Ladies and gentlemen, good day and welcome to the Wonderla Holidays Limited Q1 FY23 Earnings 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 touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Adhidev Chattopadhyay. Thank you, and over to you, sir.
Good evening, everyone. On behalf of ICICI Securities, I'd like to welcome everyone today to the Wonderla Holidays Limited Q1 FY 2023 call. From the management, as always, we have with us Mr. Arun Chittilappilly, the Managing Director, and Mr. Satheesh Seshadri, the Chief Financial Officer. I would like to congratulate the management for a great quarter. I would like to hand over the floor to them for their opening remarks. Over to you.
Thank you. Thank you for that introduction. Good afternoon, everyone, and thank you for joining us. This is Arun, the Managing Director of the company. Let me say that, you know, Q1 is like a milestone quarter for us as we've seen blockbuster results after, like, almost two years of the pandemic. It gives us a lot of confidence that, you know, we're gonna come much stronger after the pandemic. This quarter has also proven that, you know, our customers and generally people in general are willing to go out and experiment with outdoor activities and fun and, you know, so that's a strong business proposition for us. As a result, we have witnessed the highest ever quarterly revenue, EBITDA, PAT since inception.
We have experienced some truly phenomenal footfalls, growing by some 24% compared to FY 2020, our last normal pre-pandemic quarter. Now we are entering a new dawn of value creation and growth ahead of us. The financial highlights. Coming to the financial numbers for this quarter, we registered revenues of INR 152 crore, clocking in a growth of 26% when compared to the INR 121 crore-
Hello, sir. Arun?
Yeah.
Yes, sir. We lost your audio in between.
Our revenues have been at INR 152 crores, clocking a growth of 26% compared to INR 121 crores in Q1 FY 2020. Our EBITDA has grown by 30% to INR 94 crores compared to INR 72 crores for the same period in FY 2020. Our margin is at 62% and PAT for Q1 FY 2023 stood at INR 64 crores, growing by 53% compared to INR 42 crores in Q1 FY 2020. Operating highlights. Demand for leisure activities has resumed with a vengeance, as you all know. Our customers continue to view Wonderla as a great way to spend a day of leisure and providing this through their surging footfalls in each sequential quarter. We also have had an outstanding performance from our resorts division.
We had almost more than 80% occupancy, the highest ever that we've done. We've also seen footfall growth across all the parks. While some portion of these footfalls could be attributed to pent-up demand, a great part has also come from fundamental demand, which continues every year, and supported by compelling events and strategic marketing activation initiatives that we have implemented to drive demand. These measures and our continuous focus on customer centricity has contributed to some of these numbers. We also focused on special events and plans during all quarters in the last two years. Some of these included are DJ events, Rhythm Nights, Summer Fiesta, Holi, those kind of things.
Secondly, we've also offered special Park+ offerings and some of the new rides also we've launched and has attracted leisure seekers. We have implemented a lot of innovative marketing campaigns, mostly digital, to encourage walk-in and group-based footfalls. These initiatives have reached to a large number of customers and built a strong demand for us, and with very less marketing costs. Backed by all these efforts, we have collected footfall of roughly about 11.18 lakhs in Q1 compared to 8.99 lakhs in Q1 FY 2020. These strong numbers have crossed all pre-COVID markers for footfalls, and I'm happy to say that we are moving in the right direction. We have two new projects, as you may know.
I'm pleased to inform that we have signed an MoU with Odisha government for development of an amusement park in the state capital city of Bhubaneswar. For this development, we have leased 50.6 acres of land for 90 years in the Kumarbasta village within Khordha district of Bhubaneswar. We are planning to develop this project with an investment of less than INR 125 crore, and this will be done through internal accruals. This should ultimately expand our top line and bottom line. The other project that we have is Chennai, and that has been put on hold for now. I mean, it's not on hold, it's just that we are waiting for the government to revert on our request for waiving LBT tax for our project.
We are reasonably sure that this will happen, but we don't know the timelines. It could happen in this quarter. Yeah, so that's pretty much it. Thank you all for your continued support. Look forward to seeing you at our parks, and we'll go to the question and answer session.
Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone 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. Thank you. We take the first question from the line of Vivek Kumar from Bestoic Research. Please go ahead, sir.
Thank you. Good evening, Arun. Great to see your superb numbers. First question is, this Chennai thing, if at all we get the permission, how many years will it take and how do you finance? The second one is, can you repeat this kind of numbers this year, or how much of it is revenue and how much of it is attributable to your marketing and increased, whatever sales efforts that you are doing at your end? I know you can't predict next year, but assuming that no COVID and all these things are out of the way in terms of, outdoor thing, are you sure that we can grow these numbers even by small amounts in terms of footfalls with our marketing efforts? Thank you. Thank you.
Yeah, I think we can grow this business quite a bit. Like I've always said that we expect at least 1 million per park per year, and so we've not reached that number yet. Yeah. I think there is definitely a room for all of our parks to grow. If you see our footfall numbers, the growth, Cochin and Hyderabad have shown almost 38% or 39% growth in footfalls.
Whereas Bangalore has shown, I think, a 12% or 15%, I'm not sure of the exact number. But this shows that, you know, we've not still not reached that 1 million mark per park. I think there's definitely a lot of room. Chennai project, if we get all the approvals done, I think we should be able to start next year. We will do most of the work with our internal approvals, and we might take some debt on.
Sorry to ask the same question or comment on your marketing approach. Is there anything else that you are thinking in terms of what you can do to increase your footfalls and such? Because that was a problem for the last decade, if you saw footfalls across our parks.
No, I think our parks are running full pretty much our Q1. I don't think we could have had more footfalls than this. You know, it's very, we were running pretty much full throughout, especially May, we were completely sold out. Maybe in June we can have a little more footfalls in the following year. I think, growing on top of this footfall for next year, I don't know how much we can grow, but we'll see. We will have to look at maybe price hikes, which already planning to do and. I think, yeah, for our existing parks, I think we are in a very good place.
Okay. Thanks and all the best.
Thank you.
Thank you, sir. We take the next question from the line of Mr. Aditya Shah from Vikram Advisory Services. Please go ahead, sir.
Congratulations, Arun, on the good set of numbers. My questions are regarding two, three things, which is what is the expected free cash flow that we plan to generate for the next this year or probably coming two, three years? Second is regarding, let's say if you're not raising any capital for the Chennai project or the Odisha project. Do we have any plans for raising any capital in the next two, three years? Because, you know, our outlay would be around INR 400 crore, that's what I think. The third point is that, you know, the last ROE of 15% we touched probably in 2015 or 2016.
Do you think that going forward, we would be able to, you know, maintain an ROE between 15% and 18% in the future? Or, you know, once it touches 15, 18, and then we go down again because of the CapEx and then we go up again or when do you think
We don't look at ROE in that sense, because this is a very high CapEx heavy investment. You know, we don't have a benchmark number like this. I think we are happy with you know anything more than 12%. I think Satish can give more on the numbers.
I will take one by one, sir.
Mm-hmm.
First one is on the cash generation. See, in a year we generate about INR 100 crores cash, okay, on the surplus on the EBITDA side. For the investments in Kochi, for the investments in Bhubaneswar and Chennai park.
Okay. We will be requiring a total investment of INR 125 crores for Odisha, and about INR 220 crores for Chennai, if we have to go ahead with the.
Over a 2.5-year period.
Over a two-year period. In that two years we will generate about INR 200 crore. We have a cash surplus now in form of investment and cash, about INR 200 crore. We will try to do as much as possible with internal accruals on the investment front. This is number two. Number three is, see the ROI is actually going to be difficult for you to gauge because the shift happened because the Hyderabad park came into effect.
Yeah.
Now if the Chennai and Odisha park is going to come.
Yes.
Again, the ROI is going to reduce, because first three to four years, it takes at least four years to pick up the business. Okay.
Mm-hmm.
This is where it is, number one. Number two, we are also having when we did the Ind AS migration , we also have, you know, land valuation of about INR 300 crores-INR 400 crores. INR 385 crores we had a valuation. These are, this will hit on the return, okay? My return is going to keep on, while we are going to add the parks, the returns are going to fluctuate.
