Please note that this conference is being recorded. I now hand the conference over to Mr. Rahul Dani from Monarch Networth Capital. Thank you, and over to you, sir.
Yes, thank you, Michelle. Good afternoon. On behalf of Monarch Networth Capital, we're delighted to host the senior management of Wonderla Holidays. We have with us Mr. Arun K. Chittilappilly, the Managing Director of the company, Mr. Saji K. Louiz, CFO, and Mr. Dhiren Chaudhary, COO of the company. We will begin the call with the opening remarks from the management and then move to Q&A. Thank you, and over to you, sir.
Thank you. This is Arun K. Chittilappilly, Managing Director. Would like to welcome all of you to this Q4 earnings call, FY 2024. Good afternoon, and welcome to everyone. Actually, a warm welcome to all of you to discuss the Q5 results. I'm accompanied by our CEO-CFO, Saji K. Louiz, and COO, Dhiren Chaudhary. I hope everyone had a chance to go through our results and the investor presentation. The year began with a strong start, maintaining our growth momentum established by the company in recent years. Our revenue from operations for the quarter amounted to INR 99 crore and for the full year it was INR 483 crore, marking a year-on-year growth of 13%. During this year, we also achieved our highest ever EPS of INR 28, clocking 6% year-on-year growth.
We are also experiencing consistent growth in our marketing efforts and have been instrumental in raising awareness. During the quarter we have launched a thrilling attraction called Air Race in Kochi. The quarter has been packed with excitement, featuring themed celebrations, Women's Day, Holi celebrations, and Valentine's Day, et cetera. We also enriched our customers with two true festive periods and themed food product offerings. We had a Sunburn event in Kochi Park, New Year's celebration at Hyderabad, and a live concert by renowned singer Vijay Antony at Bangalore Park. Footfall for the quarter stood at 7 lakhs, and footfall for the full year stood at 32.5 lakhs. Despite a challenging fourth quarter, mainly because of drop in group footfalls in Kochi, our footfalls reflect the growing popularity of our attractions and effectiveness of our marketing efforts.
Our team has worked diligently to maintain high standards of safety, cleanliness, and customer service, contributing to a significantly to a positive guest feedback and repeat visitation. ARPU for the quarter stood at INR 1,349, an increase of 14%, and for FY 2024 at INR 1,430, registering a growth of 15%. Our increase in ARPU was driven by a healthy growth in non-ticket revenue, along with encouraging response from walk-in groups and all aspects of our customer base. Throughout the year, we've been pioneering new paths. As mentioned in our previous calls, we are in discussions with various state governments to start multiple projects. Our Orissa park is swiftly taking shape, and we have just concluded the press launch of the park, which will be open to public from 24th of May 2024.
We are confident that this new addition will further enhance our growth and appeal and contribute to the revenue and footfalls in coming years. As for our Chennai project, initial groundwork and, including leveling and the workshop setup have been done, and we hope to operationalize this park in FY 2026. As we look ahead, our outlook for future growth is incredibly bright. We are also confident that our focus on enhancing guest experiences, fostering innovation, and strategically expanding our offerings will drive not just growth, but sustained excellence. We are immensely grateful for the dedication of our team, our customers, and steadfast support of our shareholders. Together, we are poised for even greater achievements. With this, I would conclude my remarks and hand over the call to Saji, our CFO, for detailed analysis of financial performance. Over to you, Saji.
Yeah. Thank you, Arun. Good afternoon, everyone, and thank you for joining us for the Q4 and FY 2024 earnings call. I will provide you with the concise overview of our financial performance for both the quarter and the full year. Starting with the Q4 FY 2024 financial performance, our revenue, including other income for the quarter, stood at INR 99.7 crore, grew by 1.1%, YOY basis. EBITDA for the quarter reached INR 40.5 crore, grew by 28% on a year-on-year basis. This was due to reduction in our footfall, increase in our payroll expenses, and reduction in other income. EBITDA margin for the quarter stood at 38.7%. Adjusted EBITDA for the quarter stood at INR 41.9 crore, a margin of 40%, after ESOP adjustment of INR 1.33 crore.
Our profit after tax for the quarter stood at INR 22.6 crore, down by 35.5% on YOY basis, and PAT margin stood at 21.6%. Now, focusing on FY 2024 financial performance. Revenue, including other income for the year, stood at INR 506 crore, a substantial increase from the INR 452.4 crore in the-
... same period last year, representing an 11.8 year-on-year increase. EBITDA for the year stood at INR 250.1 crore as against INR 234.6 crore same period last year, showing a 6.6 year-on-year increase. EBITDA margin for the year was 49.4%. Adjusted EBITDA for FY 2024 was at INR 251 crore as against INR 235 crore for the same period last year, with a margin of 49.7%. As mentioned earlier, this is mainly after adjusting the ESOP expenses. Profit after tax for the year stood at INR 157.9 crore, up by 6.1% YOY basis. PAT margin stood at 31.2 for the year. Moving on to park-wise footfall numbers.
FY for, for QY, Q4 FY 2024, footfalls for Bengaluru park stood at 2.43 lakh, Kochi park at 2.32 lakh, and Hyderabad park stands at 2.34 lakh. For the year, Bengaluru park, at 12.7 lakhs, Kochi park, 10.33 lakhs, and Hyderabad, 9.49 lakhs. With this, now I conclude my speech and open the forum for Q&A session. Thank you.
Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask questions may press star and one on their touchtone phone. If you wish to withdraw yourself from the question queue, you may press star and two. 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 Angad Katdare from Sameeksha Capital . Please go ahead.
Thank you for the opportunity, and congratulations for the Bhubaneswar park. My first question is on footfall. So if I look at the full year of 2024, FY 2024, our footfall has decreased by 2%, while our ARPU has increased by 15% on YOY basis. Do you see this as a major reason for the falling footfall, or are there any other reasons for the same? That's my first question. And yeah, and what's the follow-up?
So the reason for footfall growth, especially in this last quarter, is because of change in our group sales. Normally, our Kochi park has a high contribution from group sales in January. That did not happen this year. Now, the reasons we are told is because of change in exam, you know, whatever, you know, the exam dates, and also preponing of exams because of elections. So these are the two reasons that we were given. The other two parks have not seen this issue. Only Kochi, I think, the group footfalls de-grew by 37%. So I'll hand over to Dhiren. He can, you know, elaborate on this further.
Yeah, hi. So if you also see our ARPU growth, our ARPU growth is actually coming on back of driving our sales per head, which is our non-ticket revenue. So we have been consistently making a lot of efforts in our F&B offerings and retail offerings, and that is actually driving our overall ARPU growth. And again, to second that, Arun, yes, there is overall for the year, there is a 2% degrowth in footfall. We also want to be mindful of the fact that we are actually- we were, we had a post-COVID pent-up demand. So we're very positive that on that demand, we managed to almost keep our footfall stable while growing our ARPU at 15%.
We consistently look at various opportunities that we can unlock, which we are actually working in FY 2025.
Okay. So, what will be the guidance for footfall and ARPU for FY 2025?
See, we are, because our existing parks are already, you know, they are old assets and, you know, pretty much running at capacity, we don't see huge footfall growth potential, especially in Bangalore and, maybe Kochi. But we do feel there is footfall growth potential in Hyderabad. We do still feel that there is more potential for us to unlock. But having said that, I think at a company level, we are not expecting more than 5% footfall growth for the year, for FY 2025. But the footfall growth and ARPU growth will be about 10%, 10%-12%. And then the next phase of growth for us will come from our newer parks.
Okay. So, just to clarify, 5% is for the existing parks, right?
Existing parks, yes, yes.
Okay. My second question is, so you mentioned that you are in talks with four or five governments. So any update on that? If you could share some update, that would be helpful.
Nothing, nothing as of now, because this is election season. I think all of those, conversations have been put on hold as of now because, you know, conduct, code of conduct. We are waiting for, normal, government functioning to resume, then we will pick up.
Thank you. I'll jump back in.
Thank you. The next question is from the line of Karan Khanna from Ambit Capital. Please go ahead.
Yeah, and thanks for the opportunity. Just a couple of questions, Arun. First,
Yeah.
What is the expected, you know, when you're expected to launch the Odisha park later this month? How should one think about the revenue and margin expectations from this park in FY 2025, and how soon do you expect this to become a bit break even? That's question number one. Question number two, on the ARPU front, given we've seen almost 15% growth in FY 2024 over 2023, and a similar growth in FY 2023 over FY 2020 also, how should one think of ARPU growth for next two to three years? Do you still see the ability to drive growth in maintaining ARPU growth without impacting footfalls much at the existing parks?
Okay. So first part of the question, Bhubaneswar, we are actually soft launching from 24th onwards. We are actually. I'm taking this call from Bhubaneswar. We just finished the press launch of the park. Tomorrow we are having, tomorrow and day after, we are having a preview meet for some well-wishers and influencers and all that. And then the next week, the park is opening. We are happy to say that we have finished the project in 13 months' time, which I think is practically unheard of in this segment. So we are very happy that the park is completely finished and we are open. Footfalls, anyway, it's very hard to predict, but we are internally hoping to achieve at least 4 lakhs footfalls.
ARPU, again, it's hard to, it's hard to kind of give a guidance on that, because first year we, we will be doing more promotions and just to get people excited about coming to the, this new park. But having said that, I think we are expecting about 400,000 visitors at an ARPU of roughly INR 800-INR 1,000. So that's the way we are looking at it. These are, these are conservative estimates. These, in all likelihood, if you know, if weather and all this, everything permits, we should do a little better than that also. But otherwise, I think we are, we are quite, happy with the way it's come out.
Second part of the question, we are expecting an ARPU growth in our existing parks of around, double digits, 10%, this year, because we've had huge ARPU growth in the last two years, so we may not look for a huge ARPU growth this year, but 10% I think is achievable. And like I said, the marginal footfall growth is all we are projecting from our existing, parks. We are because, again, coming off of COVID highs, there could be some fluctuations in footfalls. You know, like, for example, last quarter, what has happened is, our school, crowd, especially for one park, completely, you know, they, they didn't come around, so that whole business was not there. So these things can happen because we are coming off, COVID highs.
But, I think we are more or less confident that we should be able to maintain marginal footfall growth and about 10% ARPU growth.
Sure. And if you think about the near-term trends, because, you know, we are also seeing the election phase across various markets. So are you seeing any softness in terms of footfall during the quarter because of the election, or that's a non-event for you?
We've had some impact because of the heat wave, especially in Bangalore. The other two parks are okay. But again, the whole quarter is not yet over. And now I think in May there is a strong bounce back. So I mean, we'll have to wait for the end of the quarter to see the whole effect. But yeah, heat wave did have some impact on footfalls.
