay, so it is in the last few days of the quarter. Its contribution to the declining GP is very minimal, not even say half percent of the quarter majority of the declining gross margin is on account of incremental palm oil and other commodity pricing such as potato and can you kindly repeat the second question?
Manish Ostwal
The second question is in your presentation you mentioned that we have taken some pricing action. So when do you see your gross margin back to the quarter two level? That is the question, sir.
Naveen Gupta
Let me answer this question. The margin pressures what indications we are getting? The current quarter also continues to be challenging. And we see Chennai and potato prices significantly softening. And as far as edible oil prices are concerned, it’s very difficult to predict although. But future prices ports are comparatively lower. We see that in Q1 there will be marginal improvement in margins. But Q2 will it will be back on track because of three reasons.
One, RM prices will stabilize.
Two, whatever actions we are taking for short term or midterm, whether it is, you know, corrections in damage or increasing MRP or whatever the ways are to pass on inflation impact to the consumer. Plus the third thing is by that time our dependency on third party will reduce or it will become zero.
Third party operations may not have impacted our margins beyond 1%. But there’s a disruption in supply chain, you know, which impacts our transportation cost as well, right? That transportation cost will also become zero. And we are expecting, not expecting. We have clear timelines late that our Modacha operations will start from first week of July itself to cater to a larger product basket. So that also saves us a substantial amount in terms of you know, transportation cost. Even inward and outward both kind of transportation cost as well labor cost margins are expected to come back on track from Q2.
Manish Ostwal
So Q4 will be margin will be very similar to quarter three. Am I right, sir?
Naveen Gupta
Yes.
Manish Ostwal
Okay. The second question on the ad spends for so can you indicate the total spend we have done done for nine months and the quarter three on ad spend? Because we are expanding distribution network in the focus market so that also increase the ad spend. So what how much we have incurred for the nine month and the quarter three?
Yash Rajpara
So by December 31, 2024 we have incurred the advertisement and sales promotion expenditure to the T of 7.25 which translates to percent of the revenue.
Manish Ostwal
Okay. And lastly sir, to judge the the concentration risk of our production operation. So. So in terms of our plant wise concentration of sales like Rajkot, Nagpur, Mondasa and Gondal. Can you briefly give the indicative contribution of these facilities to our sales?
Naveen Gupta
Yeah. So let’s take a ballpark figure of 100 crores. What we did in the month of December, 40 crores came from Nagpur plant. Okay. And 45 crores came from Madasa plant. And rest 35 crores came largely from, you know, third party. So third parties are now gradually getting shifted to our Gondal facility.
Manish Ostwal
Okay. Okay. And sir, thank you very much. Thank you very much for answering all the questions.
Operator
Thank you. We’ll take the next question from the line of DV Ghoshar from Jiojit pms. Please go ahead.
Pawan Parakh
Hello. Yeah. Yeah, hi. Sir. Tough times. But I think sir, despite the issue, we’ve got 7% revenue growth. That is pretty good in my opinion. My only question is that earlier quarter also we had spoken about increase in large size pack. And I think the trend is showing towards increasing contribution from large size pack. Right. So in this quarter, 10 rupee and above is about 23 and a half percent of our revenue. Anything that you can highlight, what are the good things we’ve done here, what is working and how do we want to take this ahead going forward?
Yash Rajpara
I couldn’t get your name. Exactly. What’s your name?
Pawan Parakh
Pawan
Yash Rajpara
Post fire incident, you know, there was massive trouble for us to produce larger packs. Our key focus. And even you know, when we go for our dependence on third party. So all the other parties that facility to pack the smaller pack but did not have the facility to pack the larger packs. So it remained under pressure and it will continue to remain under pressure in the current quarter as well.
Now you can see from last week onwards our complete focus is now how to ensure that we get larger pack supplies. Because we don’t wish to lose market share of those consumers where our pack goes inside the house. Having said that, we have unveiled a product basket of 27 items which are standby pouches which were earlier not in our portfolio. We already commenced production of sandy pouches from Nagpur 10 days back. We have got tremendous response for our standee pouches. We are currently running out of stock on daily basis from our Nagpur plant for these trendy poucies going forward. As we had earlier mentioned that we are going to improve our footprint in modern trade and e commerce platform.
