00:00 Hello and welcome to BK Prima. Very good afternoon to all the viewers. I'm Ira Tajian. One stock
00:07 that we have been looking at pretty closely now is a Wanderla Holidays and this is on
00:12 the back of the approvals that they have received for the new amusement park in Amal Nadu. Joining
00:17 us on the show to discuss more is Arun Chitilapalli, Managing Director at Wanderla Holidays. Arun,
00:23 good afternoon and welcome to the show and congratulations on the approval.
00:27 Thank you so much for having me on the show. Pleasure to be here.
00:32 Always a pleasure to speak to you. Arun, if you could help us understand at what stage
00:38 are we now that the government approvals have come in in Tamil Nadu and what's going to
00:42 be the plan ahead?
00:43 Yeah, so all the approvals for us to start construction in Tamil Nadu has already been
00:50 approved. I mean, we've obtained it. So we've already actually started work on it as of
00:55 Wednesday. We broke ground and all the construction is starting in full swing. We hope to finish
01:02 it in about a couple of, you know, within two years. So the internal goal for us is
01:08 to be able to open it by July 25. So that's the goal that we set ourselves.
01:15 Right. And what's the kind of investments that you're looking at with regards to this
01:21 project and when do you see it breaking even?
01:28 So this is a large amusement park project. In fact, it will be one of our biggest projects.
01:31 So we are looking at between 400 to 450 crore kind of investment, a little less than 500
01:38 crore is the number that we have in mind. And we are expecting to hit about a million
01:44 plus footfalls every year in this park within the first two to three years. So if that happens,
01:50 we will break even definitely in our first year itself. Even if we don't hit a million
01:54 visitors, we will be comfortably a bit positive. That's the hope. At a park level, we will
02:03 be profitable from the third or fourth year.
02:08 Okay. And overall, you know, when you talk about the other one where construction is
02:14 on with the new Odisha Park as well, how is that progressing?
02:19 That's going very fast for us. And we actually started the last March, the construction.
02:25 So we are well halfway into it. We hope to be ready by, you know, next year, June of
02:31 the next year is the plan to open this park. Another, yeah, eight to 10 months, we should
02:37 be ready to open.
02:40 Okay. And again, taking these into consideration, what's the kind of revenue addition you're
02:46 expecting? Because clearly so far, if you see till the first quarter, you're doing almost
02:51 about 150 to 200 crores on a quarterly basis. How does it pan going ahead?
02:58 See, for us, a large park should contribute between 80 to 120 crores. You know, first
03:06 year we are expecting between 75 to 80 crores kind of revenue. The small park, we will be
03:13 expecting maybe 40 to 50 crore kind of revenue. So that's the pretty much, I mean, the estimation
03:21 that we've done for this. And now we'll have to wait and see how it really pans out. But,
03:26 you know, based on our calculations, based on past experience of our parks, this is how
03:31 we've come across it. Yes.
03:33 Okay. And again, from an R2 perspective and footfall perspective, where are you seeing
03:40 higher traction from a footfall sense? And if you talk about the R2 as well, where do
03:47 you see it at the end of the year? Where do you plan to average it?
03:50 Yeah, current R2 is roughly about 1600 rupees, if I'm not mistaken. So that will continue.
03:57 We will make sure that we maintain R2s. But having said that, during Q3, when our school
04:06 seasons come into play, when discounted tickets come into play, our R2s will drop a little bit,
04:11 but that's to be expected. But R2s have been stronger this year for us. And we expect that
04:18 to continue going forward as well. Like, for example, every year we take about
04:22 5 to 10% increase in ticket prices. And this year also, we will be doing that.
04:29 It's also a function of the number of attractions or new attractions that we add to the parks.
04:34 So that also is happening across all our existing and new parks. So
04:38 we should be able to do price hikes every year. Yes.
04:41 Okay. And overall, if you see in terms of, even if you have to look at the kind of traction you're
04:49 getting now between online bookings and offline bookings, are you seeing things where online
04:57 bookings are increasing? Yes, we get almost 30% of our bookings
05:04 through online bookings. This was only 5% pre-COVID. So it's more from 5 to 30% of bookings
05:12 coming through online. So that's a good sign for us. It gives us a lot of headroom to figure out
05:18 forecast demand and also better prepare ourselves for busy days and things like that. So that's a
05:27 conscious decision that we have done. We are also in the middle of a digital transformation. We want
05:32 to look at improving our tech capability for bookings and CRM and things like that. So
05:41 that's an ongoing process. Okay. Now, clearly, overall,
05:48 FI23 has been a landmark year for the company. I mean, you've seen record-breaking achievements,
05:56 highest EPS ever, I think 130% growth, if I'm not mistaken, is what we saw, versus the earlier
06:03 peak EPS, which we had seen in FI20. And this has been accompanied by a high footfall revenue
06:09 EBITDA as well as SPAT. If you have to look at the coming years, how easy is it going to be
06:16 for you to break FI23 record? Well, we should be able to break that record this year. I mean,
06:25 that's what we feel internally. We should do better than last year in all metrics. And I think
06:30 we are well on our way to do that as well. But again, this is the first time we are doing a
06:36 normal year post-COVID. So it's hard for us to predict what kind of numbers we'll be doing.
