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Wonderla Holidays Ltd
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Ladies and gentlemen, good day, and welcome to the Q4 FY '24 Earnings Conference Call of Wonderla Holidays Limited, hosted by Monarch Networth Capital. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Rahul Dani from Monarch Networth Capital. Thank you, and over to you, sir.
Yes. Thank you, Michelle. Good afternoon. On behalf of Monarch Networth Capital, we're delighted to host the senior management of Wonderla Holidays. We have with us Mr. Arun, sir, the Managing Director of the company; Mr. Saji, CFO; and Mr. Dheeran, COO of the company. We will begin the call with the opening remarks from the management and then move to Q&A. Thank you, and over to you, sir.
Thank you. This is Arun K. Chittilappilly, Managing Director. We would like to welcome all of you to this Q4 earnings call FY '24. Good afternoon, and welcome to everyone. I extend a warm welcome to all of you to discuss the Q4 results. I'm accompanied by our CFO, Saji; and COO, Dheeran Choudhary. I hope everyone had a chance to go through our results and the investor presentation. The year began with a strong start, maintaining our growth momentum established by the company in recent years. Our revenue from operations for the quarter amounted to INR 99 crores, and the -- for the full year -- and the full year, it was INR 483 crores, marking a year-on-year growth of 13%. During this year, we also achieved our highest ever EPS of INR 28, clocking 6% year-on-year growth. We are also experiencing consistent growth in our marketing efforts and have been instrumental in raising awareness. During the quarter, we have launched thrilling attraction called Air Race in Kochi. The quarter has been packed with excitement featuring themed celebrations, Women's Day, Holy celebrations and Valentine's Day, et cetera. We also enriched our customers with -- through effective periods and theme food product offerings. We had Sunburn event in Kochi Park, New Year celebration at Hyderabad and live concert at -- by renowned singer Vijay Antony at Bangalore Park.
Footfall for the quarter stood at 7 lakhs, and footfall for the full year stood at 32.5 lakhs. Despite a challenging fourth quarter, mainly because of drop in group footfalls in Kochi, our footfalls reflect the growing popularity of our attractions and effectiveness of our marketing efforts. Our team has worked diligently to maintain high standards of safety, cleanliness and customer service, contributing to -- significantly to our positive guest feedback and repeat visitation. ARPU for the quarter stood at INR 1,349, an increase of 14%. And for FY '24 at INR 1,430, registering a growth of 15%. Our increase in ARPU was driven by a healthy growth in non-ticket revenue along with encouraging response from walk-ins, groups and all aspects of our customer base. Throughout the year, we've been pioneering new parks. As mentioned in our previous calls, we are in discussions with various state governments to start multiple projects. Our Odisha Park is swiftly taking shape, and we have just concluded the press launch of the park, which will be opened to public from 24th of May 2024. We are confident that this new addition will further enhance our growth and appeal and contribute to the revenue and footfalls in coming years. As for our Chennai project, the initial groundwork and -- including leveling and the workshop setup have been done, and we hope to operationalize this park in FY '26. As we look ahead, we -- our outlook for future growth is incredibly bright. We are also confident that our focus on enhancing guest experiences, fostering innovation and strategically expanding our offerings will drive not just growth, but sustained excellence.
We are immensely grateful for the dedication of our team, our customers and steadfast support of our shareholders. Together, we are poised for even greater achievements.
With this, I would conclude my remarks and hand over the call to Saji, our CFO, for detailed analysis of financial performance. Over to you, Saji.
Yes. Thank you, Arun. Good afternoon, everyone, and thank you for joining us for the Q4 and FY '24 earnings call. I will provide you with the concise overview of our financial performance for both the quarter and the full year. Starting with the Q4 FY '24 financial performance, our revenue, including other income for the quarter, stood at INR 99.7 crores, grew by 1.1% Y-o-Y basis. EBITDA for the quarter reached INR 40.5 crores, degrew by 28 percentage on a year-on-year basis. This was due to reduction in our footfall, increase in our payroll expenses and reduction in other income. EBITDA margin for the quarter stood at 38.7%. Adjusted EBITDA for the quarter stood at INR 41.9 crores, a margin of 40 percentage, after ESOP adjustment of INR 1.33 crores. Our profit after tax for the quarter stood at INR 22.6 crores, down by 35.5% on a Y-o-Y basis, and PAT margin stood at 21.6 percentage.