Sure. Lastly, on Chennai, any changes to the timeline or are you on track for commissioning second or third quarter next year?
We will be commissioning most likely third quarter. We are trying to finish in second quarter because we would like to be ready before the third quarter. There could be some delays because unseasonal rains plays havoc in Chennai sometimes, so we hope that that doesn't happen this year. If that doesn't happen, if there is no delay, we should be able to open either late Q2 or early Q3.
Great. Great. Thank you, Arun, and all the best.
Thank you. Thank you.
Thank you. We'll take the next question from the line of Subham Agarwal from Aequitas Investment Consultancy. Please go ahead.
Hello. Sir, am I audible?
Yes.
Yes, yes.
Thank you so much for the opportunity, sir. I have a couple of questions. The first is, I just want to know if focus is on the franchising model. Like, if, if you just give a name to someone who are, want to, develop a park, but it's pretty good for, selecting the brand. Is there, any thoughts on the franchisee kind of thing?
Yes, we are, we do want to get into management of parks without owning them. We have started a few discussions. Nothing has been done yet in concrete steps. Our immediate goal is, as you know, we are trying to expand into other territories of India. Our preference would be to do this on our own, but then geographies where we don't have land parcels, or if there is a local business person with land, who's willing to partner, and we are open to doing a joint venture as well.
Okay.
Management contract. Both, both are possible. Yeah.
Okay, sir, and the second thing, as you mentioned earlier, like you are, we are also looking for a potential park in Ahmedabad, but one of our competitor has already announced the park in Ahmedabad, so what is the like thought process coming after that?
See, they are. I mean, we are not going to comment on competitor, but they are, they are not looking at a large park like us. We build large amusement parks. They are looking at a small park in the city area. We are looking at a large format park, so I think format itself will be different. We want larger footfalls, like, our parks typically get more than 1 million footfalls in, from each location. So from, three parks, we get 3.5 million visitors. So that's the size that we are looking at. I think they have different—their parks are not as big. So I'm not really looking at that as a direct competition.
Okay, sir. Thank you. Thank you for my time.
Thank you. The next question is from the line of Suruchi Parmar from NX Wealth Management. Please go ahead.
Yeah, good morning, sir. Good afternoon, sir. Am I audible?
Yes, ma'am.
Got it. Just one question from my side. If you see, like, our footfalls are not growing, as-
Ma'am, I'm sorry to interrupt. If you would use your handset, the audio quality will be better, ma'am.
Yeah, yeah, sure. Yeah, am I clear now?
Yes, ma'am. Thank you.
Yeah.
You may proceed.
Yeah. Just I want to ask a question regarding this. Our footfall is not that much growing, and mostly the revenue is coming from the ARPU sales, the ARPU which is growing, the food portion rather than the ticket portion. Correct? And if we see the mature parks, in those footfall is not that much. If you see in Kochi and Bengaluru also, even Hyderabad. Now the new park which is coming, they have ARPU less than the matured ones. And the footfalls, we don't know right now how much it will be. So what is the percentage CAGR growth you are expecting in coming two to three years?
I already told you, yeah, our parks are mature parks. We don't, we're not looking at large footfall growth. Between, I mean, low single-digit footfall growth is all we can expect, especially from Bangalore and Kochi. These are parks which are more than 15 years old. And ARPU growth is possible because I think a lot of people, the way we sell our F&B and retail, we are looking at double-digit growth in ARPU, but single, low single-digit growth in footfall. If you look at our new parks, of course, they will grow a little faster because it's a new market and we are projecting only like 4 lakh visitors, which is less than half of our existing park. So there is definitely room for us to grow there.
Yeah. So what, what percentage CAGR you are estimating, like, in 2025, 2026?
Hard to estimate, hard to estimate, CAGR growth. You know, we will have... Because every project will be different. Like, for example, Chennai will have a higher base of footfall. Bhubaneswar, which is a tier two city, will have a lower base of footfall. So it's hard to predict, but we definitely have double-digit growth in footfalls for the next few years, if you look at new and old parks together.
Okay. What is your estimate of opening, like, new parks, till FY 2030? You have estimated, some number, I guess. Sir, I think 10, also.
We are looking at another five more locations-
Okay.
In addition to what we already have. We have one or two of them will get closed in before the end of this financial year, and the rest we will announce as and when they are ready.
This will be like completely your own investment, or you will be doing it like on lease basis or something?
We prefer to do the lease one, but we do both, our own investment also, or we could do management contracts. All three can be done.
Okay. Okay, so there, it's not like, any preference. You can go any which way you consider.
It depends on the location and whether land is available or whether a partner is available, all those things.
Mm-hmm. Mm-hmm. Okay, thank you so much, sir.
Thank you. The next question is from the line of Mythili Balakrishnan from Alchemy Capital Management Private Limited. Please go ahead.
Hi. Couple of questions. I wanted to check with you what you mentioned about the Odisha profitability, because while you covered the revenue part, you did not mention anything on the, how the EBITDA and the PAT would sort of look like.
See, it's hard to predict EBITDA and PAT because it's a new project, but because it's an asset-light model, wherein we have spent less than INR 200 crore for a large, pretty decent sized park, we are expecting it to be EBITDA positive from first year results. And at the PAT level, it should be positive from year two or three.