Broadly speaking then, you know, what is our intention of adding parks on an annual or biannual basis? Because just to have an idea, currently we have two in plan, that's what we know. Considering the capital outlay being around INR 300 crores per park going forward, if at all we plan any new one, let's say if we don't have a government lease as in Odisha. My question is just regarding this because it's not, you know, clear that, you know, what is the ROE that we would want to make, but on a continuous basis. Because as investors, you know, that is something that anybody would be looking at very closely.
See, we are in. It's hard for us to predict an ROE number. All we can say is. What is your expectation as in? What you want to do with? As you said, 12% and above. That's what you said.
Yeah. I think something along that, those lines is what we hope to do, but anything more than that, we are obviously clinging to the.
Yeah. ROI is again, it's not a static number, okay?
Mm-hmm.
With the business, we talk about the business, we see the potential in business is there, okay? When you go by the potential in business, okay, when the top line goes, automatically your ROI is going to go up.
Exactly.
That's why we are going for CapEx and new parks. See, we have to grow our top line in two aspects. One is leveraging or shifting the assets of the existing park.
Mm-hmm.
Number two is where, as Arun has said correctly, we will try to achieve 1 million footfall, which we were doing before. With three parks we will try to record 30 lakhs footfall. Okay? That is point number one on the existing asset. With the new asset coming in, my top line is going to grow. Our first approach will be how you will reinvest and improve the top line, okay?
Mm-hmm.
Automatically ROE or EBITDA is only a consequence of what you're going to do. It is not a rigid factor. We are seeing a potential in this business, and we see there is abundant opportunity in the north of India, so we will be grow slowly moving into newer parks. That's the one way of improving your top lines.
No, definitely there's ample opportunity. There's absolutely no doubt. You're in a big business.
When you're in expansion stage, you don't talk much on the ROE now. Yeah. It is only consequent approach.
All right. Okay. Got it. Thank you. I'll come back again if I have more.
Thank you, sir. We take the next question from the line of Gaurav Gandhi from Glorytale Capital Management. Please go ahead.
Hi, sir. Congratulations on the excellent set of numbers. My first question is, sir, do you allow any movie shooting or marriages to happen in the park, or do you have any kind of facility or planning to develop any?
Yeah, we do. We have a lot of movies which are shot in our parks and weddings. Especially in our resort, not in the park as such, but weddings are usually happen in the resort. It's not a very big market for us, the wedding market, but we do get a lot of, especially nowadays people want you know dramatic scenery for photos and yeah. Because of that, we do get a lot.
All right. That's it from my side. Thank you.
Thank you, sir. We take the next question from the line of Darshit Jhaveri from Crown Capital . Please go ahead.
Hello, am I audible?
Yeah.
Yeah. First of all, congratulations on a great set of numbers.
Thanks.
I just wanted to know what our long-term, maybe two, three years plan is. Like this number of INR 150 crore nearly is, as you said, we want more footfalls. Over the period of time, how much would this be sustainable or what would be our year-end target or maybe FY 2025 target? Could that be elaborated a bit? Could you give some guidance on that front?
It's hard to give guidance because we'll have new parks by FY 25, at least one new park, maybe even two. Based on that, I think we'll have to look at numbers and Satish might be able to share something like a rough calculation with you.
Yeah.
I don't think.
Our short-term objective as Arun had already suggested, it's actually broken into two parts. One is the existing parks, which is Bangalore, Hyderabad and Kochi, where we will try to achieve 1 million footfall. Okay? Now we are at around 25 lakhs, that is 2.5 million. Our aim is to go to 3 million footfall to these three parks at a minimum level. Okay? This is number one. Number two, expansions. When the expansion happen in Chennai and Odisha, it will add up. For the first few years, it could add up 1 million more of a footfall. We are talking about 3-4 million footfall in 2025. Okay, sir. I'm assuming, sir, with our increased capacity, we'll also be planning to raise prices.
The next year in quarter one, you should be better by this number.
