Ladies and gentlemen, good day, and welcome to Wonderla Holidays Limited Q4 FY 2022 results conference call hosted by ICICI Securities. As a reminder, all participant 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. Rushad Kapadia from ICICI Securities. Thank you, and over to you, sir.
Thank you, Lizan. Good afternoon, ladies and gentlemen, and welcome to the Q4 FY 2022 results conference call for Wonderla Holidays. We have with us from the management, Mr. Arun Chittilappilly, Managing Director, and Mr. Satheesh Seshadri, Chief Financial Officer. Without further delay, I would now like to hand over the floor to the management for their opening comments. Thank you, and over to you, sirs.
Thank you. Good afternoon, everyone. Thank you for joining us today. We extend a warm welcome to all of you at this conference to discuss the results of Q4 for FY 2021-2022 for Wonderla Parks & Resort. I'm pleased to inform you that our company has delivered a healthy performance in the midst of a pandemic year. We registered a revenue growth of 232% YoY, with revenues at INR 127.5 crore in FY 2022 compared to INR 38.4 crore in FY 2021. This performance reflects our brand strength and public trust in our company and our offering and the strategic clarity on achieving growth and operational excellence. The results are a clear endorsement of our salient, resilient business model and asset quality.
Also, our stakeholders depend on our ability to provide a safe and hygienic environment for our employees and customers. The parks were closed from mid-April till the beginning of August due to the Delta variant, and in December and January during the Omicron variant, and it posed a great challenge for us. However, our focus in terms of leveraging digital marketing, scaling content, consistent park activities, experiments in thematic and F&B and retail innovations with seamless execution helped us to achieve a solid finish for the year with marked improvement in our revenue and EBITDA positions. We are constantly making efforts to please our customers with innovative ways. There are so many different events that we have done in the last quarter.
One of which was Women's Day, where we recorded the highest footfall ever in our 22-year history of 32,000 visitors. This event response was the most encouraging, and the crowd enthusiasm was at its peak. All our initiatives received such tremendous responses from our customers. As a result, our total footfalls for the quarter exceeded 4.9 lakhs and a total of 10.5 lakhs for the full year. The Q4 footfall helped us to breach the pre-COVID level of revenues for the quarter, EBITDA, and PAT. Q4 started out with a fresh round of government restrictions because of the Omicron variant. We had weekend lockdowns in Kochi and Bangalore.
The footfalls improved only towards the end of February, but from March onwards, the footfalls have been pretty robust. The footfalls were dominated by Women's Day and our Holi celebrations. All three parks recorded the highest marked footfalls since their respective openings. We are pleased to inform you that the company has returned to a positive EBITDA, and we are dedicated to offering memorable experiences to our customers, and our performance is a testimony to our resilience and our employees' superb customer service and commitment. We also continue to strengthen our brand value and target to cross new growth and operational milestones ahead. Thank you for your continued support, and I look forward to seeing you in our parks soon. Thank you.
Should we open up for questions?
Yes, please.
Thank you. Ladies and gentlemen, we will now begin with the question- and- answer session. Anyone wishing to ask a question may please press star and one on your touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants, in order to ensure that the management is able to address questions from all participants in this conference, we request you to limit your questions to two per participant only. If time permits, you can come back in the question queue for a follow-up question. The first question is from the line of Himanshu Pandey from o3 Capital. Please go ahead.
Yeah. Hi. Good afternoon, and congrats on good set of numbers. See, I am attending the call for the first time, and I have some basic queries, okay? The first question is: Would it be right to say that for a successful park operating company, the two things to look for are how they sweat the assets more and the novelty factor every time the customer comes? Besides good experience and safety. These would be the two critical factors for success? Hello? Hello?
I hear you. You didn't complete your question. I couldn't hear the last part of it.
No. This was the basic question. The first question was, basically, for a successful park, operating company means the two success factors are these two. How much are we able to-
I think operational excellence is paramount because safety is the big issue and cleanliness and hygiene. Those are the gold standard. Only the parks which can do that very well will get. Then of course you need to continuously add new attractions and new events and new things to entertain your guests. Yes.
Secondly, do you think that beyond the point increasing the number of rides will have a limited ROI? See, we have a decent size of land in the three operating parks and have a good number of rides, and we can take them to 70, 80 in future. Beyond the number, will the ROI need not be met through the rides only and
I think our parks are pretty big enough, especially Bangalore and Kochi. I don't think we are planning to add any more rides. If we are going to add any rides now, we will remove some of the old rides. That's what we are doing. For our capacity of about 12,000, I think we already sufficiently have enough rides. We don't want to add too many rides. Depending on, you know, the year and, for example, the kind of rides that we added in 2002 or 2003, very different from the rides we are adding now in 2022. That way, I think, I mean, obviously the kind of experiences we are giving is slightly different. Yeah.
I hope that answers your question.
We will still have undeveloped land. What can be the future development plans here? One thing related to this.
We are not planning anything right now when we might add more rides or we could add other facilities. We have not thought about it because land, historically has been got for us at very cheap valuations.
Okay. See, if we start getting or if we want to reach something like this one.
Sorry, actually you've already finished three questions. Could we ask the next person to ask questions?
Okay. I'll join back in a few minutes.
Yeah. I think two questions per person, please. Thanks.
Thank you. The next question is from the line of Sanjay Awatramani from Envision Capital. Please go ahead.
Yeah. Thank you so much for giving me this opportunity. Just wanted to know what is this other counter collections and cooked food share revenue?
Yes, please. In the park, there are few counters which we have declared, given on revenue share model. Okay? The revenue from those are from share from concessioners, number one. Number two is the other collections are basically we have what the digital watch and other locker fee and other things what we charge. That is the other collection. Thank you.