So these larger pouches will help us in two ways. One is definitely improving revenues and profitability. Second it announces the brand imagery. We are going to launch these 27 candy pouches in Gujarat as well in next 15 days. Large pack contribution will definitely improve. That is one of our, you know strategy how to improve our product mix from profitability perspective as well. Because these trendy pouches gives us better margin as compared to our smaller packs.
Pawan Parakh
Okay. Okay. And sir, any one off cost in this quarter so far because of fire you highlighted travel related thing. Apart from that any one off cost in this quarter?
Yash Rajpara
No, there was nothing.
Pawan Parakh
Okay. And sir, lastly given that Madam revenue target before this. Before this fire incident happened. Now given that in the next financial year only Q1 is supposed to be a soft quarter largely our estimates for internal target for FY26 and 27 should be broadly the same. If I’m. If I’m not wrong, is that correct perspective as well?
Operator
I’m sorry sir, your audio is not clear. Sir, your audio is not. Your audio is not clear. Actually, ladies and gentlemen.
Pawan Parakh
Is it better now?
Operator
Yes, so much better.
Yash Rajpara
Yeah. So there was no one off cost as such. And what was the next question?
Pawan Parakh
Since most of the issues are now behind us and we are seeing that in 1/4 or so post Q1, we should be completely back to our revenue and margin level that we were targeting earlier. All I’m saying that broadly our internal target for FY26 and 27 remain the same as we were emphasizing before this fire incident, broadly. Is that correct? Understanding?
Yash Rajpara
Yes. Yes you do. First month onwards itself, everything will be 100% back on.
Pawan Parakh
Oh great, great, great. Thank you so much, sir. Thank you so much. That’s all from my side.
Operator
Thank you. We’ll take the next question from the line of Resham Mehta from Green Edge Wealth. Please go ahead.
Resha Mehta
Yes, thank you. Very unfortunate that the incident happened while, you know, we were on a very good growth momentum. But so now, you know, the question is one is, you know, from a very short term perspective that while you have not quantified the loss estimates, but do we have any number on that or you know, what can be the one off cost that you know, we may see because you know, then that will be an ugly margin surprise sometime soon. Right. So any numbers there? And also on the insurance bit, so what’s the kind of insurance cover that we have and the status on the claim and you know, the timeline. Thank you.
Yash Rajpara
See, from the insurance perspective, we still believe that it is still little premature to recommend on the exact quantum of laws to be proved because at present survey and loss assessment activity is underway. In addition to that, an E auction for the salvage restructure is going on. But we are expecting a better clarity in this Q4 regarding exit amount of loss to be quantified and to be accounted for. And we are insurance cover of 174 crores for this facility to be very precise.
Resha Mehta
Okay. And sir, what was the invested amount to actually build this plant? What kind of capex had we incurred to build this plant?
Yash Rajpara
So over a period of time, the aggregate gross block of the same was near to 70,080. And this was back
Resha Mehta
Sorry. Actually I think the line is not clear. I’m not sure if there’s a problem with me or. Across the board.
Yash Rajpara
Depreciated value was close to 75 to 80 crores.
Resha Mehta
Okay. Okay. Okay. And by when do we expect this affected plan to fully come on stream? And how much capex you know would we be incurring to get it fully functional just like before?
Yash Rajpara
No, no. Let me give you ample clarity. We don’t intend to make this affected plant fully operational. We have stepwise plan ready with us. What we are going to do Right now our gondol thing is a makeshift arrangement. From 1st of July our Modasa will start. Modasa will become operational for hundred percent of our product basket. Once that product basket stabilizes. What we are going to do that for our primes category which are lighter in nature. We will start our production in our existing papad unit on a floor. So we will have roughly 10% contribution coming from Rajput in future for Gujarat. And 90% contribution will come from Modasa plant itself. We don’t intend to restart this affected plan.