Yeah. Our prices will go up. Yes, for sure. See, we have pricing. This year we have not gone up. It's gone up only about 2-3% compared to FY 2020. There is headroom for us to grow pricing, so which we'll be doing. Okay. Normally the top line increases on account of both volume and price. I think we agree with that. Now our focus, coming out of two years of COVID, our immediate focus was how to improve the footfall and improve the demand. We were focusing on that. Now that we have achieved the first step, we will be looking at the pricing. Pricing we have been doing judiciously.
If you have seen the pricing for last one year and 1.5 years, if you have followed our pricing, we have slowly improved the pricing and brought it just above the pre-COVID level. Okay? Now we have to work on the inflation part of it. Yeah.
Okay. I get that. Can I ask one more question, sir?
Yeah, sure.
Yeah. Could you just explain a bit briefly how does our project economics work? Like, it takes around two years to build and then three to four years to break even payback period. Could just be some kind of small guide explanation on how does a project work?
Yeah. Our new project is. Yeah, sorry. You didn't tell. I will tell, sir. I will answer this. See, let's take example of Hyderabad park. Okay?
In the second year of operations, we have registered EBITDA positive. Okay? Our immediate focus will be how we can achieve EBITDA positive in the immediate years, that is second year or so, and then take up the revenue at the top, at the higher levels. Okay? That's how we work on. If you see number one. Number two, we have to be appreciative of the fact that if I have to do a park now and do five years down the line, it's going to cost me at least two or three times the cost. Okay? We are missing out that. Okay? If I develop the park in Hyderabad at around INR 250 crores, the same park for me to develop is now INR 350 crores-INR 400 crores.
I think there is an inherent cost, project cost which is going to go up. Ideally, the growth has to be from the existing park and the newer projects which we are going to develop. The unit economics is get the EBITDA positive in the second year. Okay. Thank you so much, sir. That answered all my questions. Thank you so much. All the best, sir. Thank you.
Thank you. A reminder to all the participants, anyone who wishes to ask a question may press star then one on their telephone. We take the next question from the line of Mr. Yash Shah . Please go ahead, sir.
Thank you for the opportunity. [Inaudible] Thank you. [Inaudible]
I'm sorry to interrupt, [Inaudible]
Why is there a disturbance?
One second.
Yeah, just it's clear, I guess. Thank you, sir.
Hello, Mr. Shah.
Yes, please. Shall I go ahead?
Yeah.
Okay. Thank you. Arun , [Inaudible] is looking at being an operator of some of the ailing parks of India. Is that a model you'd like to explore, given your expertise of operations and having an in-house team? Some kind of a revenue share model or an asset light strategy in future?
Yeah, we are exploring that. Yeah. We've not, I mean, something that we are definitely exploring. We've had requests from other parks to do this, but we haven't found the right fit yet. Whenever we find it, we will definitely look at that also.
Okay. My second question was, any other vectors of growth that Wonderla is exploring? I understand during COVID, I think you did try a bit on the food delivery or food, something on the food space, but I think that was rolled back. But anything in the online gaming space or maybe increasing the resort offering? Given the three largest parks that you have, you have enough space left over there, so any thoughts over there?
This year we're going to do some experiments on our resort project. You know, we're going to expand our existing resort in Bangalore in a few different directions, you know, in terms of adding more things to do for people, adding more, you know, thrill and adventure element to the whole resort, and probably retheming and redoing some of our F&B. Those kind of things we are going to do this year.
Based on how that does, and how it improves our occupancy and revenues of the resort in Bangalore, then we'll take a call on doing a similar or maybe a larger one in Hyderabad, and we can do a similar one in, you know, in Cochin. We can do one in Chennai. We can do one in Bhubaneswar. So that's obviously something that we can also look at, yes.
All right. Thank you.
The resort, we are looking at that one vector. We are definitely looking at digital and online you know offerings for like how can we make Wonderla relevant in the digital space in terms of whether it's gaming or virtual reality and augmented reality, which are I mean something that we've already worked on and released in some fashion in our park, right? We are obviously looking out to see how else we can use it and how you know how it can augment our revenues.
Okay. Thank you for that. Just one last question. Any update on the Goa skate project?