Now focusing on FY '24 financial performance, revenue including other income for the year stood at INR 506 crores, a substantial increase from the INR 452.4 crore in the same period last year, representing an 11.8% year-on-year increase. EBITDA for the year stood at INR 250.1 crore as against INR 234.6 crores same period last year, showing a 6.6% year-on-year increase. EBITDA margin for the year was 49.4%. Adjusted EBITDA for FY '24 was at INR 251 crores as against INR 235 crores for the same period last year with a margin of 49.7%. As mentioned earlier, this is mainly after adjusting the ESOP expenses. Profit after tax for the year stood at INR 157.9 crores, up by 6.1% Y-o-Y basis. PAT margin stood at 31.2% for the year. Moving on to park wise footfall numbers, FY -- for Q4 FY '24, footfall for Bengaluru Park stood at INR 2.43 lakh; Kochi Park at INR 2.32 lakh and Hyderabad Park stands at INR 2.34 lakhs. And for the year, Bengaluru Park, INR 12.7 lakhs; Kochi Park, INR 10.33 lakhs; and Hyderabad, INR 9.49 lakhs. With this now, I conclude my speech and open the forum for Q&A session.
[Operator Instructions] The first question is from the line of Angad Katdare from Sameeksha Capital.
Congratulations for the Bhubaneswar Park. My first question is on footfall. If I look at the full year of '24 -- FY '24, our footfall has decreased by 2%, while our ARPU has increased by 15% on a Y-o-Y basis. Do you see this as a major reason for the fall in footfall? Or are there any other reasons for the same? That's my first question.
So the reason for footfall growth, especially in this last quarter is because the change in our group sales. Normally, our Kochi Park has a high -- what do you call it, contribution from group sales in January. That did not happen this year. Now the reason we are told is because of change in exam -- whatever, the exam dates and also preponing of exams because of elections. So these are the 2 reasons that we were given. The other 2 parks have not seen this issue. Only Kochi, I think the group footfalls degrew by 37%. So I'll give it to -- hand over to Dheeran, he can elaborate on this further.
Yes. So if you also see our ARPU growth, our ARPU growth is actually coming on back of driving our sales per head, which is our non-ticket revenue, so we have been consistently making a lot of efforts in our F&B offerings and retail offerings. And that is actually driving our overall ARPU growth. And, again, to stick with Arun, yes, there is -- overall for the year, there is a 2% degrowth in footfall. We also want to be mindful of the fact that we are actually -- we were -- we had a post-COVID pent-up demand. So we're very positive that on that demand, we managed to almost keep our footfall stable while growing our ARPU at 15%. And we consistently look at various opportunities that we can unlock, which we are actually working in FY '25.
Okay. And so what will be the guidance for footfall and ARPU for FY '25?
See, we are -- because our existing parks are already -- they are old assets and pretty much running at capacity, we don't see huge footfall growth potential, especially in Bangalore and maybe Kochi. We do feel there is footfall growth potential in Hyderabad. We do still feel that there is more potential for us to unlock. But having said that, I think at a company level, we are not expecting more than 5% footfall growth for the year, for FY '25. But the footfall growth and -- ARPU growth will be about 10%, 10% to 12%. And then the next phase of growth for us will come from our newer parks.
Okay. So just to clarify, 5% is for the existing parks, right?
Existing parks, yes. Yes.
Okay. And my second question is, so you mentioned that you are in talks with the -- with 4, 5 governments. So any update on that? If you could share some update, that would be helpful.
Nothing as of now because this is the election season. I think all of those conversations have been put on hold as of now because of code of conduct. We are waiting for normal government functioning to resume, then we will take up.