06:41 But I think we should do better than last year is our internal targets, which we've given
06:46 everybody. And they're all hopeful of doing it. And going forward, because we have new projects
06:53 coming on screen, for example, next year, we will have Orissa come on screen. And the year after
06:58 that, we will have Chennai come on screen. So because of that, I think we'll be able to
07:03 maintain revenue growth. Of course, EBITDA and PAT numbers could fluctuate a little bit,
07:11 depending on the depreciation that-- I mean, depending on-- sorry, PAT numbers could be hit
07:16 a little bit going forward when new projects come online. But EBITDA numbers should be strong.
07:21 And I think we hope to go from strength to strength.
07:25 Right. And from a resort perspective, I think Bangalore, we did see the occupancy go down
07:32 slightly in the first quarter. But how is the trend looking like? Where are you in terms of
07:37 the occupancy rates and the average room rates? And secondly, what's the plan with building further
07:43 resorts? The resorts have done exceedingly well for us during the post-COVID year, which was last
07:51 year. Like I said, this year is kind of going back to a new normal. And occupancies could be
07:57 a bit lower. But I think our ARRs and ARRs will be higher in the resort. And we are trying to make it
08:03 a more value-added and more premium offering. So that's the effort from the company.
08:11 We are also in the process of initiating expansion in the resort. We are adding some rooms.
08:17 So yeah, we are bullish on this because we feel that for our parks,
08:21 a resort becomes a nice addition in terms of people to extend their stays and stay an extra
08:27 day. And our parks have become sufficiently large for us to do that. So I think it's going to be a
08:33 continuing trend for our company. After we do the expansion in Bangalore, we are planning to do a
08:41 similar project in Hyderabad as well. And maybe Cochin and then Chennai. So all the big projects,
08:48 all the big parks, we want to do a resort adjacent to our parks. Right. So Arun, overall, from a
08:54 CAPEX perspective, one is the maintenance part of it for the existing parks. Two is adding new
09:00 attractions to the existing parks. And three is construction and additions in the new parks as
09:07 well with the resort. How much would that stand at from here on? How much CAPEX are you looking at
09:12 in terms of 24 as well as FY25? And what's the funding plan for the same? So in the next two
09:21 years, we will be spending close to 500 crores for Chennai and Orissa together, which out of
09:30 which I think about 150 crores has already been spent in the two projects. 100 crores in
09:36 110 crores in Chennai and about 40 crores in Orissa has already been spent.
09:43 We have sufficient cash on books for us to complete these projects without any external
09:49 help. Going forward also, I think we might take some loans at some point, maybe after two to three
09:55 years when our other new projects come into stream. But to complete our existing projects,
10:02 we don't need any outside help. Also, maintenance CAPEX is planned into our system. So we roughly
10:09 spend about 10% of our top line on maintenance CAPEX, which is adding new attractions to existing
10:19 parks, refurbishments, new restaurants, new F&B. So all that has already been taken care of.
10:25 Right. So Arun, with this, where does the land bank stand at? How much is the
10:32 current utilisation overall? And what's the utilisation plan going ahead?
10:40 So we have roughly about 350 to between 350 and 400 acres of land with the company.
10:49 Most of it is pre-owned land, which we own and except the Bhuvaneswar one, which is 50 acres,
10:55 which is at least roughly 50% of that has been utilised. I would say 50%. And the rest of the
11:05 properties will get used as we expand the park, like every year when we add new attractions to
11:10 an existing park or a new park, obviously we will consume more real estate. So for us, it's very
11:16 prudent that we have a sufficient free area so that we can expand our offering as the numbers
11:22 grow. For example, when we opened our Cochin Park in 2000, the capacity was only 5000 visitors and
11:29 the park occupied only 15 acres. But now the park is almost 35-40 acres in size and it can
11:37 accommodate more than a million visitors. 1.2 million visitors is what we did last year. So
11:42 that's a huge growth in the footfall. So for that to happen, obviously we need to keep spare real
11:48 estate. Right. And lastly, if you see from a yearly, if you have to see FY24, as you're mentioning,
11:57 that this will be one of the first years post pandemic as a full year,
12:01 what's the kind of growth you are looking at? Like I said, we hope to do better than last year. And
12:10 internally, we are confident that we should do between 15 and 25% growth in numbers for this
12:17 financial year, but in terms of revenues, but the rest we don't know. I mean, it's a wide margin,
12:25 like I said, it's hard to say how each season is going to play out and how exactly it's going to
12:31 play. But having said that, we are bullish and we are seeing a strong demand from, especially during
12:36 festival seasons, which we already started experiencing now with Dasara and everything,
12:43 and we are quite confident that we will do better than last year. Right. I think your two levers
12:48 that Arun placed from here on is what I'm starting to see some smart moves. Thank you Arun so much
12:53 for joining us on the show and sharing the news. So clearly, you know, good projects that are at
12:58 play, a land bank which stands around 350 to 400 crores and majority of it, 50%, little over 50%
13:06 has already been utilized and majority of it is pre-owned. In terms of existing projects which
13:13 are underway, the company has enough cash on the books to support the CapEx for existing projects
13:18 and going ahead, they will look at other options as well for newer projects. And FY24 probably
13:25 will break records that the company hit in FY20, sorry, FY24 will break records that were hit in
13:33 FY23 as well from a financial perspective. So interesting moves coming in on this counter.
13:39 That's all that we have in this session. Thanks for watching. And lots more lined
13:43 up on the other side. Please stay tuned to B2Prime.
13:52 [END]
13:53 B2Prime.com
13:55 [BLANK_AUDIO]
Comments