This year we have not really looked at, I mean, we're just concentrating on Chennai and Odisha, but we are also talking to a few other state governments. You know, we are definitely we want to build a pipeline of projects that we can, you know, slowly go out and execute. I mean, we are definitely talking to Goa. We're talking to Gujarat. We're talking to a bunch of different states and, whenever there is some announcement, we'll definitely, you know, keep you posted.
Thank you. Thank you so much for answering these questions, and wishing you all the best for the coming quarters.
Thank you.
Thank you, sir. We take the next question from the line of Mr. Rahul Jain from [Inaudible] . Please go ahead, sir.
Yeah. Congratulations, sir, for good set of numbers. My first question is, when you say Chennai and Odisha Park coming in, how much revenue you are expecting from these parks? Follow-up question to this, what do you think about the spike in demand? Is this a pent-up demand, or do you expect similar growth in future?
You know, the park in Odisha, we are doing a lighter version. You know, we are gonna spend between 100 and 120 crores there. Our ticket price also will be probably about 60% of what we charge in our larger parks. Maybe about INR 600-INR 700. That's the way that pricing will work. If we get roughly half a million visitors in our first year, you can do the math on what is the revenue potential. Then that will keep growing, and we should get to again about maybe 800,000, 8 lakh to about 10 lakh visitors there also. 8 lakh is what I think is more realistic in a place like Bhubaneswar.
That is what we are gunning for. These are rough calculations. Chennai will be a bigger park like our existing park in Bangalore and so you can do the math from there. What else? That was it, right? That was your question, right?
Yes. Yes. Sir, my second question is like, as we all can see, inflation is coming in, everyone is comparing things with inflation. So do you feel like it's gonna impact our business also?
Not really. If you think about it, we've actually increased the price of our F&B and tickets quite a bit in this year itself. We're going to take further price increases and because we don't have a direct comparable for our offering, I think pricing has always been one of our strong points. We can, you know, increase our prices and not worry about declining footfall. We are definitely looking at further price hikes.
Okay. Thank you. Sir, my very last question. What is our current overall capacity utilization in different parks, and what is our current capacity utilization?
It's hard to predict that right now because our capacity is theoretical capacity and what we can actually keep is. Theoretically, we can have 10,000 visitors per day per park. We are probably at about 5,000 or 6,000. What is our Q1 average, Satheesh Seshadri?
Sir, in a year we do about 35.
Not Q1. No, no. I'm saying this Q1, what is the average?
The Q1 average will be more than about 4,000 people. 4,000 plus.
Yeah. We can still add more people if we want.
Okay. Okay. Got it, sir. Thank you so much.
4,000. Yeah.
Thank you, sir. A reminder to all the participants, anyone who wishes to ask a question may press star and one on their phone at this time. We take the next question from the line of Mr. Vivek Kumar from Bestoic Research. Please go ahead, sir.
Arun, During the COVID, you've just mentioned that we are working on how to create a brand awareness even when visitors outside in their life, like, not when they're not in the park. Are we doing anything to do in those terms? Like, you said or just when you... I don't exactly remember who said it, but during the COVID, you mentioned that we are thinking very deeply on these things. Recently-
No, we did that. Actually, we did that and we've been very successful in that. That's why we got this kind of footfalls, right? I think the way we do our marketing is completely different now. I can't give you too much detail. It's all I can tell you is we do mostly digital marketing, and we do very precise targeting of people who are even thinking about going out somewhere, and we are able to target them very accurately and give ads and offers. That's how our marketing is working now. That's definitely. If people are thinking about an outing, we should be in their consideration. We do a lot of things for that here.
Okay. Thank you. Thank you and all the best, sir.
Thank you. We take the next question from the line of Meet Jagnani from PS Associates. Please go ahead. Mr. Meet, your line is in talk mode, sir. You may please go ahead.
Hi, Arun. Thanks for the opportunity, and congratulations for very good set of numbers. My first question is, if this Chennai project does not materialize in, say, Q1 or Q2 , so are we looking at any other second option, or we will go ahead only with Odisha for next two years?