Resha Mehta
Okay. Okay. Understood. And this you’re saying will be. By 1st of July this Modasa plant will be completely operational. Right.
Yash Rajpara
Let me further give you timeline. By 30th of April our civil work will be completed. So we will have two months in our hands. So to do machinery installation in our Modaka plant. So after that you know with each passing day we will keep adding one product. So it will take roughly one and a half month. By 15th of August 100% of our product basket will get manufactured at.
Resha Mehta
Okay. Okay. So by the 15th of August we are expecting full restoration of our production facilities which was pre fire. Is that understanding? Right, with zero third party sources sourcing. Correct?
Yash Rajpara
Will come to an end much before that because we have our bundle plant to back up. You know our entering operation.
Resha Mehta
All right. So by when do we expect third party sourcing to end?
Yash Rajpara
Next couple of months.
Resha Mehta
Okay. Okay. And sir, while you did talk about the margins. But when you say we will go back to normalized margins Q2. So what is it that an EBITDA level that you know, we would be targeting.
Yash Rajpara
Just give me a moment. 9 to 10%. When Q2 we are assuming, we are assuming that edible oil prices will get stabilized and rather decline at least by 5 to 10%. Then our EBITDA margin will be that, you know, 10 to 11% in Q2.
Operator
Understood. And like, when do we start seeing that? I was requested to rejoin the Q4. Follow up questions please. There are other participants are waiting. Thank you ma’am. Ladies and gentlemen, in order to ensure that the management will be able to address questions from all the participants in the conference, kindly limit your questions to two per participant. Should you have a follow up question, please rejoin the queue. Thank you. We’ll take the next question from the line of Nitin Gupta from MK Global Financial Services. Please go ahead.
Nitin Gupta
Yeah, thank you. Just wanted to check like what is the quantum of price hike we have affected so far and the quantum of price hike we are looking to effect in Q4.
Naveen Gupta
Can you come come up again with a question? What is the quantum of price hike which have, which we have done so far?
Nitin Gupta
Yes.
Naveen Gupta
Q4 May. On the larger packs we took a price hike of 12 to 13% on weighted average basis. And on smaller pack like 5 rupees pack we reduced grammage from 25 to 22 grams. But it did. This reduction did not start on first week of Q3. So you know the first we did 25 to 24 grams in first week, second week of October and then 24 to 22 grams we made it in last week of November.
Nitin Gupta
Okay sir, thank you. And I just wanted to check like in terms of disruption in production. So how have our products been available across the market? So do you see any drop in outlet coverage and distributor churn post fire? There is a minor drop in distributor count in states like Gujarat, Uttar Pradesh and Rajasthan. Just wanted to get some clarity on this.
Naveen Gupta
On December 23rd we had 275 distributors in Gujarat. And December 24th we had 290. And January 25th we had a count of 287 distributors within in state of Gujarat. Largely our impacted states. Gujarat, Rajasthan and parts of MP which we were catering from. You know Rajko, there is no decline in Maharashtra. There’s no decline in. There is no decline in Madhya Pradesh. There is no decline in Rajasthan. Q3 versus Q3. But yes, January, May, Rajasthan had certain dip in number of distributors because of poor supplies. And other states did not have any drop. As well as on date 31st January we had 878 active distributors. Last year December it was 638.
Nitin Gupta
Okay, sir. Thank you. Last one.
Naveen Gupta
Yeah. Only one left us. Only one distributor left us in Gu O Can.
Nitin Gupta
In terms of the outlet reach.
Naveen Gupta
I am not carrying the exact data as of now. I’ll get back to you.
Nitin Gupta
Sure, sure. And lastly if you can help us understand about the CAPEX outlay for Gondal and Modasa.
Naveen Gupta
So within the expected capex for gondol and borasa is likely to be around say 50 to 60 crores. All including plant and machinery as well as civil structure is under construction.
Nitin Gupta
Okay. Thanks a lot. Thank you.
Naveen Gupta
Let’s understand in a way because bundle May our civil was already ready. And we just installed our machinery. Once we our our civil is ready in Madasa we will shift majority of those machines to Modak.
