Wonderla Amusement Park Expands in Bhubaneshwar
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00:00Good morning and welcome.
00:10Thanks for tuning in to the small and mid-cap show on NDTV Profit.
00:13I'm Harsh Saita.
00:14And with us, we have Mr. Arun K. Chittalapalli,
00:18who is the managing director at Vandala Holidays.
00:21Welcome to NDTV Profit, sir.
00:24Thank you for having me on the show.
00:26Yes.
00:27So Varun, talk to us first off about footfall, right?
00:31Footfall is down when I'm looking at it year over year.
00:34Talk to us about what trends are playing out
00:36and what are you seeing on ground?
00:40Yeah, so last quarter, we did have some softness
00:43in footfalls, especially from the group segment.
00:46And this is because we are coming out of COVID,
00:49the patterns in which schools do their excursions, schools
00:53and colleges, that has changed.
00:55And so some of these things we can't avoid.
00:58And we were able to partly offset
01:00that because of our growth in retail footfalls.
01:02So if you look at our revenues, our revenues are better,
01:05even though there was a small footfall drop.
01:08But yeah, so that's pretty much about the quarter.
01:11I think retail footfalls did well,
01:14but group footfalls didn't do so well in Cochin especially.
01:18Do you expect that to change going forward?
01:22So for us, Q1 is a retail footfall quarter.
01:25It's a holiday quarter.
01:28It's been doing well,
01:29except that we had the heat wave in Bangalore.
01:32So that affected our footfalls a little bit.
01:34But there's a strong recovery in May.
01:37So it's going, I mean,
01:38every quarter for us works slightly differently.
01:42So it's hard to kind of say that it's not the same trends
01:45that continue every quarter.
01:48Sure, take your point.
01:49And with regard to ARPU,
01:51you've guided for a 10 to 15% increase in your pricing.
01:54What does that do to ARPU going forward?
01:56Also, you're adding new rides to your existing setups.
02:02So where should one see ARPU number go?
02:07More than 15%,
02:08can we expect something like that going forward?
02:12This year, we are expecting our ARPU growth
02:14of roughly about 10 to 12%.
02:16Last year, we had a huge ARPU growth.
02:18So we are not expecting a big growth on top of that,
02:21because we have already taken a substantial price hikes
02:24for all the parks.
02:25But this year, we are expecting about 10% ARPU growth,
02:28leading by the increase in non-ticket revenues.
02:33Okay, and therefore,
02:35what would the levers be for that non-ticket revenue?
02:39Non-ticket revenues,
02:40sale of food and merchandise in the parks.
02:43And that is showing a lot of growth.
02:46In fact, it's growing at a faster clip
02:49than our footfalls or even revenues.
02:52So we are expecting that to show bigger numbers this year.
02:57Sure, plenty of expansion plans on the horizon.
03:00You have Orissa, Chennai coming up.
03:02Chennai in 2026, if I understand correctly.
03:05Also, you have Bangalore, Hyderabad,
03:08in terms of resorts, which you are coming up with.
03:12So what's the pipeline like
03:13and how do you expect things to evolve in terms of launches?
03:18Yeah, so we have two parks which are under construction.
03:22We are soft launching our park in Bhubaneswar,
03:25in fact, next week.
03:26So it's going to be open to public from next Friday onwards.
03:30So that's going to be adding to our kitty.
03:34Next year, we will have Chennai,
03:36which is a larger amusement park,
03:38also coming on stream.
03:42So these two will definitely help us to show growth
03:45because the other three parks that we have
03:49are already tenured parks,
03:51the youngest being Hyderabad, which is about seven years old.
03:54We can expect some growth in Hyderabad.
03:55We don't expect huge growth coming in from,
03:58especially in footfalls coming in from our other two parks,
04:01which is Bangalore and Bangalore and Kochi.
04:05So we are expecting more growth from these new parks.
04:08So for example, Bhubaneswar this year onwards
04:10and then next year, Chennai and so on and so forth.
04:14Understood.
04:15And with regard to Bhubaneswar,
04:17what's the likely footfall and ARPU going to be like?
04:22So we are not getting a full year,
04:23as you know, we have missed pretty much April
04:27and then most of May.
04:28So we are expecting about four lakh visitors
04:31in our first 10 months,
04:33which I think is pretty good.
04:34And I think it should definitely help us,
04:37show better numbers.