We are definitely looking at other options also. Like I mentioned, we are always looking out for new projects. If Chennai doesn't work out, we look at something else, I think. There are always at least two, three projects in our pipeline. We want to keep it like that, and we are trying to grow that pipeline now. I think there are a lot more opportunities and, a lot of states are looking at investment in the tourism sector. We are talking to a lot of state governments to see whether we can tie up and, do, new projects. That also reduces our CapEx also.
Okay. The second question is regarding price hike. Are we looking at a price hike across all the parks or is it at any given one park?
Can't tell you. I mean, definitely we are looking at price hikes across the board at some point in the second half of this year. Maybe not this quarter, but next quarter definitely we'll do more price hikes.
Okay. Thank you very much. Again, congratulations on that set of numbers.
Thank you.
Thank you, sir. We take the next question from the line of Abhishri Shah , individual investor. Please go ahead.
Hello. Hello, am I audible?
Yes.
Yeah. Hello. Good evening, sir, and congratulations on the good set of numbers. I have a couple of questions.
Thank you.
Can you put some light on the park-wide performance? I see you are frequently adding rides in the parks. What is your plan ahead on that?
We always keep adding rides to the park. That's something that we've been doing for a very long time. Every year we roughly spend about 10% of our top line on adding attractions to our you know, our parks. That is definitely one thing. If you look at our footfalls, I think highest growth in footfall happened in this quarter for Hyderabad. I think almost 36% growth in footfall. I think 34.2% growth in Cochin. What is the percentage growth in Bangalore? 7%, no?
I will tell, sir. Hyderabad, we got 39% growth in footfall. Yes, 46% growth in revenue. In Kochi, we got 38% growth in footfall and 34% growth in revenue. In Bangalore it was 7% growth in footfall and 12% growth in revenue. All the three-
Bangalore is already running, yeah. It is already running almost to very full, even before COVID. There is a lot of headroom for us to grow in the other two parks, and that is happening. That's what you're seeing.
Okay. How frequently you keep adding, as in on quarterly, monthly basis or yearly?
Every year we'll add something, yeah.
Okay. One more. In last quarter you had mentioned a satellite model for the new park. So how much pricing we will be keeping for that park?
It'll be about 50% of our full size park pricing.
Okay. Thank you. That's it from my side. Thank you, sir.
Thank you. We take the next question from the line of Mr. Anil Jain from Equitas Capital . Please go ahead.
Thanks for the opportunity and congratulations for a great set of numbers. I wanted to know if you throw some light on seasonality of our business.
Sorry, I can't hear you properly.
Yeah. I just wanted to know seasonality in our business in terms of, divided into Q1, Q2, Q3, Q4 in terms of footfall and revenue.
Yes. Q1 and Q3 are stronger quarters. Q2 and Q4 tend to be slightly weaker, but that's changing now with our digital marketing, I think. Of course, Q2 will be weaker because of the rains and, you know, opening of schools and colleges. That has an impact on footfall. Roughly that's how it works.
Roughly, can you give some out of 100, suppose 100 is the footfall in a year, Q1, second. Can we be allocating into Q1, Q2, Q3, Q4 ? Which you-
[Crosstalk]
I'm sorry to interrupt, [Crosstalk]
We are losing your audio, Mr. Anil.
[Inaudible]
Mr. Jain, could you mute yourself, please?
Yeah, it's audible now?
Yeah, it's better. Please go ahead.
Suppose there is footfall of 100 numbers in a year. Can you from your past experience how much is in Q1, Q2, Q3, and Q4 ? Just an approximate-
Hello, Satish? Hello, sir. Yes, yes. The Q1 is the main quarter for us, and we record about 40% of our revenue during Q1 . Okay?
Okay.
Which is about 10 lakh footfall is what, 9-10 lakh footfall we achieve during quarter one.
Okay.
This year we have achieved little more than that. Q2 and Q4 together is about another 30%, and Q3 is about 30%.
Q3
Because seasonal. Q3, if you take, it's again a seasonal. Q1 and Q3 will be good numbers, and Q2 and Q4 will be slightly moderated.
Okay. Means two quarters combined, first and third, approximately 70%.