Operator
Thank you, sir. We’ll take the next question from the line of Manish Ostwal from Nirmal Bank Securities Private Limited. Please go ahead.
Manish Ostwal
Yes, sir. Only I have only one question with respect to revenue target for F26 and 27. What is the target for these two years?
Naveen Gupta
We will be closing this financial year. Closing at roughly 1500 crores. Right? We will deliver 1800 crores in next financial year. And we are marking a minimum growth rate of 20% for the subsequent financial year.
Manish Ostwal
Okay, sir, thank you.
Operator
Thank you. The next question is from the line of NAITIC from NV Alpha Fund. Please go ahead.
Naitik Mutha
Hi, sir, thanks for taking the question. So my first question is, you know, if you could give us some sense on what sort of margins we make in our V4 segment, you know, is it above the company level margins or below? Because we’re seeing rapid growth in that segment. So just wanted to know what sort of margins, you know, we make in this segment.
Yash Rajpara
Yeah, sure.
Operator
I’m sorry, the line for the management has been disconnected. Please let me reconnect. Please hold the line. Sa ladies and gentlemen, thank you for patiently holding. Over to you, sir.
Yash Rajpara
So, nitik, apologies for delay. If we talk about the potato workers, the quarter three margins were in the terms of 18 to 20%. Okay? On annualized basis, the same shall be considered to be somewhere between 30 to 33% due to expected fresh and cheaper potato crops.
Naitik Mutha
Right? Right. And in terms of EBITDA also, they are, you know, sort of at company level or above company level.
Yash Rajpara
Understand the question. Can you please repeat?
Naitik Mutha
No, these are at gross levels, right? You know, 30, 30% that we expect it to be. But on, even on EBITDA levels, it will be similar like above company level.
Naveen Gupta
In wafers, as a category annualized basis, the gross margin will be 30 to 33%. And at basis it will be 28 to 29%.
Naitik Mutha
Right? Okay sir, it’s sure. My second question is, you know it’s quite happening to see your growth aspirations of 20% and above. But my question is, you know sir, snack pellets and numkin has sort of not seen growth. You know even if I exclude the last quarter which was affected by fire even before that they have sort of been flattish and not grown. And these two are big categories for us. So you know can we expect these two categories to start contributing in terms of growth going forward?
Yash Rajpara
Yeah, definitely. If I try to give you a you know split of October, November versus December. So October November values were 279 crore rupees. Right. Going by that run rate we would have delivered 135, 140 crores in the month of December itself. So Matt Pellet are a major contributor in Gujarat state. So if going forward we are going to do lot of you know product innovation as well. In snack palette category like our only intern, only new introduced product in snack pallet was pizza pasta and it was an instant hit. So we have three more products in our city and we’ll be supporting couple of our products through you know consumer promotion of like etc.
To come back at our regular pace. In snack pellet category as far as Namkeens are concerned we have you know multiple plans how to bring back Namkeen’s run rate. One definitely will be our marketing endeavor. Because we are heavily dependent on Gujarat for our Namkeen revenue. Second, from outside Gujarat we introduce these trendy pouches which are. I mean we launched it 10 days back in Nagpur and feedback is very good. Whatever stocks we are producing every day, every day it’s getting sold out 100%. So Nam will also start growing.
Naitik Mutha
Right sir. Got it. So one, one more question I have is. You know the advertising spend that you mentioned. The voice wasn’t very clear. If you could just repeat how much we’ve spent in the nine months.
Yash Rajpara
It was 7.2424 cr.
Naitik Mutha
Sorry, 8 crores. You mean.
Yash Rajpara
7.25 cr7.
Naitik Mutha
Okay. And so my last question is are we going to appoint or are we looking for a new CSO or any any updates on Baxa?
Yash Rajpara
So Natic, our talent acquisition team is already actively engaged with the potential candidates and as soon as the company is finding suitable candidate the one will be on board.
Naitik Mutha
Sure, sure. That’s it. From inside. Thank you.