04:39And in terms of, it's hard to predict revenues
04:42because it's our first year.
04:43So there will be a lot of offers and promotions,
04:46but we are expecting reasonably good ARPUs there,
04:50about between 800 and 1000 rupees kind of ARPU.
04:53And yeah, so that's the kind of expectation
04:57we have for Bhubaneswar this year.
04:59Understood.
05:00And therefore, building in a number of 10 to 12%
05:03on total ARPU.
05:05Correct, correct.
05:05Got your point.
05:06And how long do typically some of these parks take
05:09in terms of recovering the investment,
05:12the payback period?
05:15So Bhubaneswar for us is an experimental park.
05:17It's a new model for us.
05:19It's an asset like model where we have partnered
05:21with the government and the government has helped us
05:23with the land acquisition, such a thing.
05:26So it has helped us reduce our capex.
05:28So it should have a better payback period
05:32compared to our other more expensive parks.
05:34We are expecting it to pay back
05:37within six to eight years.
05:40Whereas the other larger parks
05:42will take maybe a couple of years more.
05:44Understood.
05:45And with regard to capex, how do you plan to fund it?
05:50Any plans to take on more debt?
05:52What's the kind of debt you're gonna be comfortable with?
05:56See, for Bhubaneswar, we don't need any debt.
05:59We already completed the project
06:00and the total investment as of today stands roughly
06:04about 190 crores.
06:07It could be a little lower also once the numbers
06:09kind of come in.
06:10So between 180 and 190 crores is what we're looking at.
06:13And for Chennai, we have about a 500 crore outlay
06:17out of which 140 crores has already been invested.
06:21The remaining 350 crores will be spent
06:25in the next year, year and a half.
06:28We might have to take on some debt, but marginal debt only.
06:33If we have further projects coming in and we might,
06:36so at that point we will look at some form of debt
06:39and also maybe if we have any projects coming to our side,
06:43we will also look at some equity dilution as well.
06:46Okay.
06:47Some equity dilution also possible.
06:50But with that, we're completely out of time.
06:52Definitely warrants a larger conversation
06:54with regard to funding as well as where that is expected
06:57to go at.
06:58But thank you so much, Arun, for coming in,
07:00speaking with us and breaking this down for us.
07:03I wish to bring on board the CFO at Eklark Services
07:09Srinivasan Nadadhur, who's gonna talk to us about,
07:13of course, Q4 numbers, but more interestingly,
07:15Srinivasan, talk to us about the four-year plan
07:18which you guys have unveiled.
07:21What's the highlight of it?
07:22What can one expect going forward
07:24just from a viewer reference?
07:27Sure.
07:28Thank you for having me on the show.
07:30So broadly, the strategy is to be a,
07:35be dominant in the service niches
07:37that we are already presenting
07:40and to gain full wallet share
07:42for all the customers that we service.
07:45At the same time to try and gain more clients and logos.
07:49So in each of our three businesses today,
07:51maybe we offer one or two services per client
07:54and we want to sort of take the entire firm
07:58and all the services of the firm
08:00available to all of our customers.
08:02So that's the broad idea.
08:05And we believe that that should lead
08:07to improvement in revenue predictability.
08:13And to do this, we feel that we need to have
08:15a sharper focus on sales.
08:18We need to be seen as the preferred service provider
08:21for the industries that we operate in.
08:24And we need to have an increased risk appetite
08:27and the willingness to try and close large deals
08:32and longer term deals.
08:33So that's the essence of our strategy.
08:37Specifically coming to margins,
08:39all of this strategy that we are talking about
08:41requires some amount of investment upfront.
08:45And in Q4, we've made investments
08:48to augment the business development team.
08:50So we've hired senior folks onshore.
08:54We've also added people in technology and analytics
08:58in our India delivery centers.
09:00And that is why margin is a little off
09:03by about 180 basis points from the previous quarter.
09:09Okay, and is that because your hiring is roughly 2%
09:16on a sequential basis, net hiring, I believe.
09:20Is this because you're hiring at a higher level
09:24that you're seeing margins come off?
09:26And is that the logic?
09:28Is that the rationale?
09:30That's right.
09:31In delivery teams, the hiring has been at a senior level
09:33and that's part of the investments
09:35that we are making to try and get more senior people
09:37on board.
09:39In the sales team, the hiring again has been
09:41at senior levels.
09:43So we recently onboarded a chief risk officer.