The next question is from the line of Karan Khanna from AMBIT Capital.
Just a couple of questions, Arun. First, what is the expected -- while you're expected to launch the Odisha Park later this month, how should one think about the revenue and margin expectations from this park in FY '25? And how soon do you expect this to become EBITDA breakeven? That's question number one. And question number two, on the ARPU front, given we've seen almost 15% growth in FY '24 over '23 and similar growth in FY '23 over FY '22 also. How should one think of ARPU growth for next 2 to 3 years? Do you still see the ability to drive low to mid-teen ARPU growth without impacting footfalls much at the existing parks?
Okay. So first part of the question, Bhubaneswar, we are actually soft launching from 24th onwards. We are actually taking this call from Bhubaneswar. We just finished the press launch of the park. Tomorrow, we are having -- tomorrow and day after we're having a preview meet for some well-wishers and influencers and all that. And then the next week, the park is opening. We are happy to say that we have finished the project in 13 months' time, which I think is practically unheard of in this segment. So we are very happy that the park is completely finished and we are open. Footfalls, anyway, it's very hard to predict, but we are -- internally, we are hoping to achieve at least 4 lakh footfalls. ARPU, again, it's hard to kind of give a guidance on that because first year, we will be doing more promotions just to get people excited about coming to the -- this new park. But having said that, I think we are expecting about 4 lakh visitors at an ARPU of roughly INR 800 to INR 1,000. So that's the way we are looking at it. Yes, these are conservative estimates. These -- in all likeliness if weather and all these -- everything permits, we should do a little better than that also. But otherwise, I think we are quite happy with the way it's come out. Second part of the question, we are expecting an ARPU growth in our existing parks of around double digits, 10% this year. Because we've had huge ARPU growth in the last 2 years, so we may not look for a huge ARPU growth this year, but 10%, I think, is achievable. And like I said, the marginal footfall growth is all we are projecting from our existing parks. Yes, because, again, coming off COVID highs, there could be some fluctuations in footfalls. Like, for example, last quarter, what has happened is our school crowd, especially for one park completely, they didn't come around, so that whole business was not there. So these things can happen because we are coming off COVID highs. But I think we are more or less confident that we should be able to maintain marginal footfall growth and about 10% ARPU growth.
Sure. And if you think about the near-term trend because we're also seeing the election phases across various markets, so are you seeing any softness in terms of footfalls during the quarter because of the elections or that's a nonevent for you?
We've had some impact because of the heat wave, especially in Bengaluru. The other 2 parks are okay. But again, the whole quarter is not yet over. And now I think in May, there is a strong bounce back. So -- I mean, we'll have to wait for the end of the quarter to see the whole effect. But yes, heat wave did have some impact on footfalls.
Sure. And lastly, on Chennai, any changes to the timeline or you're on track for commissioning second or third quarter next year?
We will be commissioning most likely third quarter. We are trying to finish in second quarter because we would like to be ready before the third quarter. There could be some delays because unseasonal rains plays havoc in Chennai sometimes. So we hope that, that doesn't happen this year. If that doesn't happen, there is no delay, we should be able to open either late Q2 or early Q3.
We'll take the next question from the line of Shivam Agarwal from Equitree Capital.
Sorry, am I audible?
Yes, sir.
I have a couple of questions. The first is I just want to know if focus is on the franchisee model. Like if you just give our name to someone who want to develop a park, but it's delinquent for selecting the brand. Is there any thought processes on a franchisee kind of thing?
Yes, we are. We do want to get into management of parks without owning them. We have started a few discussions. Nothing has been done yet in concrete steps. Our immediate goal is, as you know, we are trying to expand into other territories of India. Our preference would be to do this on our own, but then geographies where we don't have land parcels or if there is a local business person with land who is willing to partner, and we are open to doing our joint venture as well and management contract, both, both are possible.
And the second thing, as you mentioned earlier, like we are also looking for potential park in Ahmedabad, but one of our competitor has already announced the park in Ahmedabad. So what is the like thought process coming after that?