Okay. The next question is, what is the progress on Chennai and Odisha Park, which we were planning to open? What is the total expected CapEx which we are doing for Chennai?
Chennai, right now it's on hold. We have not really started any work there. We have invested about INR 100 crore, mostly in land itself. We have another INR 300 crore. Total I think about INR 400 crore investment, INR 350-INR 400. I think we don't know the exact number yet. But we have an outstanding issue with the taxation there. Unless that is sorted out, we will not be able to start. We are negotiating with the, I mean, we are talking to the Tamil Nadu government to see if we can find a solution. At that point, whenever that is done, we will start work. I think it is looking positive.
We should be able to do it before the end of this financial year. I think we will have to. We will decide one way or another. Odisha is a smaller project, about less than INR 100 crore. That one I think is, again, Odisha government has invited us to set up the park there, and they are giving us, you know, land almost, you know, for a very nominal lease and things like that. We are planning something smaller. It'll be about, less than INR 100 crore investment. Our ticket price also will be lower. For us, Bhubaneswar looks like an exciting market to go to do a light version of our park. This project I think, should be able. We should be able to get off the ground this, financial year itself.
Just a follow-up on this Chennai one, that you're positive that you will start construction work or the construction will be completed by FY 2023 end?
We'll start. I think we will take a decision on Chennai and Odisha. Odisha is already progressing. Chennai will take a decision on whether to construct or not in this year. Then accordingly we'll take, you know, depending on what is the. Because currently it's not viable for us to build the park, because the taxation there is very high. If that is not removed, then I don't think we'll be able to build. That call we will take this financial year. That's what I meant.
Okay. Last thing I wanted to confirm was what will be the CapEx for FY 2023? The Chennai thing you mentioned that INR 350 crore-INR 400 crore exact CapEx is not yet in line, right? I mean, which is the additional-
We don't know yet. Including the land, I think we are proposing less than INR 400, but we will have to see how much the
Satheesh, you have, we don't know the.
Yes, sir.
Anything yet, right?
Sir, actually, you said correctly. We are still waiting for the approval from the government to waive off the entertainment tax. Subject to that, we are not starting the project. Otherwise, we would have started the project, number one. Number two, the initial projected CapEx was at INR 330 crore. Based on the approval when it comes, we have to redo the estimates. Possibly it could go up by another INR 10 crore or INR 20 crore on the Chennai project. Odisha project, the initial outlay is about INR 120 crore, including the fees which we have paid to the government and other things. That's where it is. The construction schedule is about two years from the time we start the construction.
That's how we work.
Last thing, sir, CapEx for FY 2023. This will be the last from my end.
See, we have got sustaining CapEx. Every year we have over INR 30 crores of sustaining CapEx and some new rides what we propose for the parks, okay? For the project, we have identified initial payment about INR 10 crores to the government for the lease completion and everything. We have identified earmarked about INR 50 crores for this year for the park approvals if it comes in Odisha. Okay? That's why we have earmarked. While we are very positive on the Chennai project, still we are not able to put a date when the government will give the approval. Okay?
Okay. Okay. That's all from my end. Good luck, sir.
Thank you. We'll move on to the next question. That is on the line of Kaustubh Pawaskar from Sharekhan by BNP Paribas. Please go ahead.
Good afternoon, sir. Thanks for giving me the opportunity, and congrats for good set of numbers. My question is on footfalls. This quarter, despite the fact that there was a third wave scare, we did 4.94 lakh footfalls. Out of that, in March itself, we did around 3 lakh footfalls. Now we are into our you know, season, like April, May is one of the strongest season to date for us. Should we expect footfalls to be much better than what we clocked in March? Considering the run rate, should we expect your footfalls to reach the pre-COVID level in FY 2023. We are expecting at around pre-COVID level. We are not sure yet, because again, the quarter is not over.
We could go above or below, but we don't know. As of now, the footfalls are healthy, yes.
Right. Any thought process for the year? Because we have been hearing from the hotel industry that domestic leisure travel and domestic tourism was getting low because of the pent-up demand, there is a strong uptake.
As of now, yes, it's looking very strong. Again, like I said, I keep repeating it again and again, but we don't know, right, about COVID. Is this going to come back and it's going to affect again? We don't know. Hopefully it will not happen. If that is the case, then obviously, things should be good for us this year. If there is a scare of another round or, sorry, another wave and things like that, then obviously those things have to be considered.
Right. Sir, earlier you used to provide the footfalls for all the three parks. Can you just, you know, help me with the footfalls for three parks and the apples?
Yes.
Is that a park?
You can reach it out separately and for the quarter we will give. Not month wise. For the quarter we can give it.
Quarter. Okay.
Yeah. You can reach out to us, separately, please. Yeah.
Sure. I will do that. Okay, thank you.
Thank you. The next question is on the line of Dhruvesh Sanghvi from Prospero Tree. Please go ahead.
Yeah. Can you expand a little bit more on what is the exact reason for reconsidering the Chennai thing? I mean, on the taxation side, with some numbers, if you can highlight state-wise or some thought process around it that why is it so important?
The tax on tickets in Chennai is 10%. The GST we pay on ticket is about 18%. But on top of that, in Tamil Nadu, there is an extra 10% tax on every ticket that is sold in every amusement park or movie theater. That makes our project unviable, especially a large project.
This is 28% collectively, right? Or 38%? Sorry.
28%.
28% Okay.
Taxation, yeah.
Right. Does it mean that probably, you know, three to four years waiting and then making this decision when probably, I mean, the income of the country or some macro numbers start to look favorable, considering that the 28 remains 28 or it will still be unviable or that is, I mean, some thought around it, of course.