Operator
Thank you. A reminder to all the participants to kindly limit their questions to two per participant. The next question is from the line of Disha Giria from Ashika Institutional Equity. Please go ahead.
Disha Giria
Hi, good afternoon. So you mentioned in your earlier commentary that you do not intend to restart the affected plant fully. So I mean could you just explain on that once?
Naveen Gupta
Yeah, that’s very simple. You know to dismantle that building and remake that building is going to take more time. That building, that whole asset is already under, you know, insurance company preview. So we don’t wish to lose our revenue. Secondly, Modasa as a location is more strategic versus Rajpur which helps us roughly 10 to 12 crore rupees on annualized basis. Which helps to save us 10 to 12 crore rupees on annualized basis owing to inward freight cost as well as outward freight cost. So it’s more sensible for us to, you know, relocate to Modasa for our larger dependency of product basket.
Disha Giria
Okay. And my second question is that earlier in one of the analyst questions you had mentioned that the large pack contribution will improve with the launch of the new pack that you have. My query is regarding the small packs. So considering the inflation and how they do not contribute that much to the margin, are you planning on discontinuing the 5 rupee 10 rupee or any of these price point packs?
Naveen Gupta
No, no, no, no, no, not at all. 5 rupees products are our bread and butter and we, we don’t intend to discontinue with our 5 rupees price point product. There will always be couple of scopes. One is further grammage reduction. Second could be reducing retailers margin. If you remember during COVID times palm oil prices as parted to in dollar terms all time a 25 years all time high and it has in INR terms it has gone up to 165 rupees per liter.
At that point of time majority of companies restructured the retailer margin and price to retailer was coming to 4 rupees 50 paisa which is currently 4 rupees 25 paisa. So in case it further goes up so entire industry will know reduce the retailer margin and reduce the grammar. So one portion can be passed to the consumer another portion of inflation can be passed to the retailer.
Disha Giria
Okay. Yeah sure. That is it from my end.
Operator
Thank you. The next question is from the line of Bhumin Shah from Samiksha Capital. Please go ahead.
Bhavin Shah
Good afternoon. So are we planning any price acts or grammar reduction quarter four. That is the first question. And second is if you look at the potato chips sale on quarter on quarter basis pack growth is only 2% whereas price growth is 7%. So are we selling the larger packs or how the shift is happening over the debt wanted?
Naveen Gupta
Yeah. So boom in by. We are not intending as on date. We are not intending any further grammage reduction in quarter four at least because there is competition landscape as well. And coming to this potato thing earlier we were selling our wafers roughly 15 to 20% cheaper trade price versus the leader brand. So we have reduced that gap now by 7 8%.
Bhavin Shah
Okay and the last question is that letter was X percent capacity before the fire incident. So will it be covered by Modasa going forward Or Moda will have a larger capacity as compared to the pre Sawyer Rajkot.
Naveen Gupta
Yeah. Modasa will have a larger capacity.
Bhavin Shah
So will it be 10 20% if you can give us the number how much bigger would be the modus advantage compared to that?
Naveen Gupta
Roughly 20 25% more capacity versus the affected.
Operator
Thank you. We’ll take the next question from the line of Pulkit Singhal from Dalmas Capital Management. Please go ahead.
Pulkit Singhal
Thank you for the opportunity and very unfortunate state of events. But it’s good to see that we are trying to catch up and come back fast enough to our original plan. Just my one question is you know I mean in the process of going through this entire I mean, you, you’re having to reimagine your whole manufacturing footprint, logistics, maybe even product packaging and sizes. So what, are there any good things that are coming out in this whole reimagination process which kind of bring in more efficiencies into the way you now conduct business going ahead? What are those areas that you may have identified from efficiencies as well as from new product areas, targeting, which gives you more revenue. So just trying to understand that.
Naveen Gupta
Yeah, there are a couple of things which we realized. One is when we were running short of our, you know, key products, we tried to drive our entire sales team as well dealer fraternity to start focusing on whatever was available with us. So at least distribution team is more geared now to sell a better range of products. And as far as efficiencies are concerned, whatever small, small inefficiencies were there in the affected plant because this plant was always made, you know, over a number of years. So those are identified. So definitely when we put a new plant. So those things are taken care of.