Got it. I also wanted to check with you about this, you know, when we talk about footfalls, at especially the mature parks, you know, I just wanted to get a sense is that, is there a capacity constraint based on, you know, the number of visitors the park can handle?
Yeah.
you know, without running into issues in terms of complaints and people are unhappy about queue length? Is that-
Yeah. There is a limit. For example, on a summer season, our parks are already running pretty full.
Mm.
It's hard for us to justify higher footfall.
Mm.
But there are, like, for example, Q2 and Q4, we do feel that there, there is some more headroom for us to grow.
Got it. But there is also some vacant space which is available in these parks, and
Mm.
- If you open more rides, then does that increase the capacity per se, or is that something... Is that not the case?
Like I explained, I mean, we, it can be done with a larger investment, wherein we open an entire new area into the park, not just one or two rides.
Okay.
Slowly we can do that, but as of now, I mean, we are not looking at any large investments like that. But if we do large investments, we obviously we can relook at adding more capacity also.
Got it. In terms of Hyderabad, we have seen a good, you know, kind of footfall growth which has happened, and this was clearly an area of focus for us. Could you just tell us a little bit more about the marketing strategies that have worked for pushing footfalls in Hyderabad?
Yeah. Hyderabad for us is relatively new. So the park is about seven years old in Hyderabad, out of which two years were COVID. So effectively, we only had five years of operations in Hyderabad. So for us, it's still a relatively new park.
Mm.
And if you look at footfalls in Hyderabad compared to, like, for example, Kochi or Bangalore, there it's only 70% of the other two parks. Whereas we feel that it should be close to 90%, or it should be at par with the other parks. So we still feel there is a headroom for us to grow footfalls in Hyderabad. So accordingly, we are also spending higher in marketing the idea of Wonderla Park to Hyderabad. And also we have not marketed extensively in Andhra Pradesh. We've only done Telangana till now. So we are slowly. This year onwards, we are marketing and we are appointing tour operators in other parts of the Telugu belt. So that also should help us to kind of get a larger catchment area.
So these are some of the initiatives that we've been doing. And also, Hyderabad is also sensitive to offers, so we will be doing some offer-led marketing and event-led marketing as well.
Got it. My last question is on Bangalore. Just wanted to confirm that the footfall grew, declined by 9% this quarter, right?
Bangalore footfall? Yeah. Yeah, yeah, yeah.
Particular reason for the Bangalore decline, because it was chugging away at a very good-
I think we lost our more footfalls in Bangalore and Kochi. Kochi actually had the highest footfall decline, followed by Bangalore. It's mostly to do with exams, and, because of exams, postponed, I think a lot of, schools and colleges canceled their, what do you call it? Trips that they used to do to amusement parks. So that is one of the reasons, I think, for us. This may or may not come back next year, so that's the only unfortunate thing here. We don't know whether we can predict it. To an extent only we can mitigate this, but, wherever...
So one of the reasons why we didn't see a big jump, drop is because we were able to, through other marketing initiatives, we were able to claw back some footfall in, February and March. So, I mean, we, we lose one segment, we try to do other, marketing in for other cohorts and try to get, footfalls there, and which works to an extent. So that is why we didn't see a big dip in footfall, and kind of, it's, it's still okay.
Thanks. Thanks a lot for your insight, and best of luck.
Thank you.
Thank you. The next question is from the line of Vivek Kumar from Bestpals Research and Advisory LLP. Please go ahead.
Am I audible, sir?
Yeah.
So, how fast will be announcing new... Are you waiting for election? Because you have done a lot of MOUs. How fast will you be announcing and taking up, or you want to wait till the Chennai parks CapEx is over and then start looking at new projects? That will be my first question.
No, no, we are already looking at other projects. It's just that we are not able to announce because governments are not functioning. This part of the government does not function during the election due to code of conduct. So we will not be able to sign anything in this period. Once the period is over, I think we can resume our dialogue with different state governments.
Mostly you're looking at Gujarat, Punjab and Uttar Pradesh and Madhya Pradesh, right? Or any other new thing?
Yes, yes, yes, yes.
So second question, what are the long-term drivers of your footfalls? Like, how do you think, is it like you have to keep marketing and keep going in to other places in and around periphery around the park or... And are you tracking how often people come, again, repeat customers, like, how many people come every year, how many people come in one to three years?
We do track-
So, one, if you can explain. Sorry, sorry, go ahead. Sorry.
Yeah, yeah. So we do track our footfall, where people come from and how people use, different cohorts use the park. There are some opportunities, like I said, you know, there are opportunities for us to grow in some markets. In some markets, they are already saturated, so we are not expecting growth in footfall. For example, Bangalore Park for us is a high-performing park and, you know, the base is so high that, you know, sometimes any small event can only lead to a decline in footfall because park already running at capacity, most at least Q1 especially. So it's harder to, you know, figure out footfall growth, especially in Q1 or Q4, you know, Q3.
Q2 and Q4, there is actually, we feel there is headroom to grow footfall. But again, these are exam seasons, and these are low seasons, Q2 being, monsoon season, and Q4 is usually the exam season. So that also plays, you know, into the, footfall. So it's hard to predict, how that will affect footfall. Every year, the story tends to be a little different. For us, the best way to mitigate this is to be in more locations and, you know, have always some projects in the pipeline.