09:46We recently onboarded a chief marketing officer.
09:49So all of these investments are part
09:53of the four year strategy that we are talking about.
09:56Okay, and how do you expect,
10:01therefore margins to evolve going forward?
10:04How do you expect top line expansion?
10:06What should one expect maybe in FY25 in the more near term?
10:10Yeah, so usually we've guided for EBITDA margins
10:14to be between 24 and 28% in prior years.
10:17This year, we are saying that because investments
10:20will be upfront and usually any sales team
10:22that you bring on, typically they take about six
10:24to nine months to become productive.
10:26So there will be upfront investments.
10:29And therefore we are guiding that EBITDA for FY25,
10:32the first year of our new strategy will be between 24 to 28%.
10:39Having said that, the way it will play out
10:42is that usually we give our wage hikes in Q1.
10:46So Q1 margins will be 300 dips down from Q4.
10:49And then over a period of time, it will pick up.
10:54It is difficult to predict what the revenue growth
10:59or aspiration is to be in the top quadrant
11:02of industry growth, both in terms of revenue and margin.
11:07But it is kind of hard to put a specific number.
11:1120% plus?
11:14As I said, it's hard to put a specific number
11:16given the fact that there continues to remain
11:19a lot of uncertainty in the market.
11:23Spend continues to remain subdued.
11:26So it's hard to give a number.
11:27Okay, and with regard to where you are putting
11:31or making investments outside of purely people,
11:35is there a specific place or geography
11:38that you're targeting in terms of expanding your top line?
11:44We may think of investing in near shore delivery centers,
11:48but that investment has not yet,
11:50we have not made a decision to go ahead with that.
11:54So at the moment, the investment is restricted
11:56to purely people.
11:58We are adding some facilities in our India delivery centers,
12:03but that is just a seat addition.
12:06And if that were to happen,
12:07would that dilute margins as well?
12:10Yeah, we think so, but not,
12:12and that is included in our margin guidance.
12:15Fair.
12:17And that will happen only in H2.
12:20So it will take about six months
12:21for those seats to come up and be ready.
12:24Okay, and with regard to new orders coming through
12:28and how clients are approaching it,
12:31how are things evolving?
12:32If you can talk to us about the demand environment.
12:36So of our three businesses,
12:37we think that the demand environment
12:40in financial markets continues to remain strong,
12:43barring one or two clients.
12:45The digital business where most of the discretionary
12:48and tech led spend is,
12:51that seems to be a challenging kind of environment
12:55with both luxury clients and retail clients
13:00facing quite a bit of uncertainty.
13:03Whereas customer operations, which is our third business,
13:06that seems to have fairly stable demand.
13:08So it's kind of a mixed environment,
13:11but overall, I would say that the environment
13:13is definitely challenging.
13:15Understood, and last off, digital recovery expected when?
13:20Maybe in the quarter or two, I think.
13:22Okay, okay, fair.
13:24Okay, thank you so much, Mr. Srinivasan.
13:26It's been a pleasure speaking with you
13:28and breaking this down.
13:29Thanks so much for coming in, speaking with us.
13:31Well, with that, let me quickly switch over
13:34to our next guest.
13:36We have the CFO and whole time director
13:38at Patel Engineering, Ms. Kavita Shirvekar,
13:41who's joining us with regard to Q4 numbers
13:43and what we can expect going forward
13:45from Patel Engineering.
13:47Welcome to NDTV Profit, ma'am.
13:50Thank you, thank you.
13:51Right, ma'am, on a console level,
13:54your margins have gone up.
13:55First off, I want to try and understand,
13:57standalone, your margins are pretty much stable,
14:01but on a console level, what's happened?
14:03Is there a specific execution which has taken place,
14:06which is why your margins are more elevated
14:07this time around?
14:09So console margin is also more or less
14:12in the same line of standalone,
14:14which is advertised around 14 to 15%.
14:18If you see on PNN, you will see it is around 17.5%.
14:22It is on account of, there is some difference
14:24of arbitration award received during the quarter.
14:29All right. Around 50%.
14:32All right, I'm joined in by my colleague,
14:34Anushi Vakharia, who tracks infrastructure closely.
14:37And ma'am, while we are at it,
14:40I also want to try and understand
14:41the kind of order pipeline you have.
14:43It's come off from those highs.
14:46You expect it to go back,
14:49back to above the 20,000 crore kind of level post-elections.