Pulkit Singhal
Right, but are you able to quantify in terms of, you know, eventually, I mean, initially this business was 11, 12% margin kind of business and even there you had certain, you know, capacity utilizations were low, etc. But if you think of it two, three years out, this new plant, the reduced logistics cost, etc. I mean, how much more margins can decide? I mean, are you able to quantify the efficiency?
Naveen Gupta
Yeah, we. We got a cost sheet made from our cost accountant and that is why I, I mentioned the precise number that by putting up, we had, you know, a lot of diligence internally and we had a lot of debate and discussion. First basis our guts. And then finally we got into actions. We said, okay, cost sheet that why we should, why we should move our manufacturing to Madasa because it gives us an annualized saving of 10 to 12 crores.
Pulkit Singhal
Okay, great. Thank you. And all the best.
Naveen Gupta
Thank you.
Operator
Thank you. We’ll take the next question from the line of Nikunsh Mehta from Magma Avengers. Please go ahead.
Nikunj Mehta
Yeah, hi. Thanks for the opportunity. Am I audible?
Naveen Gupta
Yeah, you’re listening. Yeah.
Nikunj Mehta
So first of all, very good commendable performance in terms of how we got back after the unfortunate incident which kind of happened. I have a couple of questions. The first is that you. One of the pointers which you mentioned is that in the month of December almost around 35 crores was the third party procurement which we kind of had in. In terms of overall sales. Is that correct? That number.
Naveen Gupta
Yeah.
Nikunj Mehta
35 crores?
Naveen Gupta
It was roughly 13 to 15 crore rupees. 15 crore rupees from third party.
Nikunj Mehta
Okay, okay, okay. So how do you see.
Naveen Gupta
The total business loss was to the tune of 30, 35 crores. This is what I stated.
Nikunj Mehta
Okay, understood, understood. So that roughly amounts to from a quarterly sales perspective that roughly amounts to close 5%. So how do we see the mix in Q4 from third party? In your assessment?
Naveen Gupta
Our dependency on third party will remain on monthly basis for next two months, at least 10 to 12 crores per month. But simultaneously business losses will keep reducing because now we will have our bundle plant is also.
Nikunj Mehta
Yeah, understood, understood. Fair point to that. And the second question which I had was more with regards to competitive intensity. Now because of the palm oil prices, I think everyone is facing a lot of challenges. So just wanted to know that we have reduced grammage on the. On the Gatia side as we have mentioned that we won’t lose further. So, so my question was one that how has the competition reacted to that? Has the competition also reacted to similar kind of grammage increase or they have been more aggressive to kind of take some market share by continuing with the 25 grams kind of a packet?
Naveen Gupta
Yeah, few, few players have reduced grammages, few stop stops production and few, you know, becomes more aggressive who are more keen to take market share. I mean there are players who are still ready to burn the money and you know, keen to take market share. So there is always mix of competition.
Nikunj Mehta
Okay, okay. And in Q4 do you see on the wafer side to be further taking price hike? Because the. The point which I’m coming to is that we have mentioned that we have taken a weighted average price increase in the larger pack segment and we are clearly not the market leaders in that segment. And though our pricing discount versus fear would have reduce, if suppose the competition doesn’t take the price hike then it will be very difficult for the for the product to get put into the market. So what is your sense on that? Because that is one of the segment which is the fastest growing segment for us.
Naveen Gupta
I just got a poll conducted yesterday itself from the entire distribution team. We took, you know, price hike in wafers, 10 rupees segment which is the highest contributing SKU for us. We took a price hike to the tune of 7, 8%. So I got a poll conducted from my distribution team whether it is impacting revenue or not. So 100% of the people responded. There is no impact, no negative impact. So now coming to what competition will do. 10 rupees MRP Wafers, the leader brand in Gujarat sells at 8 rupees 50 paisa.