We don't know. We are trying to get the 18% on the GST on the park, amusement park ticket itself is very high. It used to be less than 10% three to four years back. Now that has become 18%. Now, we will not be able to sustain high CapEx in this sector if you are going to charge 18%, more than 18%, 20% tax, because then the viability of the project itself will be suspect.
This is not only for Tamil Nadu. Any state, if the tax on ticket becomes very high, for this is essentially an infrastructure kind of business where it's the large CapEx fully upfront, right? We will not be able to, you know, this will not make sense for us business-wise. We'd rather look at other states like Bhubaneswar or Ahmedabad. Sorry, in Gujarat where we've been invited. Wherever we get invitation from the government to set up the parks, we will look at it favorably.
We were invited by Chennai government, but this was five years back and since then, Jayalalithaa passed away, so many things have happened. Now it's DMK rule and they are willing to relook at this whole thing. The problem happened only after GST because pre-GST, the tax on ticket in Tamil Nadu was 10%, that was always there. But there was no other, the other taxes were not there. It was only 10. Once after GST came in, this 10% they retained it.
Okay. That's the issue.
Yeah.
All right. One question related to, I mean, you know, when we look back at almost all the con calls, of course, I'm not talking about the COVID years of two years. Pardon me, this question is a slightly longer one. Sorry.
What happens is, you know, we as investors are probably thinking that over a longer period of time where affordability starts to kick in better, there is a chance that this 7 lakh, 8 lakhs average footfalls per year can probably go to 10 or 11 with slight increases in the ticket prices as well. Let's say 4%-5% a year kind of a scenario. Is this the thinking that even you have as an assumption and how much more work do we need to do to expand that 7 lakh to 10 lakh on a sustainable basis?
See, 7 lakhs to 10 lakhs is not should not be a problem depending on the year and if there are, you know, favorable conditions, economy is doing well. If everything is good, then obviously we will hit 10 lakhs, and we have hit that in the past. The last time we hit that was I think 2016 or 2017. Ever since the GST regime, because our ticket prices have gone up and I think the consumption also has been little muted, especially in our sector. But I think if things improve, we will be able to see those kind of numbers again.
Also, it is a function of the marketing that you do. I think we were not into digital marketing those days. We were doing a very different kind of very traditional marketing. That has completely changed in the last one year, especially post-COVID, and that is why we are seeing huge numbers, you know, especially, you know, odd months also we are getting good footfalls. Too early to say what number we will hit, we will see.
Sure. Fine. Thank you, and best of luck. Thanks.
Thank you. The next question is from the line of Surendra Singh Reddy, an individual investor. Please go ahead.
Good afternoon. Thanks for giving me the opportunity. My question is more about efficiency of park operations. For example, I recently read a conference call from Six Flags, where the CEO said nearly 30% of the seats on coaster rides are empty every time because groups don't-
Sorry, I didn't understand that. What you are saying?
Sorry. Let me go slow. This is about.
Yeah, a little slow.
Yeah.
Sure.
Yeah. This is about efficiency of, especially rides. I went through a recent con call from Six Flags where, CEO was saying 30% of the seats were empty because groups who don't want to split up. In order to drive out those inefficiencies, they set up single rider lanes. Can you shed some light on inefficiencies in our park operations and,
We don't have those kind of problems. We have people, we fill up every ride.
Yeah.
Initially, yeah, during the COVID months, I think we used to follow, but now we are filling up our rides fully.
We don't have those kind of thing like groups don't want to split up.
No. Some very small numbers. I don't think it is significant enough for us.
Great. Good to know. Other thing, do we have any longer waiting lines at food courts or something like that where customers would be disappointed waiting for hours and get back to the rides or something like that?
Going to any amusement park means you are going to wait.
Yeah.
I don't know whether you've been to any amusement park, whether it's international or Indian. Part of the thing is waiting. Because we only have certain number of rides, and depending on the crowd, there will be waiting involved. Right now we are in the busiest season of our, you know. People do have to wait at least, 15, 20 to half an hour, maybe like for our roller coaster they have to wait for 45 minutes. But that's normal. That's how the industry works.
Got it. Yeah. The only concern is like I've been to Arlington, Six Flags. The concern here is that, yeah, you end up waiting long time and you miss some interesting rides.
Yeah. That's part of it. If you go to Disneyland, you'll have to wait even more.
Yeah. Got it. You guys always working on driving out these kind of inefficiencies.
Yeah. I mean, in India, I think we do try to reduce queues as much as possible because generally in India, you know, discipline is also a bit less. We are very aware of it, but I think there is some amount of queues inevitable. I think generally in our parks we have a very efficient system of managing our crowd between the water park and the dry park, and not really has too many. If you look at our online reviews, maybe in our peak seasons you will see you know, queues are long. Otherwise, it's not a very big problem for us.
Great. That's really good to know. I haven't been to any parks. Sorry about that. Do we have any displays installed across the park about the waiting time or something like that?
Definitely. Some of the rides, some of the popular rides we do show waiting time, yes.
Great. Okay. The customer is, like aware of the ride.
He's aware that this is a, yeah, either he can see, and it's also very evident when you see the queue.
Yeah.
You know that this ride is popular and people are waiting, right? That's great.
Great. Okay. I think that's all from my end. Thanks for answering questions.
Thank you. The next question is from the line of Monica Arora from Galaxy Investments. Please go ahead.
Thank you for giving me the opportunity. Congratulations on good set of numbers, sir.
Thank you.