Yeah, yeah, that's that. So are you keep tracking how many people come every year, how often the customer comes back and how much, how-
We have,
Do you track it?
People come once a year only.
... Okay. No, no, yeah, it's once a year, but one thing, how often they do repeat, like, I understand it's not, it's more like... So do you keep track? I'm not asking-
50% of our customers, they have repeat maybe once in two or three years.
Ah, okay. So, long-term drivers of footfall, what do you think is like adding more attractions? Because let's say you're saying Bangalore is already at peak capacity. So when will you think of adding capacity and trying to increase footfall there? Are you not meeting the demand? I think, so when will you take a call that, "Okay, boss, we need to expand?
Yeah, we are meeting the demand, but then because the business tends to be seasonal, sometimes during the highest season, like, there is not much headroom for us to grow footfall. We have to look at growing footfalls in the non-peak seasons. But non-peak seasons are non-peak because there are other hurdles like weather and exams and all that, which creates footfall barriers. So it's hard to kind of cut through that also. But we are always looking at new ways to see whether we can have, especially more group footfall. We are slowly changing our strategy, and I will hand over to Dhiren. He can talk a little bit more about that.
Hi. So I think from a long-term standpoint, we see the tourism and the tour operator segment as a big opportunity that we can unlock. I think that's a channel segment that can give us growth in Q2 and Q4, something that Arun also was mentioning. We see as a seasonal business, but there is a downside, and we have capacity that we can fulfill. We are also doubling down on a lot of our marketing strategies, and you will actually see that in the coming year, in the next two years. We're going big on digital. We are actually in a digital transformation journey of sorts, where we are actually tracking our entire customer journey and giving them reasons to visit.
We wanna increase frequency for sure. We wanna bring once in two to three years down to maybe once in 6 months. I think some of these strategies will definitely help us grow our footfall in the next two to four years. So the good news is that we understand the opportunities, and we understand the potential on the areas that we would wanna grow at.
Okay. So meanwhile, you keep expanding the parks and, keep doing these things, and you get the growth when it comes, right? That's so... Can we understand that right?
Yeah. See, I think, yeah, because, see, growth in the size is, and expanding the size of the park is also not that easy, because-
Mm-hmm.
Some of these parks are, you know, already pretty big, and we cannot grow them further without substantial investment. So we need to weigh that, you know, the pros and cons of it. So but, yeah, we do keep adding attractions. And also some of our parks are, like, Bangalore and Kochi are now more than 15 years old, so some of the old rides, we are replacing old rides with new. So even though we are investing in new rides, it may not add to the capacity because we are,
Yes.
taking away some of the old rides and putting new instead of the old ones. So there are multiple issues there. But eventually, yes, we can slowly increase the capacity of the park.
Till then, greater growth will be from locations, right? Can we take this? More locations, more cities.
More locations, I think, for us is an easier thing to do.
Yes.
Because, you know, there is also a latent demand in a lot of these cities, where there are no such avenues available currently.
Yeah, that is why I was asking, like, how fast will you launch the new projects? So okay,
Yeah, so I mean, we are doing it as fast as we can, as you can already see. I mean, we hope to open a new park every financial year. So this financial year, we are already opening this one.
Right.
Next year, financial year, we will have Chennai. The year after that, hopefully we will have something else to open as well.
Great. Great, great to hear that. So thanks. Thanks very much, Arun.
Thank you.
Thank you. The next question is from the line of Dhruvesh Sanghvi from Prospero Tree. Please go ahead.
Yeah, hi. Can you explain how you have reorganized your teams, considering... I mean, we are seeing some hires, which has just not happened at the top, but at the mid-level also. And, like, how are you delegating? Because, of course, the work is going to increase and probably double up in the next two to three years with new parks.
So the main changes happened, I think, we are reorganizing the team because couple of teams we are changing. Reorganizing our sales team and our marketing team is going through a bit of a reorganization. Because of the way we are also going through a digital transformation, our IT team is also going through substantial change. In fact, we have a new IT head who has joined.
So in the next one year, we will be investing, I think about INR 4-5 crores in new tech for our parks. So those are some of the big areas. Also, because we are doing multiple projects at the same time, we are also beefing up our projects team to such a point that we are able to do two projects simultaneously. So this is the first time that we are attempting that, and hopefully, we will. We already have two teams, but if the need be, we can also add more teams to this. So we're just waiting for maybe more signing so that we can start to work on this. But these are some of the.
So mainly marketing, sales, IT, and new projects. These are the areas where you'll see changes. Sure. And the way you built the new park in 13 months, that's like really amazing, I mean, it's very good to hear that.
... Can we expect something similar in terms of Chennai park? Because that will be bigger. So,
Yeah, no. Chennai park is more than twice the size of Bhubaneswar park, so it's not that easy. Also, the single window clearance, all those things that we have in Odisha, it's not available there, so things take a little bit more time. Also, the kind of machinery that we are importing, a lot of new machines are coming to Chennai, so those things have lead times, and as you know, there is also logistical delays importing material from Europe and all that. So because of that, I don't see, we, we may not be able... 13 months is impossible for Chennai, but we hope to finish within two years.
Okay. Just one follow-up question related to the previous query. So-
Uh.
Considering that we have already reached an optimal capacity of Bangalore, let's say.
Mm.
And the question that I think Vivek was asking-
Sir, I'm sorry to interrupt, sir. I would request you to kindly rejoin to give follow-up questions, please.