A year back we were selling at 6 rupees 50 paisa. So I took a gradual hike. Then I made it 690. Then I made it, you know, 740. So currently we are also selling at 850. But now I am supporting through a trade scheme of weighted average 7.8%. So versus competition. If one year back the gap was to the tune of 20, 25%. Now the gap has reduced to just 7.8%. The competition cannot. Competition will neither increase the price nor decrease the price from here.
Nikunj Mehta
Understood. And it is basically it is not impacting the sales also is what you kind of clearly mentioned.
Naveen Gupta
No, it’s not impacting sales.
Nikunj Mehta
Okay. Okay. And last question from my side. Because of this disruption and everything and because I am assuming there will be a bit of increase on the working capital side as well. So have our borrowings decreased as compared to our September and balance sheet numbers?
Naveen Gupta
So Nikunsh, there has been a marginal utilization of working capital facilities because we had surplus available with us at the time of fire event taking place. Okay. So there hasn’t been much of utilization. Since we are expecting new crop season. There will be a utilization in Q4.
Nikunj Mehta
Yeah. Okay. Okay, understood. That’s a. That’s it. From my side. Thank you and all the best. It was very commendable that you guys have come back in terms of the production disruption which was have has happened. And posting a growth in this quarter was good feat which we have achieved. Thank you so much. Thank you so much.
Operator
Thank you. We’ll take the next question from the line of Abhishek Kumar from Sanctum Wealth. Please go ahead.
Abhishek Kumar
Thanks for the opportunity. Yeah. Yes, thanks for the opportunity. So my first question is on raw materials. So raw material. I just want to know our main raw materials with this pomegranate oil potato chandal. So what exactly the percentage of our total raw material basket. If you could give some rough numbers on that.
Naveen Gupta
Yeah, you want split of RF split, sir?
Yash Rajpara
Yes. So Abhishek, out of the entire composition, the Palm oil contains 26%. Roughly 26 to 28%. Okay. And then the second highest consumed ingredient is Chana, which contributes to roughly 20 to 23% of the product composition.
Abhishek Kumar
Got it. And have you seen any soft. You mentioned that you have seen softness in potato channel prices in recent months. So just wanted to know. So out of the total the sudden swing in prices across our raw material boxes. So by now how much price hikes or grammar cut in order to cover for that we would have taken. [Technical Issue]
Naveen Gupta
So 6%. 6%. You are asking typically about the waterfall, right?
Abhishek Kumar
Yeah, yeah. The cumulative price highs in order to cover for the incremental cost. What all how much we would have taken up until now. And how much did you intend to take? Maybe next month or by Q1 in order to.
Naveen Gupta
5.9% of the impact has been if. If RM prices impacted us to the tune of 10.8% on total, we passed on to the consumer 5.9% out of that.
Abhishek Kumar
Okay. And the rest you intend to undertake in future months or the other set of questions was respect to our segregation of markets into core and focus. Given that this last quarter got impacted, especially the last month got impacted because of our Rajput facility. I just wanted to know how do we look at the growth rates for core states which is Gujarat and other focus states on a say a yearly basis. How is the company thinking about it? What kind of growth risk we could expect?
Naveen Gupta
Yeah, so core state Gujarat definitely once things stabilize so will continue to grow at a pace of 10 to 12%. Because whatever corrections we were taking in Gujarat and distribution, those have started yielding results. And our focus markets will grow at a pace of 25% and the other markets will continue to grow at a pace of 40 to 50%.
Abhishek Kumar
Okay, so got it. And given that we are expanding at a good pace now, so what kind of brand building activities and general ATL activities we are thinking of? Because given that our presence has now is increased over several states. So you have to start investing on that. So what’s the thought process behind that?
Naveen Gupta
Yeah, more than earlier it was like want for us to grow revenue to come out with aggressive marketing endeavor. Now it, it will become or rather it has become a need for us. Because definitely in this period we have lost some market share, some market space to the competition. So in order to take back that shelf space or market share we will do a full blown TV commercial somewhere in Q2. More important for us right now is to you know, get back our production to the full scale. Once product availability stabilizes then we will do a full blown TV commercial.