You told that you are planning some CapEx expenditure. Like, any plan to take debt exposures or you are planning to infuse more equity? Like, how you will be funding this?
I think we have internal accruals for whatever CapEx we are planning to do this year. We might take some small amount of debt, yes. That's it.
Okay.
Satheesh can give more.
And how-
This year we're not planning any debt. Now Satheesh can give more light on that.
Yes, yes, sir. As of now, if only Odisha park comes, we can go ahead with the internal accruals if only one park starts. If more than one park starts, then we might go for a debt proposition. In a normal year, we generate more than INR 100 crores per year, so the internal accruals should be sufficient to take care of the expansions.
I may have missed it, sir. How much is the CapEx plan, sir?
Okay. For the Odisha project, the CapEx plan is INR 120 crores for Odisha project. For Chennai project, the estimate is about INR 330 crores. Both of it can go up based on the situation and the experience required there, number one.
Yeah.
Number two, currently, as of March 31st , we have got more than 100 and about 120 crore INR in hand. That can take care of the immediate requirement. Construction period is two years, so there will be internal accruals during that construction period. If both the parks come together, we might need some loan, which we will approach the bank.
Okay, okay. How is the overall scenario in terms of your capacity utilizations, if I talk in the park? After all these COVID pandemics or cycles, second cycle and all this, now do you see that the situation on the ground is normal like pre-COVID? People are coming as usual. How is it, sir? Would you like to-
Yes.
Throw some light on that?
Right now it's better than pre-COVID.
Yeah.
Right now it's better than pre-COVID. We are also experiencing the whole phenomenon of revenge travel and tourism.
Yeah. Yeah.
You know, we are seeing that extra demand.
Right.
We don't know how long that will last, but definitely feel that if there are no further waves, this year should be a good year for us.
Especially because it is an ongoing summer vacation kind of a thing right now. In terms of other things.
No, for example, March is not a summer vacation. It's a time when we have all the schools are.
No, I'm asking about the ongoing, like right now. Right now.
I'm giving you an example that March is-
Yeah.
Traditionally a very weak month for us. This year we've done traditionally what we do in April, we have done in March.
Oh.
April is season and March is off season. We have done April numbers in March, right, Satheesh?
Oh.
Yes, sir.
Yeah.
That's wonderful.
April has been very good. Yeah.
Yeah. Yeah.
If that continues, let's see.
Yeah. That's wonderful, sir. That's wonderful.
Ma'am, see, please, understand that the management has taken very proactive steps in terms of leveraging the digital marketing.
Yeah. Yeah.
Innovation and F&B and retail. We are improving the retail footfall, adding more content to the media and by bringing all the influencers and doing park plus events. Okay?
Sure.
Also encroaching the other markets. We are also going, trying to do something with the north and other things. We are doing all the positive steps, and I think these things will add on to the footfall and you could see a good trend coming up or building up in the near future.
That's great. It's really wonderful to hear that, sir. Thank you so much for answering all my questions so patiently. Thanks.
Thank you. The next question is from the line of Manoj Dua from Geometric. Please go ahead.
Most of my questions have been answered. Could you throw more light on little bit on the new initiative like digitally taken in some food and beverage, anything which was not-
Yeah, I think, yeah, basically we are doing a lot of experiments. I mean, we can't tell you everything about it, but because there's a huge list of things that we are doing. But it all comes from a lot of analytics based marketing that we do online, which I think we have, we've been able to crack that very well. We have completely stopped using traditional media, and we use only digital marketing. We do use traditional media only as fillers. Unlike before, when we used to rely more on traditional media and less on digital. That reverse shift has happened after COVID, and that has worked really well for us because our marketing spend has come down. At the same time, our footfalls are going up.
I think that's it. I mean, it's still an emerging phenomenon. We are still doing a lot of things. The full result of all that is yet to come.
Great. As you said, your booking has been digital now as 50% as compared to 15%. Somewhere I read about that. Is it true, sir?
Yeah. About 30% I think for all our online bookings so far have been online, it's only 10% I think pre-COVID. Now that has become 30%.
Okay. As you're getting more and more booking through digital, any data analytics, any insight you have got more about-
That's why we know the kind of customers who are coming to us. We are using that to retarget and, you know, do remarketing and a lot of other things which we never could do before. That is also helping us to improve footfalls.
Okay, thank you. I will join back in the queue.
Thank you.
Thank you. The next question is on the line of Vivek Kumar from Bestpals Research & Advisory. Please go ahead.
Thanks, Arun. Thanks for the opportunity. My first question is on if let's say Chennai gets delayed, what is the next park or the state or location that you are looking at? My second question is, okay, this year there's a revenge kind of a thing that you are alluding to because of which you are seeing demand. What are the steps that you think one should take to make sure that this repeats, even if, let's say, there's no COVID and on a normal year, how do you make sure that you grow on top of this year and sustain those footfalls? Thank you.
Very hard to say how we can sustain footfalls on top of a revenge tourism year. We'll have to wait and see. Like I said earlier, we've done a complete change in the way we do marketing to our customers. We have much more insight. We have a lot more insight on who's coming to our. You know, what kind of people are coming, where they're coming from, what is the age group, what is the demographic. We know a lot more information now, so I think we are able to target our marketing a lot more precisely. You know, instead of carpet bombing, we do more laser-guided marketing. So that has really helped us, I think.
Hopefully that we will expand and, you know, we're still trying to implement a full CRM in this for our company and changing our website. A lot of things are still in the pipeline. It's still not finished. I think once more the whole digital marketing, the marketing stack has been, you know, when it goes online, I think we should be able to have a lot more analytics, and we should be able to really target, be able to even predict footfalls hopefully one day. That is the goal there.