I was continuing one question, if you may allow.
Okay, sir. Please go ahead.
Yeah. So, the query was about the, let's say if we have 10 lakh capa- people coming in, in our Bangalore park, to materially improve it to, let's say, 50% growth over seven to eight years.
Mm.
We will have to have capacity increases.
Mm.
We know that we are at an optimal capacity. We have the cash flows, then why are we not taking the call to probably invest and add the capacities in the same area? If you can probably re-answer the same question.
So there are a couple of issues there. One is the park is old, so there's a lot of investment that we are doing is replacing old machinery, okay? So when we replace old machinery, the capacity does not improve. We are still incurring CapEx, but the capacity may not change, okay? And also, for a meaningful capacity change, actually, large areas have to be included into the park. So we don't do it like that. We usually add one or two rides per year and things like that. So, over a period of time, yes, you will see, like, for example, now Bangalore Park is comfortably, you know, holding 11-12 lakh visitors per year, which was a struggle maybe three, four, five years back. Now, that is not there.
So slowly, it will change, but it's not going to be a drastic thing, because that, that means we will have to invest heavily.
Yeah.
and we are not sure whether it makes sense to do that. That's all.
Okay, fine. Thank you.
Mm-hmm.
Thanks a lot.
Thank you. 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. The next question is from the line of Saurabh Jain from HDFC Life Insurance Company Limited. Please go ahead.
Yeah, thanks for the opportunity. I just had a bookkeeping question. So in terms of the drivers of growth, of revenue, so basically, footfalls into ARPU should be your revenue, right? For a particular park.
Yeah.
My question is on the existing park. Basically, Bangalore, slide number seven, if you see, quarter four, your footfalls grew close to 10%, ARPU was up 14%, but still the revenue decline is 13%. Was there any one-off in the base quarter, or why the numbers are not adding up?
I think Saji will answer that.
Yeah. This is mainly because we had certain other income in all the parks, where we have reversed some of the transitional credit of service tax, which has been provided in the books in the year of 2017/18, which has got a favorable order from the department and which got reversed in the books of accounts in the current year, which resulted in somewhere close to INR 9 crore overall in the other income in the current quarter as compared to the previous year. That's why. That's why the number is not tying up. Bangalore, if you only see the operational revenue, there is about some 3% YOY basis growth available.
On an overall basis for the quarter, we have about somewhere close to 1%, 1% year-on-year growth is available across all the parks plus resorts.
Okay, yeah. So that was the question on my end. Thank you.
Yeah.
Thank you. The next question is from the line of Meet Jagani from Jagani Investments. Please go ahead.
Yeah, hi. Thanks for the opportunity. My first question is just a follow-up of the question asked by the previous participant. You said in the existing park, we replace some of the old machineries or rides with new one. So what will be the amount of maintenance CapEx that you would be doing in a year, particular year, kind of figure, any?
We typically spend 10% of our top line from a particular park, as we earmark it and keep it for adding new rides to the park.
Oh, new rides to the existing park, right?
Yeah, yeah, yeah.
Okay. There is a rise in employee expense this quarter. Is it to do with the Bhubaneswar park?
Yeah.
No, Bhubaneswar park is getting capitalized for the time being. So the salary cost increase is mainly due to two reasons. There is actually 16%, salary revision, a 16% revision in the salary post as compared to the previous year. And at the same time, we had a headcount increase for this quarter as well as for the year. There was about some 16-... numbers have been added to the corporate team in the current year and even to the parks as well. And then 38 numbers have been added during the full year. So mostly these are the two changes, two drivers which caused us increase in our salary cost. And apart from that, from February onwards, we are accounting the ESOP expenses. Company has granted ESOP to some of the senior employees.
The ESOP expenses are also getting accounted in, started from the current quarter, which is about INR 1.3 crore in the current FY.
Okay. Got it. Thank you.
Thank you. The next question is from the line of Kanika Gupta from SG Investments. Please go ahead.
Hi, am I audible?
Yes.
Yes, ma'am.
Yeah. Hi. Thank you for the opportunity. So I just have two questions. So first one is that I can see the dip in the margin of 28% quarter-on-quarter. So I just wanted to know if this margin dip is sustainable, like till when we are hoping to see this decline in margin? Like, what are your viewpoints on that? EBITDA margin.
Saji, you can take that.
Yeah, EBITDA margin in the current quarter, the decrease mainly because of two, three reasons. One is the salary revision, salary change, which I already explained now, because of the new addition to the team, as well as 16% revision in the salary rate in the current FY as compared to the previous year, which cost us about somewhere close to INR 4.3 crore for the current quarter. And the same time, the operating expenses in that we have about the overall employees, where we added about 110 employees for the quarter and then 130 employees for the financial year. And then there is a rate increase of about 21% for the FY.
Then rest of the things are related to the revision. Sorry, 19% and 21% is the total wage increase. Out of which, 12% is due to the rate revision. These are two reasons. Apart from that, in the previous year, we had about INR 9 crore of service tax transitional credit reversal in Q4 of last FY. And this year, that particular reversal is not available, which has resulted in a reduction in our other income of about INR 9 crore in the current FY. So consolidately, these are the two, three reasons which have resulted in EBITDA shrinkage. And to add to that, then there is a little reduction in the footfall as well.
Okay. So, is that sustainable like in for FY 2025 or anything? Can you just provide us that this dip will be there coming years as well?