14:52Is that what one can expect?
14:56Yes, it is true.
14:56See, right now our order book is around 18,600 crore.
15:01Post-election, we see a lot of huge orders
15:04coming up in pipeline.
15:06See, we mainly operate in hydro,
15:09irrigation, and tunneling sector.
15:11Our 60% is coming from hydro,
15:14around 20% is from irrigation,
15:15and rest from other sectors.
15:17So we see there is a huge opportunity
15:20available in the sector where we operate in.
15:23Like government is planning,
15:24like 50% to convert into renewable energy by 2030,
15:29to achieve net zero emission by 2017.
15:33So we see, yes, our order book will go up,
15:35substantially will go up post-election.
15:39Hi, ma'am, Anushi joining you.
15:41I wanted to understand now that you've said
15:44that the order inflow looks quite strong.
15:46Wanted to understand that you wanted to raise funds
15:48for this post-election.
15:49Can you quantify the number that we are looking at?
15:51And also, what is the kind of order inflow
15:53that we are looking for FY25?
15:56We have already raised QIP 400 crores via QIP.
16:01So which will not only help us to reducing the debt,
16:04but also it will augment our working capital
16:07for required for current projects and future projects.
16:11Okay, and ma'am on the execution front,
16:14as well as on the new orders front,
16:16where does the order book go in terms of
16:19how many new orders are you looking to capture in FY25?
16:23And how will execution work out for you?
16:26So we see, as regards order book,
16:28we see around 10 to 15% growth in the current debt.
16:32See our current order book is around 19,000 crore.
16:35So we see new orders around 10,000 crore.
16:39We are targeting around 10,000 crore
16:41increase in our order book.
16:43So at the end of March, 2025,
16:46our target is to reach to around 25,000 crore.
16:50And wanted to understand in the segments
16:52that you have given,
16:53can you give us a breakup on the margins also for the same?
16:56And what are the kind of margins
16:58we shall expect going forward in FY25?
17:02So you see our EBITDA is around 14 to 15%.
17:06We expect it will remain in the same level.
17:10Okay, and risks to that, ma'am,
17:11because you are seeing currently
17:14a decently benign environment in terms of pricing.
17:18Any risks to that?
17:20Yeah, most of our project is covered escalation,
17:24which is we get paid with the WPI indexing formula.
17:29So all the price escalation was material
17:32and labor, we get paid for it.
17:35Understood.
17:36And with regard to execution,
17:37you are expecting maybe next year,
17:405,000, 5,500 crore worth of execution.
17:43How will execution work out?
17:45It is true.
17:46So considering our current order book,
17:49which itself is strong,
17:50so we expect around 10 to 15% growth in our revenue next year.
17:54Understood, ma'am.
17:55And ma'am, with regard to CAPEX and debt,
17:58what are the plans going forward?
17:59What should one expect?
18:01So our current gross book is around 1,100 crore.
18:05Every year, we add around 100 to 200 crores CAPEX
18:09depending on the new projects which we get.
18:11And our current debt is around 1,800 crore.
18:15So if you see in the past,
18:18we have been consistently reducing our debt.
18:21At the peak 5,500, we have reached to now 1,800.
18:26If you consider interest payable debt,
18:28760 is around contract advance and 1,800 is debt.
18:33And last year, it was 2,900 total,
18:36and this year it is 2,600.
18:38So we have reduced around 300 crores.
18:42All right.
18:43Now you've explained about the CAPEX, debt,
18:44the margins that we should,
18:45but I wanted to understand from you,
18:47what is your strategy that we are going to look forward
18:49now that we are stepping into the new fiscal year?
18:54So see, our target to,
18:56see, we see huge opportunities available in the sector.
19:00So we are fully geared up to take an advantage
19:03of the growth opportunity available in the sector.
19:07We work in hydro, irrigation, and tunneling,
19:10and we envisage to increase our order book
19:14in the area where we operate in.
19:17And further, we will look for a road
19:19and other sector also selectively
19:22based on the margin and the geographical complexity.
19:27That's it.
19:29Well, thank you so much, Ms. Shirvaikar,
19:31for speaking with us, giving us all of that perspective.
19:34But with that, it's a wrap on our show.
19:36We are completely out of time.
19:37From Anushi, myself, everyone who puts the show together,
19:40thanks so much for watching.
19:41Stay tuned to NDTV Profit.
19:43Thank you.