Sir, also you can talk about how we keep at least two activities per park per month.
Yeah, yeah.
In terms of things or experience are developed.
We're changing the experiences in our parks by adding new varieties of F&B. We are also redoing some of our F&B outlets. We are earmarking small amounts for that. Every park we're going to upgrade our F&B outlets and have more F&B points and also do more collaborations and get new kinds of F&B. You know, what is the most trending outside, we should be able to get that in the park. A lot of that kind of activity in terms of improving our non-ticket to ticket ratio also we are doing in addition to the marketing. We are doing a lot, some big events once in a while, which attracts a lot of crowd and the new crowd. For example, we do, you know, rock shows, concerts.
We have done rain dance, we've done Holi, we've done Women's Day. A lot of different things we have been doing to create a buzz in the market. Yes.
The location, if let's say Chennai gets delayed inauguration, what is the other location that you would consider, which you think will be most?
We are looking at a few other locations. Immediately, obviously we look at Odisha. After that, we are looking. Goa is one place that we are keen to do something. Again, we have been invited by the Goa government to do something. We've been invited by the Gujarat government also. These are some of the other places that we are looking at, yes.
Last question. In general or the long run, if you think as a company, what are the internal things that you think as a company you should run? What are the external things in the economy that should happen so that footfalls grow in the long run? Like, last ten years if you have seen our footfalls have not grown. Let's say I just want you to give explanation of your
No, footfalls, until demonetization our footfalls was growing very. If you look at our footfall trend, it was growing at almost 20% CAGR for the first, till 20.
No, no. If you go park-wise, it's. Sorry, Arun, I'm not trying to stop you, but if you go park-wise, Kochi has actually come down a lot for the last 10 years. Bangalore has gone to 1 million, came back. Hyderabad, I do not want to comment because we just opened just 2 years before COVID, so I don't want to comment on Hyderabad. I'm just asking in the long run, what are the things that the company
Yeah, I think 1 million to 1.2 million will be the maximum for our parks. Okay?
Okay.
We cannot do more than that. We hope to get there very quickly. Like I said, we had a couple of issues. One is, I think the economy was not doing well post demonetization. The GST came in and the tax on the ticket went up. Our ticket pricing went up. Two, three different issues and we were late to switch to digital. We should have done the digital switch maybe in 2018 or 2019. We didn't do that. We're doing it now. You know, so it's a lot of some of those, I think all those factors put together has prevented us from, you know, reaching our potential in terms of footfalls. I think I'm seeing some change there and then we will definitely be able to, you know, I think. Cracking a million should not be hard for us. Again, I can't promise you that this year because we don't know what is going to happen.
No, I'm just in general asking all.
Yeah.
Yeah, yeah. In general, I'm asking as a company because.
Yeah.
Yeah, sorry.
Yeah.
Because I think we are not there fully or that. Most of the con call presentations we are seeing was mostly on why we were not able to achieve the potential in terms of the company. I was just trying to understand. We are seeing the company from IPO-
I think we had a marketing issue because I think young people who consume our parks, they have moved, since 2016. Whenever Jio happened, I think since then the huge population has moved completely online. Targeting them with TV or newspaper ads is, you know, it's not really helping. That shift we've done now, which we should have done maybe two to three years back. I think that has helped us a lot and because also it'll help us reduce our costs, a little bit.
Reaching, maintaining 1 million or, let's say, in each park would not be a very, aggressive assumption, right? To model your company.
It's not a very aggressive assumption. I think it's not a very aggressive assumption. We should be able to do that. Yeah.
Yeah. Thanks, everyone. All the best.
Thank you. Thank you.
Thank you. The next question is from the line of Anuj Sharma from M3 Investments. Please go ahead.
Hello.
Yes.
Yeah. Thanks. Am I audible?
Yes, very much.
A few questions. One is, you know, if you look at parks globally, some of the parks can reach a capacity of 3 million. In India, we are not a country with many parks, but the population is, you know, meaningful. Why do you say we are constrained at 1.2? Is it that the capacity to pay is limited, or have we designed parks in such a way that, you know, we cannot-
Yeah, I think our parks are designed for about a million, 1.2 million kind of size. If you want to do 3 million, we obviously have to build a much bigger park.
All right. In terms of interest.
I mean, if these numbers increase to a point where let's say we hit 1.5 million in a year, and we have. You know, that also can happen, right? Sometimes we don't expect footfall and then, for example, last March the same thing happened. We didn't expect that kind of footfall. This suddenly happened. That has happened before also. Initially when we opened our park, it was called Veegaland in Kochi. The capacity was only 500,000.
Yeah. Yeah.
When we realized that in our second year or third year we already almost reached 800,000 or whatever, that's when we expanded the park. We can expand each of our parks depending on the number of people who are coming.
Again, you know.
We can eventually make it a park which can handle 3 million visitors also. That's. We can do that. We have a surplus land, so we can do that.
Yeah. In capacity.
In its current size, each of our parks can handle only about 1-1.2 or max 1.5 million.
Got it. In terms of capacity side, we have excess capacities. We can build up to that. You know, when you evaluate many countries, what is the critical juncture wherein you know this threshold crosses a meaningful. I mean, we still are meaningful, but just suppose 2 million or 3 million. What changes in economies or any trigger points which leads to this?
I think you know people's propensity to spend has to improve you know because if you want to build a park which can attract 2 million visitors it has to be a bigger park. Obviously our CapEx will be higher and people have to be willing to pay that kind of ticket. It's also a question of the people's ability to spend, right? If you compare to the U.S. where people spend about $15-$20 on a movie ticket, how much do they spend here? INR 300, right?