Yeah, roughly about 65%-70%, yes.
Okay. Got it. Thank you. In your Kochi park, your footfall is higher than pre-COVID level, but your revenue has not increasing in tandem with that. What's the reason?
Can't hear you.
Hello.
There's something wrong with your phone.
Hello. Is it audible now?
Not very clear.
Hello now? Hello.
Sir, are you connecting from your head-
Hello. Is it audible now?
No, we can't hear you properly.
Sir, I would request you to switch to your handset, sir.
Hello. Is it audible now?
Yeah, it's better. Please go ahead.
Yeah, yeah.
In your Kochi park, from pre-COVID level, footfall has increased 38%, but your revenue has increased by 34%. Can you throw some light on that?
Sir.
Group footfalls. Yeah, there's some group footfalls in that's why.
Yes. See, the revenue or the ARPU is a factor of the guest mix between retail and group footfall.
Okay.
If you take the Kochi park per se.
Okay
We had the breakdown 19% to 81% in Q1 FY 2020, and now the footfall was 47% and about 50-50 in group and walk-in.
Okay.
That has reduced the revenue to an extent.
Okay. Got it. Thank you. Thank you there very much. Yeah.
Thank you, sir. A reminder to all the participants, if you wish to ask a question, you may press star and one on your touch-tone phone. We take the next question from the line of Sagar from Sunshine Capital. Please go ahead, sir.
Sir, can you share the details of tickets to non-tickets ARPU?
If you take ARPU, it has two components, which is ATP, which is average ticket price, at INR 987, and FPH, which is a combination of F&B and retail, at about INR 313. Both put together, we have recorded INR 1,300.
Okay. Sir, you earlier mentioned like you have switched from traditional to digital marketing. Can you share like how much marketing expenditure we have every quarter against the revenue?
Our percentage.
Okay.
-of revenue to marketing expense is about 8% normally. 8%-9% is our ratio.
Sir, last is like how soon we can see the Chennai park coming in and the taxation matter that can be resolved like?
Hopefully within the next one quarter.
Okay. Okay, sir. Thank you.
Thank you very much. We take the next question from the line of Gaurav Gandhi from Glorytale Capital Management. Please go ahead, sir.
Arun sir, can you share your understanding regarding how many times the same person visits the park? If he visits once, then whether he comes back or what is the time period?
Usually we get a maximum of two visits per year is usually what we get. There are heavy users who come 10, 15 times a year, but that's a very small number. Most of the people maybe once or twice a year.
Okay. All right. Yes. Thank you.
Thank you very much. We take the next question from the line of Mr. Sachin from Swan Investments . Please go ahead, sir.
Yeah. Hello, sir. Good afternoon. Congrats for a very good set of numbers. two, three questions. One, in your presentation you mentioned that you have a lot of surplus land in existing park itself. Are you looking at adding any more capacity or any more rides, at the existing parks and what type of capacity you are looking there?
Yeah. We are constantly going to add newer attractions. We are planning some attractions to be added in Hyderabad. Right now that is our smallest park and newest park, so that needs some addition of rides because now we are getting huge crowds there also. Some expansion will be happening, some F&B expansion will be happening. Bangalore is going to see some expansion, so will Kochi. All three parks this year we'll see a lot of expansion and reposition.
Will it be minor CapEx or is it like INR 15-20 crores, sir, all three put together?
Yeah. It'll be in that range only. We're not going to spend too much, yeah.
Sure. Secondly, I think currently your ratio of ticket to non-ticket is like 75-25 ballpark. What is the ratio like globally, and is there a scope to improve this ratio substantially in favor of non-ticket?
Yes, of course. Global ratio is 60/40, and we are at 75/25, so we should be able to get there soon. That's part of the expansion that we are doing in our F&B also. We want to change our F&B offerings to more value-added offerings, again, aided by our digital transformation, so we understand what kind of people are buying what kind of food. That intelligence, you know, we need to do some work on that. Hopefully within the next year that system will also be up and we should be able to You know, at least give more varied offerings in F&B and merchandise. A lot of expansion is happening in that area, yes.