Sorry, I couldn't hear you properly. Could you please be a little louder?
Okay. I'm saying that the dip which is, which we have seen in this quarter, are we expecting in the future year, like in FY 2025 as well?
There could be, currently, in the next FY, we are adding some of the, I mean, Bhubaneswar park into our kitty. There could be some little shrinkage in the margin percentage of about 3%-4%. Apart from that, we are not overseeing, we are not seeing any change in the operational margin levels.
Okay. Okay. So thank you for this answer. Next question is about the Wonderla Resort. As I could see that there is a decline in the occupancy, despite the revenue has been increased and the average room rental has also been increased. So could you please explain or tell us, like, why the occupancy has been declining in the resort business as well? Yeah.
So the previous year, we had long stay customers, guests who were there at the resort. And then the current year, this is mainly because of some of the industrial units next to our park, which is a bit of the industrial area, and which was one major source of our resort occupancy. But current year, there were no major long stays. So that's the reason why the occupancy has reduced from 20%-55% in the current FY.
Okay. Thank you so much. Thank you and all the best.
Thank you.
Thank you. The next question is from the line of Naman Shah from Monarch Networth Capital. Please go ahead.
Hi, hi, sir. Congratulations on the Bhubaneswar park. I just had one question. I just wanted to understand on the CapEx spend for the Chennai park and total amount of CapEx you are planning to spend?
With the Chennai park, we had a revised budgeted expense of somewhere close to INR 515 crores. Including the orders what we committed, we have about INR 194 crores has been committed or paid during till March 31, 2024. The Odisha park, we had a budget of about INR 189 crores, and we are at the last leg of completing it. So probably we'll be finishing it out, so maybe around INR 190 crores.
Okay. Thank you. That's it from my side.
Thank you.
Thank you. The next question is from the line of Mukund Jain, an individual investor. Please go ahead.
Hello sir, thanks for the opportunity, and congratulations on the Odisha park. Basically, you started one quarter earlier than the guidance. Particular question on the Odisha park, basically. So since the park is now starting, you would have estimated the amount of expenses which you are going to incur, like the employee cost, the lease which you are going to pay, and all sort of that. So can you please give rough figure about that on an annual basis?
... ji, sorry, sorry, I couldn't hear you properly. Maybe little, I'm not getting able to hear you clearly.
Sir, may I request you to please use your handset, Mr. Jain?
Yeah, I am on handset. I'm audible now properly?
Okay, sir.
Yeah, yeah.
Please continue.
Yes, sir.
Yeah. So basically, Odisha park, you are about to start, and you have, you would have projected all the employee costs, the lease outflow, which you have to end, and the other expenses. So can you guide the internal estimate about your numbers for this park?
Because it's being a new park, I would not be able to give you a guidance on that. But, the lease payments are like a one-time payment, which you already included in our project cost, which was about somewhere close to INR 6 crore. And then, the major drivers is like our, salary cost, off-roll, as well as the on-roll. The on-roll cost, that could be somewhere close to 10%-12% hike from the present level by after, once you include Bhubaneswar park into the kitty. And then, for the off-roll, we will be having about some 300+ employees, on a monthly basis. And per person, the salary could be about, INR 20,000-22,000 , per month.
And then, we are, as a projections and as being a new park, we are expecting a, almost like a break-even from the current year of operations, and then maybe will be on maybe a single digit, EBITDA in the current FY. And maybe from the next year onwards, then we would be able to, generate the, you know, EBITDA as well as for the PAT levels.
Sir, the participant has left the queue. We will move on to the next question, which is from the line of Angad Katdare from Sameeksha Capital . Please go ahead.
Yeah, I just have a follow-up question on the Chennai park CapEx. So you mentioned the revised CapEx is INR 515 crores. If I recall, it was around INR 350 crores. Can you just provide a breakup of the revised CapEx, and how much of it is spent, and how does it include the land cost as well?
Yeah, it includes the land cost. Initially, we budgeted with a lesser number of rides for the Chennai park, and later on, the number of rides has been revised. That's why the cost has increased by, increased to INR 515 crores. So we already spent about some 190, 194 crores so far in the project, including the orders what we have committed.
Got it. Thank you.
Thank you. The next question is from the line of Sunil Shah from SRE PMS. Please go ahead.
Yeah. So thanks for the opportunity. So just to understand, you know, if I'm looking from next five years, seven years point of view, what really should be done so that our footfalls, which are like about 35 lakhs, can go up to, say, 1 crore or so? So on one side, you know, we are having mature parks, wherein we are talking about low single-digit growth. So obviously the growth journey is going to be from new parks. And in the new parks, this year we'll be having Bhubaneswar, next year we'll be having Chennai, and, uh, Gujarat and Punjab, UP, MP, all those kind of things. So what about religious tourism? That has got a great potential.
Are we planning anything for that segment, those areas, and put up theme parks in that locality, those vicinity, where actually the footfalls can be much, much higher? So any thought, any direction, anything on that, if you could think or, you know, if you could just share something on those lines?
See, religious tourism may have high footfall, but I think your ARPUs will be very low. So if you look at, the parks which are around religious tourism, I think they are also tend to be very, very low, maybe in, not even triple digits. So, that's the only issue. We are in the business of running large format amusement parks, so we want to stick to that. We have been invited by various state governments, like, for example, UP, to do something in Ayodhya, but we are still waiting for the, you know, it to be a little more developed, and then maybe we can do something there. But other than that, we want to, we want to focus on metros where we have larger populations living and, we want to be a regional theme park in that sense, right?