That's not even $5. So that difference will always be there and that doesn't prevent us from making huge parks. This is also the same reason why a company like Disney or Six Flags can't afford to build a park in India because they'll never make the money back, right? We have to, I mean, because India is still a developing country. I think we'll have to be a bit, you know, we have to do it for our crowd.
Yeah. Thanks. Just one more question. See, you talked about the non-ticketing revenues and efforts you are making. In fact, I was meant to ask a question on gaming, entertainment and themes, extending the park time. You know how you know, you've experimented multiple things. How much we can gain from the non-ticketing revenues based on whatever experiments we have done? And what is the traction there?
Our goal is to get to 60/40%. Right now we are 75/25%.
Okay.
25% ticket and 25% non-ticket. Our goal is to get to 60/40. I think we should be able to get there in a few years, two to three years.
All right. Thank you so much, and wish you all the best.
Thank you.
Thank you. The next question is from the line of Gaurav S from Glorytail. Please go ahead.
Thanks for the opportunity. As most of my questions have been asked earlier, I just wanted to congratulate you on the good set of results and the way you have handled.
Thank you.
The business in the entire COVID situation is absolutely amazing. I mean, the negligible cash burns you have done that shows the intent, you know, so congratulations on that. But any plans in Maharashtra to take on Imagicaa or something like that?
Those parks are too big, I mean, in terms of CapEx and, you know, there are other legal issues. There are so many hurdles, you know, and we are not an asset reconstruction company, so we will not be able to take that risk. We have offered to manage the park for them because I think we can unlock a huge amount of value, but we are not going to invest in any such businesses currently. I think that the park has already been sold to somebody else.
Yeah, it's sold to Malpani Group. Whenever you will plan in future, maybe three, four, five years, I just have a suggestion that the Nashik-Mumbai area, in the middle of that, is the good area to go for you.
Yeah. For new
Pune-Mumbai has already been taken, and Nashik-Mumbai has, you know, some wonderful views and things, and most of the people come there, so that's a good place.
Absolutely.
Thank you.
We'll definitely hope to come to Maharashtra sometime soon.
Yeah. Thank you.
Thank you. The next question is from the line of Mithun Aswath from Kivah Advisors. Please go ahead.
My first question was more on if you look at FY 2019 pre-COVID, we had about 25 lakh footfall. Are we in, you know, the run rate currently if we continue? Do you look at reaching those levels in FY 2023? Also wanted to understand what are your average ticket prices now? Have they been increased based on
I think we are.
FY 2023 versus FY 2019.
Hard to predict what the footfall for the year is gonna be because like I said, again, it depends on whether there are further COVID waves and lockdowns and all those kind of things. That will, you know, definitely affect people's propensity to go out to a crowded place. If that doesn't happen, I think we should be able to do better than FY 2019. What was the other part of the question? Sorry, I forgot.
On the ticket price.
Ticket price, I think we are.
Prices.
better than FY 2019. Yeah, I think we are doing. Satheesh can give you some detail on that.
We have come back to pre-COVID levels on the ticket price. We are being very judicious on the ticket pricing. We see how the trends go up, okay. We don't push the ticket envelope too fast. We see the trend and then now as such most of our parks are at pre-COVID level.
Right. Just one other question was, globally we've seen most of these parks which do very well are in a tourist destination. You know, the three parks we have are just in cities. May not be very tourist hubs. Is there any thought of, you know, maybe starting something, say, in Goa, which would, you know-
We are looking at Goa.
attract the tourists as well, so.
Yeah. Of course, we are looking at Goa as one other option.
Okay. Thank you.
Thank you. The next question is from the line of Dhruvesh Sanghvi from Prospero Tree. Please go ahead.
Oh, the question has been answered. Thank you.
Thank you. The next question is from the line of Manoj Dua from Geometric. Please go ahead.
Thank you for taking my question again. Any change in customer behavior post-COVID in terms of spending? Are they spending more on food and beverage now? Are they more ready to take the fast track tickets? Some like that.
Yeah, I think we are seeing a much higher spend compared to pre-COVID, especially Q4 results, you can see that. Also I think more retail shops also, like for example, we are less dependent on groups now post-COVID than we were pre-COVID. Pre-COVID I think we used to depend heavily on, you know, group sales. Now our dependence on group sales for all three parks is, so Hyderabad is an exception. We still get huge groups there.
At the other two parks, dependence on groups has come down, which is a good sign. I think that means that higher spending customers who are coming, paying full price, and then obviously the people who pay full price will intend to spend more inside the park. Like I said earlier, we are doing more F&B and retail options and different thematic offerings that we are doing so which has helped us improve those numbers.
Okay. As you said, 1.2 million is the capacity in which our park is built. If we get more numbers than this, expanding our park is not a difficult option for us.
It's not difficult.
the ROI is good.
We can do it.
Okay.
Okay.
Thank you, and best of luck.
Thank you.
Thank you. The next question is from the line of Binay K from Prudential Investments. Please go ahead. Binay, your line is on the talk mode. Please go ahead.
Hello?
Sir, there's a lot of disturbance from your line.
Hello?
Yes, sir. Please proceed.
Yes.
Yeah. Can you hear me properly now?
Yes.
Yeah. This is a general question. I just wanted to know how do you, since you've witnessed the pandemic and you handled yourselves perfectly well, how do you see the company for the next two to four years from here? If you can, is there a vision something that you have in mind?
I think it's like I said, I mean, if coming out of a pandemic, if you know, if that is truly over and there is no other pandemic or any other big shock that is gonna come to you know, the customers going out, I think we should be able to have two to three years of very good growth. That is why we are also now looking at expanding to other cities. Like I said earlier, we have been invited by many state governments to come and set up the park in their respective states. We are evaluating Goa, then Gujarat. Odisha obviously we are doing soon.