Abhishek Kumar
Okay sir, that’s good to know. And then my last question is again with respect to focus market. So we have business in Amharas and UP and these two states being two big states. So how exactly are we setting there and what is our strength in terms of our touch points in these states and how are we attacking competition also on the ground? If you could just share some.
Naveen Gupta
UP and which other state you mentioned?
Abhishek Kumar
UP and Maharashtra.
Naveen Gupta
Yeah, so we will focus more on Maharashtra because we have a plant in Nagpur, so that makes more sense to us to have a better distribution depth in a vicinity of 300-400km of our plant. Having said that, up is a large market with a large population base. Gatia is a big contributor in up. Gatia is not so big contributor in Maharashtra. But since our media campaign will be around our hero product Gatia, so definitely we’ll focus on Gatia in Maharashtra as well.
Abhishek Kumar
That’s it. From my side. All the best. Thank you.
Operator
Thank you. The next question is from the line of Amit Agija from Edgy Hawa. Please go ahead.
Unidentified Participant
Good evening, sir. Thank you for the opportunity. And so my question was with respect to the geographic distribution, like the presentation seems like some north Indian states and some South Indian and east Indian states cannot get covered. Like when does your company plan to become Pan India and are you planning to expand to exports to new markets?
Naveen Gupta
Going northward is going to be a costlier affair for us. So in short term our focus is to regain our production facility in midterm. To consolidate and regain our market share in core state and focus state. If we intend to grow northwards or eastwards, it will be through either through M and A or through, you know, some, some sort of joint venture in our salty snacks category. Until and unless we have, you know, multiple plants at multiple locations, it’s not wise to go beyond 700, 800 kilometers.
Unidentified Participant
Is the company planning any more?
Naveen Gupta
We were contemplating before this fire incident we were contemplating, you know, couple of small, small acquisitions and those were not brands. In fact those were small, small factories. But now we have stopped thinking as of now because priorities have changed.
Unidentified Participant
Okay. So it was helpful in all this for future. Thank you. Thank you.
Operator
Thank you. The next question is from the line of Sanjay Datte, an individual investor. Please go ahead.
Unidentified Participant
Yeah, thanks for the opportunity. I have two questions. First question is last month there was a news item that a dead rat was found in our Namkin packets, I think in Banska Tower somewhere in Gujarat. So what is the status of that?
Naveen Gupta
The case is shut. Actually that consumer and the retailer had some, you know, the consumer in question was six months, baby. So it was all, you know, fabricated story.
Unidentified Participant
Okay. Because there was no update from the company with the stock exchanges. Like there was no filing or anything. So it was just a little confusion.
Naveen Gupta
Yeah. We. We probed the matter and the consumer had bought the product from the retailer. The consumer and the retailer had some, you know, personal animosity. So they were fighting with each other.
Unidentified Participant
We unfortunately got into this. Okay, second question is about the GST notice that you had received for 12 crore or something. What. What is the status?
Yash Rajpara
So, Sanjay, thank you. With reference to the GST notice, the company is already in the petition at the honorable high court of Gujarat and the matter is pending at that forum. And it is an industry, industry wide, industry wider issue.
Unidentified Participant
Okay. Okay. So that means we have not accounted for it as so far in our account, right? It is a contingent liability right now?
Yash Rajpara
Yes. Yes, very much.
Unidentified Participant
Yes. Okay. Okay. Thank you. Thank you. Thank you. And all the best.
Operator
Thank you, sir. Ladies and gentlemen, as there are no further questions, I would now like to hand the conference over to the management for closing comments. Over to you, sir.
Yash Rajpara
I would like to thank everyone for joining the call. I hope we have been able to respond to all your questions adequately. So for any further information, we request you to please do get in touch with our investor relations team. Stay safe, stay healthy. And thank you once again for joining with us. Thank you so much.
Operator
Thank you, members of the management. Ladies and gentlemen, on behalf of MK Global Financial Services, that concludes this conference. We thank you for joining us. And you may now disconnect your lines. Thank you.