Shares of Gopal Snacks Ltd., Bikaji Foods Ltd., and Prataap Snacks Ltd. rallied over 7% each on Tuesday after the GST Council on  Monday announced a revision to the rates on Namkeen.

The GST Council on Monday, cut the rate on Extruded Namkeen snacks to 12% from 18% earlier.

It must be noted that the GST rate on namkeen or savoury items such as fruit & vegetable chips, bhuijas, snack foods etc. are already at 12%.

The cut in GST rates on extruded snacks, aligns with that of other savoury snacks.

Prataap Snacks and particularly Gopal Snacks they are more centred on, you can say, ₹5, ₹10, ₹15 kind of packs in the snacking category. Whereas Bikaji Foods is more on, you can say, family packs, more on sweets. So to that extent, I think the plays are very, very different in these two kind of companies,” said Amnish Aggarwal, Head of Research at Prabhudas Lilladher.

“But having said that, in the longer term, the sustainability of Bikaji looks better than the other two because when you are selling more of a ₹5, ₹10 packs, then your margins fluctuate a lot with the fluctuation in the raw material prices because you don’t want to lose that ₹5 rupee or ₹10 price point. So difficult for me to take a call specifically, but structurally, I think Bikaji seems to be better placed as of now,” he added.

Abneesh Roy of Nuvama also said that he does not see a major impact on listed players due to the rate rationalisation on extruded snacks.

Shares of Prataap Snacks are trading with gains of 5% at ₹855.15.

Shares of Gopal Snacks are trading 4.6% higher on ₹341.4.

Shares of Bikaji Foods are also trading 4.7% higher at ₹874.

While shares of Bikaji Foods have rallied close to 60% so far this year, those of Prataap Snacks are underperformers, having declined over 23%.