Like that, I mean, there are a lot of opportunities. We are also thinking about, like I said earlier, we are looking at, taking over large projects which maybe other people have invested and maybe converting that into a Wonderla park and on a revenue share or a management basis. We are exploring some of those opportunities. As time goes by, we will firm up our plans on these.
Okay, sir. Thanks for your answer. Thank you.
Thanks.
Thank you. The next question is from the line of Dhruvesh Sanghvi from Prospero Tree. Please go ahead.
Sorry. I had one more thought which I want to discuss. When we see, you know, today's time in terms of overall entertainment, there are so many new forms of entertainment which are coming, including gaming and even the malls, because the theaters are getting challenged due to Netflix. They are also rethinking on how to create further experiences. Considering the kind of time that we have, we still in India do not have a large Saturday/Sunday culture. In that sense, is it not creating a tougher environment for us to really get people? Because travel times are increasing. A couple with a kid wanting to come will have to essentially spend INR 5,000-INR 7,000 and get really tired and be in the sun. I mean, how does all of this thing look to you, and is this a challenge at all?
No, that is not a challenge at all, actually. Because if you look at, you know, the outdoor entertainment where there is active fun, high speeds, thrills, splashing water, these things are never going to go out of style, you know. If you are born in 1990s or 2010 or 2020, 2050, some of these physical activities, I think are going to remain. For example, a mall will always be an indoor activity or, you know, since it's going to be what you can do there is always going to be limited. We are an outdoor activity.
All our parks are in between beautiful landscapes, in nature, on hills, valleys, those kind of places. It's a more outdoor and it's an active outdoor kind of entertainment. That I don't think will go out of style because if you look at all the parks all over the world, they've all been growing from 1800s also. The oldest park in the world in Copenhagen, they are still doing well and they're still growing. I don't think this segment will have that issue. But having said that, of course, the kind of entertainment that we offer could also evolve. Like, for example, now we are doing physical rides. I think in the future there will be a mix of physical plus virtual, and some will be fully virtual. All that can happen, but I think the essence of physical, active, outdoor fun is not going to change.
Fair enough. Fair enough. Like, you cannot replicate a water slide or a roller coaster virtually. The feeling that you get. Right. It's not possible to replicate that. Going with your friends and family. I think in one of the previous conf calls, I think you had used the word, you know, Insta-friendly places and creation of those situations or something like that is what I remember. Yeah. Are you really looking to change? That is the other thing.
Yeah. Yeah. Like for example, like I said, we are an outdoor, we are, you know, our parks are beautiful. If you look at our, you know, hashtag on Instagram, Wonderla will have far more pictures than, for example, a mall or any other amusement park in India. I think Wonderla ranks number one in terms of sheer number of pictures and videos that you see on Instagram. I think we are number one. That itself shows you that people. Also you should remember that people don't go to a Wonderla park every week like you go to a mall. You go to a Wonderla park maybe once a year, twice a year, thrice a year, not more than that, right? Because you always go with friends, family for a special occasion, birthday, anniversary, I don't know, whatever else, right?
Just you're bunking class with your friends and you are going to go with your girlfriend to the park. Those are the kind of outings that we get. Those are not as frequent as going to a mall. I think the chances for us to have drop-in visits is much lower than compared to a mall because a mall will always have a high frequency, right? You go to watch a movie maybe 2x-3 x a year at least. Right. That can come down because of Netflix. Whereas you don't expect that to don't come to a place like Wonderla more than 2x-3 x a year.
Right. That's it. Fair enough. Fair enough.
The second one, you know, when, I mean, again, we have been hearing that you are evaluating certain, you know, takeover opportunities or new places or acquisitions. I mean, you know, if we can just put a little bit more certainty to these, let's say just to understand and guess the timelines, okay, when will we have some outcomes available? Can we? It is difficult to predict. No, I understand. Is it like that, okay, there are 20 opportunities which have already come to you on your table, which you have thought through and discarded, something like that? Is that a correct estimate or some thought around it? We have about three or four. We have about three or four which we are evaluating currently.
Okay.
That's how I would put it. There are other opportunities. For example, we could do a park in every large city in India. I think there are about 100 large cities in India which have more than you know 1 million population. I don't know. That is possible. Technically, it's possible to build in all those cities, but obviously these are large CapEx. There is a lot of local government support required. There is a lot of land acquisition there. There are government approvals there. These kind of tax issues, we might have to sort them out. I don't know. I think every state has different laws. That is also.
That is why this question, you know, because it is such a long gestation thing that, you know, five year back when we started thinking Odisha or Chennai, it is still not even started, you know, into construction. Maybe over time, when we have more power. That is the state of our country, no? What can you do about it? Land acquisition is hard. Getting approvals is hard. Taxation is hard. Everything is hard. We are a large CapEx, right?
We are not like a multiplex where you can rent it and then build it very within three months and start operating. Because a mall is built by somebody else usually, right? We have to build everything from scratch. We are a very large investment also compared to doing a multiplex. There it definitely has its own challenges. That is one of the reasons why you don't see that many amusement parks also, right? Even globally.
Right.
It's not like Disneyland is not building a Disneyland in every country. They will not be able to do it. It's not sustainable.
Right. Fair enough. Thanks. Thanks a lot.
Yeah.
Yeah.
Thank you. The next question is from the line of Rahul from R Consultant. Please go ahead.
Yeah. Hello, am I audible?
Mm-hmm. Yes, yes.
