Release Date: February 09, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Revenue from operations for the quarter stood at INR 123.6 crores, representing a 9.2% growth over last year's quarter.
- Footfall for the quarter increased by 3% Y-o-Y, reflecting effective marketing efforts.
- ARPU for the quarter increased by 6% Y-o-Y, driven by healthy growth in non-ticket revenue.
- Successfully launched new rides in Hyderabad, which were well received by visitors.
- Expansion plans on track with new parks in Orissa and Chennai, and an MOU signed with the Gujarat government.
Negative Points
- EBITDA for the quarter marginally degrew by 1% Y-o-Y.
- Profit after tax for the quarter decreased by 4%, with PAT margin standing at 28.8%.
- Footfall in Kochi declined due to a COVID scare and other adverse events.
- Higher operational expenses due to increased salary costs and additional marketing activities.
- New parks will initially lower margins as they come into play and require additional staffing and marketing.
Q & A Highlights
Q: My first question is related to your comments on the Bhubaneswar Park. You're guiding it will open in Q1, 3 months earlier. Can you just tell us, will it be in the first half of Q1 or will it be in the second half? Will we utilize the full Q1? That's my first. And the follow-up for that is, can you give us the timeline for the Chennai Park as well? How is the progress going on?
A: We are hoping to open Bhubaneswar Park in the latter half of May. So we will definitely not get most of Q1. We expect to get all of June and maybe a little bit of May. Towards the end of May is when we are planning to open it. Regarding Chennai, we hope to open the park in the second or third quarter of FY '26. (Arun Chittilappilly, Managing Director)
Q: What is the overall CapEx that we have spent on the upcoming 2 parks? And how much is still pending?
A: For the Bhubaneswar Park, we are planning to spend about INR 189 crores. We have already spent about INR 140 crores. For the Chennai Park, we have procured land and other initial expenses, totaling around INR 80 crores. (Arun Chittilappilly, Managing Director)
Q: Can you talk about your pricing and marketing strategy for the Odisha Park?
A: We are looking at an ARPU of roughly INR 1,000. We will be spending significantly on marketing to ensure proper reception. The Government of Odisha has been very supportive, and we expect synergies with Odisha Tourism. (Arun Chittilappilly, Managing Director)
Q: What's driving the divergence in footfalls between Bangalore and Kochi?
A: Bangalore is trending as expected in terms of footfall growth. Kochi experienced a decline due to a COVID scare in Kerala towards the end of December. We expect footfall growth of 3% to 5% annually in mature parks like Bangalore and Kochi. (Arun Chittilappilly, Managing Director)
Q: What's behind the muted growth in ticketing revenue and the strong growth in non-ticketing revenue?
A: The ATP growth was 6%, with a higher contribution from group footfall. Non-ticket revenue has improved due to our focus on it, now comprising almost 35% of our revenue compared to 25%-26% last year. (Arun Chittilappilly, Managing Director)
Q: Can you explain the reason for substantially higher OpEx during this quarter?
A: The variance in expenses is mainly due to a 20% hike in employee costs and additional advertisement and sales promotion activities during the festive season. We also performed certain events, contributing to the increased expenses. (Saji Louiz, Chief Financial Officer)
Q: Are the events organized at the parks contributing to overall profitability?
A: Yes, the events contribute to footfall growth. The increased marketing efforts, including events, advertisements, and commissions to agents, have led to higher footfall and associated costs. (Arun Chittilappilly, Managing Director)
Q: What is your expansion strategy, and will it be asset-light?
A: Our expansion will be a mix of asset-light and asset-heavy, depending on the geography and land availability. Some state governments are proactive in providing land, while in other places, we may need to invest in land. (Arun Chittilappilly, Managing Director)
Q: What are your target footfalls and ARPU for FY '25 considering the Bhubaneswar park coming in early?
A: For existing parks, we expect about 5% growth. For the Bhubaneswar park, we anticipate around 5 to 6 lakhs footfalls annually. (Arun Chittilappilly, Managing Director)
Q: How are you planning to fund your expansion?
A: We will evaluate both debt and equity options. Currently, our cash flows should manage the ongoing projects. For future projects, we may consider taking on some debt and potentially equity dilution, but not within the next year. (Saji Louiz, Chief Financial Officer)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