So because of that, I think we need a huge catchment, population, like for example, in Bangalore, Kochi, Hyderabad. These are huge catchments, so like even after 20 years, we are still getting footfalls. There is no issue in terms of catchment. So that's the way we are looking at it, and, we are currently in only four cities. There is a lot of cities that we want to cover. So that will be the strategy that for us, that, that we're going to be taking.
Okay. So then two points. One is we are looking at rolling out at least 1 theme park every year from here to for the next four, five years, every 13 months or so. And the second point is-
Ah, roughly, yeah, one every year or one every year and a half, we should be able to start a new park.
Sure. And so this would be all internally funded, because when you are doing the Chennai park, we... That's a huge fund flow, more than INR 500 crore. So going forward-
We'll be looking at some fundraise, some amount of debt, and, depending on how many projects we sign in the next year or so, we'll take a call on that. We will, we'll be definitely doing some fundraise in the form of either debt or equity, or most likely a combination of both.
Okay. Once Chennai is rolled out again, then the cash flows from there would help us to again come back to our original level of maintain net debt-free company, kind of a thing?
... Yeah, yeah, I think we will not have too much debt. We don't need because our all our assets will be EBITDA positive at any given point. So we will not see a huge cash burn at any point. Only the thing is the investments, new projects, especially large projects, the investment needs to be covered.
Okay. So one last point. I mean, we have clarity on Bhubaneswar and Chennai. Any indication on the other projects post those Chennai rollout?
We will, we will let you know whenever we sign. We're not. We're close to doing a few, couple of deals, but whenever it's ready, we will let you know.
Fine. Fair enough, sir. Thank you so much, and all the best. Bye.
Thank you. Thank you.
Thank you. Ladies and gentlemen, this will be the last question for today, which is from the line of Arul Selvan from Independent Advisors Private Limited. Please go ahead.
Hi, can you hear me?
Yes, sir.
Good evening. I just had a couple of questions. One was, with respect to your, useful life assumptions for the Odisha park. Just want to understand what would be your thought process on it?
Generally for the useful life, for the rides?
No, just for the general, yeah, for general, parks. I mean, how much kind of depreciation, how would you then look at, you know?
Park, useful life is, yeah, Saji, you can answer it.
Yeah, asset side, for the plant and machinery or like these rides and things like that, we are depreciating over a period of 10 years.
Okay. And with respect to your mature parks, with respect to Bangalore and Kochi, I'm guessing that most of them would have been already heavily depreciated, right? There's no change in that.
Yeah, this is a common policy which we are following from the beginning, so there is no change in that. All the parks, across the parks, we are using the same thing.
Okay, okay. So that's fine. Another question I wanted to ask is, like, just from a qualitative perspective, how different are each of your parks? I mean, if someone goes to, let's say, Kochi or Bangalore, I understand what would be the variation in their experience if they come to, let's say, a different, newer park, like Bhubaneswar versus the older parks?
Yeah, they are all different. They are not the same. They have commonalities in terms of, some rides. They have common rides.
Mm-hmm.
But the experience is different. They are not the same. They're all different. Especially Bhubaneswar is completely different from everything else we have done. In fact, there are no, hardly any common rides with other parks. Chennai will also be a completely different park. We don't have any, too many, common rides. Of course, some, like for example, our iconic Sky Wheel and some Giant Wheel , some rides will be, some water slides, all that will be common, but some of the other hero rides will be different.
Okay, so with the Chennai ride will also be very, Chennai park will also be very different from the Bhubaneswar park as well, right?
They are all different. Now, going forward, all our parks are going to be different.
Okay, okay. And the last question I have is actually kind of a follow-up from a previous question. This is with regard to the reinvestment that you would have to be putting in your parks. I think the last thing you said that it's 10% of the top line from each park. Am I right?
Yes.
Would that be different for, let's say, the newer parks like Hyderabad and Bhubaneswar versus the more mature ones?
No, they'll all be there. Over a period of time, they'll all be around the same. It's not different.
Right. But then, I mean, I was thinking that, you know, with Bhubaneswar especially, now it's just starting, right? How long would it be before you have to actually start putting up newer rides in Bhubaneswar?
It's hard to say, but we might have to start putting rides in quickly if the crowd is huge. We are already sold out for the opening weekend of Bhubaneswar, so I think it's going to start strong. Depending on the response we receive, we will have to add quickly or not so quickly. We will have to take a call later.
Okay, so higher the response, the faster the replacement?
Yeah, yeah, yeah.
Okay. So, that helps a lot. Thank you very much and all the best.
Thank you.
Thank you.
Thank you, sir. As that was the last question for today, I would now like to hand the conference over to the management for closing comments. Over to you, sir.
Thank you all for joining Wonderla Holidays Q4 FY 2024 conference call. We are happy with your, that you have shown commitment to our company and our growth. We expect to deliver better numbers and growth going forward. We are bullish on this segment, and we are looking forward to creating new adventure and amusement spaces for our Indian customers. With this, I would like to conclude. Thank you.
Thank you, members of the management. Ladies and gentlemen, on behalf of Monarch Networth Capital, that concludes this conference. We thank you for joining us, and you may now disconnect your lines. Thank you.
Thank you.