My question is, according to you, which park performed best in last financial year out of the three parks?
I think Bangalore always performs number one, and then I think followed by Hyderabad and followed by Kochi. Right, Satheesh?
Yes, sir. Bangalore is the top park, sir.
Yeah. Bangalore is number one, and then followed by Hyderabad. Yeah.
Okay, sir. Okay, thank you. Sir, my second question. Like, we are getting good traction and things are back to normal, so are we planning to increase ticket price in the coming quarter?
Yes. We have already increased the ticket price three times. We're going to increase one more time, June 1 onwards, because we are seeing huge demand and many days our footfalls are crossing 5,000, 8,000, like that. Because of that, I think we do, we have increased, prices, and we are also even thinking about dynamic pricing, but that will take a little more time because that depends on our IT system to be up and running. It'll take some more time.
Okay, sir. Okay, thank you. That's it from my side.
Thank you. The next question is from the line of TVK Vivek Kumar from Bestpals Research & Advisory. Please go ahead.
Thanks, everyone. There's only one question. What are the locations? You said you are considering some locations in terms of management hire, where you will have a revenue share. What are the locations, or is it too early to say?
It's not. Yeah, it's too early to. I mean, we are just. We've got a lot of. We're not really, we don't.
You think in the next two to three years, one or two will definitely get to the logical conclusion?
We definitely want to get into that market because we feel like that is something that we can do.
So no-
I think the way I
At least you can talk about is it north, west? At least the location. I'm not asking specific details of the project.
It'll be north and west. Yeah.
Okay. Thank you.
Yeah. Thanks.
Thank you. All the best.
Thank you. The next question is on the line of Neha Sharma from Pearl Global Investments. Please go ahead. Neha, your line is in talk mode.
Am I audible?
Yes, please go ahead.
Hello, sir. Good evening. I just have two questions. Can you provide guidance as in, do you have any plans to increase the park capacity in the coming year for the existing parks further?
See, depending on footfalls, we'll definitely keep expanding our parks. We've been doing that for a long time. Compared to inception, our parks have definitely grown in size. Kochi has more than doubled in size. Bangalore also maybe 30% larger. Hyderabad is still. We are still adding rides. We've not reached the full. Still, Hyderabad is still our smallest park, so we will be investing in more rides in Hyderabad as footfalls are growing now, and now Hyderabad has become our second best performing park. So yeah, we'll keep adding attractions and facilities, yes.
Sir, one more. Can you provide some guidance on the expansion strategy stage? Which states are you targeting?
It's hard to say. Like I said, you know, we look at large cities. Typically which are the catchments. We are open to, you know, all types. We can do coastal cities like Kochi. We can do Bangalore. We can even do hot places like Hyderabad. I think it's very versatile that way. We can do it in any kind of climate. Only thing we'll have to, you know, regulate in terms of the weather. We'll have to maybe have more indoor or more outdoor facilities. That is not a criteria for us. Obviously, we look at ease of setting up and whether we've been invited by the government to set it up or not, because that, you know, makes things a lot easier for us.
Okay. That's it from my side. Thank you, sir.
Thank you.
Thank you. The next question is from the line of Gaurav S from Glorytail. Please go ahead.
Hello, sir. I just had one more question. Do you have any in-house ride manufacturing unit, and if yes, I mean, can you throw some light on our ride procurement process? How do you do it?
We've been manufacturing rides since 2000, so 22 years we've manufactured rides. We have made everything from small kiddie rides to water slides to even roller coasters to virtual reality. Everything we've made. We even have about three or four patents to some of our rides. Even our iconic Sky Wheel that is there in our logo also, that also is completely made by us.
That's it. Thank you.
Yeah.
Thank you. The next question is from the line of Surendra Singh Reddy, an individual investor. Please go ahead.
Yes. Just a quick question. Thanks for giving me the opportunity again.
Sure.
What happened to Colombo, given the situation in Sri Lanka? Are you still considering the park operations over there? Are you still on the table?
No, I don't think. We've not heard from them yet. I'm guessing right now it's actually on hold. We had an opportunity to take over a park in Colombo, but I don't know what is the situation now. I, maybe it will get delayed is what I assume.
It's not completely off the table. Is that correct?
It's not off the table. I mean, we are open to looking at it. They've already invested a huge amount of money there.
Yeah.
They've got the best international, you know, design-renowned consultants to come and design that park, and I think a lot of outdoors also have been great. I think the park will get set up at some point, but we don't know when.
Got it. Okay. Good to know. Thank you. That's all for me.
Thank you. The next question is from the line of Harshit Vora from Multi Way. Please go ahead.
Hi, sir. May we decide not to go ahead with Chennai project. What will be the financial implications of backing out from the project?
We just have to sell the property. I don't think that will be a problem for us, and we are not going to lose money as the values have already skyrocketed over there. That is an option. We can liquidate the assets, or we can definitely try to do some kind of other investment or we'll figure it out. I don't think it'll be a lost cause. We are hoping that we should come through. All the signs are telling us, I think the new DMK government is more aggressive now. Hopefully they will also get more investment into their state.
Okay. Thanks, sir. That would be all for me.
Thank you. Ladies and gentlemen, that is the last question. I now hand the conference over to the management for the closing comments.
Thank you all for attending the Q4 FY 2022 conference call. We look forward to, you know, a good Q1. As of now, we are very happy with the response we've got. We hope that we can keep up the momentum, and we have a lot of exciting plans for the coming years. Hope to see you all soon again. Until then, thank you and goodbye.
Thank you. Ladies and gentlemen, on behalf of ICICI Securities, that concludes this conference call. We thank you for joining us. You may now disconnect your lines. Thank you.