Do you think over the medium to long term, we can also expect a bit of global benchmark or because of the demographic?
These are developed country metrics we will not be able to achieve. I think, you know, like, it's, I think, the sign of a developed country, when you have people spending as much as on food as they are spending on ticket. That happens, I think, in Western. You know, it is. Maybe in India it will take some more time, but I think eventually, yes, we will also get there. Not in the short term.
Over three to five years then?
three to five years we would want to increase it to, like, say 70/30. 60/40, I think it'll take probably a little more time.
Sure. You also mentioned that, you know, typically, at good times each of your parks gets to 1 million visitors every year. But you also mentioned that the capacity is much larger, like 10,000, and we know there are season variations. But in general, what do you think we need to do so that, you know, we can improve from this 1 million a year over two, three years to, say, like 1.4, 1.5 million per park?
I think, yeah, that means we'll have to utilize our capacity much more smartly, like how airlines used to do that, right? They will oversell some capacity or they will do some dynamic pricing. There's a lot of tech element that will come in if you want to do that and to improve your capacity. They are also planning to do things like that, so that we are more efficient with our ticketing.
Basically we can call it as revenue management or yield management. Do we have a-
Uh-huh.
We are investing significantly in terms of some software or are we boosting the, you know, digital marketing?
Yeah.
Can you give us some more insights what we are trying to do on that front?
You know, we are developing our own software for that. Our ticketing software that will be completely bespoke because nobody else has that kind of software, so we have to develop it pretty much in-house. Of course it will have elements of CRM and Salesforce automation, those kind of things. We are building that entire stack, but it'll take us about a year to finish it. Hopefully we can also look at dynamic pricing for our ticketing also once that is up.
Sure. Just one last question, sir. You know, we heard that in Goa there's a new international airport coming in, and the government wants to develop that more as an entertainment hub. Are we looking at any options near the new international airport in Goa in terms of opening a new park or exploring any opportunity there?
We are talking to the Goa government. We might be doing something there. Right now it's just in discussion.
Sure. Thank you.
Thank you, sir. We take the next question from the line of Mr. Anuj Sharma from Emkay Global Financial Services. Please go ahead.
Yeah, thank you for this opportunity. Arun, you did say that, you know, the Chennai outcome should be out within the quarter or so. The probability of us getting it or not, it's a zero or one scenario, or there could be a scenario wherein, you know, lower EBITDA is considered and we'll be fine with it?
I think it should get done, most likely. I would say with 80% confidence that it should get done. You don't know. Nothing is certain 100%. That's the way we are looking at it. We are reasonably sure that it will go through.
Okay. At the terms which we have always intended for, correct?
Yes.
All right. This is based on your assessment as to how things are moving in the bureaucracy, correct?
Yeah.
All right. Thank you so much.
Thanks.
Thank you, sir. We take the next follow-up question from the line of Mr. Nitin Padmanabhan, PS Associates. Please go ahead.
Yeah, Arun, just wanted to get an idea on your expense side. Could we maintain the current run rate of expenses or could we see any increase in expense deducting depreciation which will increase with new CapEx?
See, when we do new CapEx obviously expenditure will be different. On a steady state, I think, for our existing parks our expenditure I think should be under control.
Okay. Thank you.
Thank you, sir. We take the next question from the line of Neha Sharma from Pearl Global Investments. Please go ahead.
Hello. Good evening, sir, and congratulations on the good set of numbers. I just have one question. Can you give some guidance on the footfall and the revenues for the coming quarter? That's all, sir.
I don't think we can give revenues. I think all we can say is we should do better than FY 20. Leave it at that. I think but of course we'll probably do a little better than that also. I think we are definitely hoping to beat FY 20 numbers by a considerable margin this year. That's what we're hoping to do.
Okay. Okay. That's it then. Thank you.
Thank you very much. Ladies and gentlemen, that was the last question for the day. I now hand the conference over to the management for closing comments. Thank you and over to you, sir.
Thank you all for attending our, you know, earnings call for Q1. Looking forward to, you know, more exciting news and updates from us with the holidays. Thank you all for joining. Thank you.
Thank you. On behalf of ICICI Securities, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.