Shares of Bikaji Foods, Prataap Snacks, and Gopal Snacks rallied up to 8% on Tuesday as the government's decision to cut GST rates on namkeen and savoury products brought a sigh of relief and cheer for the snack makers. At the 54th GST Council meeting on Monday, Finance Minister Nirmala Sitharaman announced that the GST rate on selected namkeen snacks or savoury items has been reduced to 12% from 18% earlier. Currently, the GST rate on namkeen or savoury items such as fruit & vegetable chips, bhuijas, snack foods etc. are already at 12%.
The reduction in rates will help resolve the existing uncertainty within the industry, says Rajat Bose, Partner, Shardul Amarchand Mangaldas & Co. “There was considerable confusion on the applicable GST rate for extruded and non-extruded namkeen (within the Namkeen industry) following which, most companies had received demand notices from GST authorities,” said Bose.
Boosted by the development, shares of Bikaji Foods gained as much as 7.7% to ₹899, while Prataap Snacks rallied 8% to touch a day’s high of ₹877.1 on the BSE. Similarly, the stock price of Gopal Snacks rallied 8.5% to hit a high of ₹354 in the first hour of trade so far.
Early today, Bikaji Foods shares opened 7.3% higher at ₹896.25 against the previous closing price of ₹834.95 on the BSE. The counter saw 0.5 lakh shares changing hands over the counter, while the market capitalisation rose to ₹21,609 crore. The stock inches towards its 52-week high of ₹901 touched on September 4, 2024. The midcap stock has nearly doubled against its 52-week low of ₹450 hit on October 26, 2023.
In a similar trend, shares of Prataap Snacks gained 6.4% to open at ₹864 against Monday’s closing level of ₹811.70 on the BSE. The market cap of the snack maker soared to ₹2,000 crore, with 0.36 lakh shares changing hands over the counter. The stock scaled its 52-week high of ₹1,450 on January 18, 2024, and a 52-week low of ₹750 hit on June 4, 2024.
Meanwhile, Gopal Snacks shares belled the day at ₹350.15, up 7.3% against the previous closing price of ₹326.30 on the BSE. At the time of reporting, the stock was trading 5.7% higher at ₹344.95, with a market cap of ₹4,298 crore. The counter touched its 52-week high of ₹392.70 touched on March 15, 2024, and a 52-week low of ₹300.95 hit on June 4, 2024.
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