See, they are -- I mean we are not going to comment on competitors, but they are not looking at a large park like us. We build large amusement parks. They are looking at a small park in the city area. We are looking at a large format park. So I think format itself will be different. And we want larger footfalls, like our parks typically get more than 1 million footfalls from each location. So from 3 parks, we get 3.5 million visitors. So that's the size that we are looking at. I think they have different -- their parks are not as big. So I'm not really looking at that as a direct competition.
The next question is from the line of Suruchi Parmar from NX Wealth Management.
Am I audible?
Yes, ma'am.
Just one question from my side. If we see like our footfalls are not growing as...
Ma'am, I'm sorry to interrupt. If you would use your handset, the audio quality will be better, ma'am.
Yes, yes. Sure. Yes, am I clear now?
Yes, ma'am, thank you. You may proceed.
Yes. Just I want to ask a question regarding this. Our footfall is not that much growing. And mostly, the revenue is coming from the ARPU sales -- the ARPU which is growing, the food portions rather than the ticket portions, correct? And if we see the matured parks, in those footfalls is not that much, if you see in Kochi and Bengaluru also, even Hyderabad. Now the new parks, which are coming, they have ARPU less than the matured ones. And the footfalls, we don't know right now how much it will be. So what is the percentage CAGR growth you are expecting in coming 2, 3 years?
I already told you where parks are matured parks, we don't -- we're not looking at large footfall growth. Between -- I mean, low single-digit footfall growth is all we can expect, especially from Bengaluru and Kochi. These are parks which are more than 15 years old. And ARPU growth is possible because I think a lot of people -- the way we sell our F&B and retail, we are looking at double-digit growth in ARPU, but single -- low single-digit growth in footfall. If you look at our new parks, of course, they will grow a little faster because it's a new market, and we are projecting only like 4 lakhs visitors, which is less than half of our existing park. So there is definitely room for us to grow there.
Yes. So what percentage CAGR you are estimating like in '25-'26?
Hard to estimate CAGR growth. We will have -- because every project will be different. Like, for example, Chennai will have a higher base of footfall; Bhubaneswar, which is a Tier 2 city, will have a lower base of footfall. So it's hard to predict, but we are -- we'll definitely have double-digit growth in footfalls for the next few years if you look at new and old parks together.
And what is your estimate of opening like new parks till FY '30? You have estimated some number, I guess.
See we want to open about -- we are looking at another 5 more locations in addition to what we already have. One or two of them will get closed before the end of this financial year. And the rest we will announce as and when they are ready.
Sir this will be like completely your own investment or you will be doing it like on lease basis or something?
We prefer to do the lease one, but we could do both, our own investment also, or we could do management contracts, all 3 can be done.
Okay. So it's not like any preference, you can go any which ways you are confident.
Yes, just concerned on the location and whether land is available or whether a partner is available, all those things.
The next question is from the line of Mythili Balakrishnan from Alchemy Capital Management Private Limited.
I wanted to check with you what you mentioned about the Odisha profitability because while you covered the revenue part, you did not mention anything on the -- how the EBITDA and the PAT would sort of look like.
See, it's hard to predict EBITDA and PAT because it's a new project. But because it's an asset-light model wherein we have spent less than INR 200 crores for a pretty decent size park, we are expecting it to be EBITDA positive from first year results. And at the PAT level, it should be positive from year 2 or 3.
Got it. I also wanted to check with you about this -- when we talk about footfalls at especially the mature parks, I just wanted to get a sense to that is there a capacity constraint based on the number of visitors the park can handle without getting into issues in terms of complaints and people unhappy about queue length. Is that...
Yes. There is a limit. For example, on a summer season, our parks are already running pretty full, so it's hard for us to justify a higher footfall. But there are, like, for example, Q2 and Q4, we do feel that there is some more headroom for us to grow.
Got it. But there is also some vacant space, which is available in these parks, and if we open more rides then does that increase the capacity per se? Or is that something...
To an extent -- I mean, it can be done with a larger investment wherein we open an entire new area into the park, not just 1 or 2 rides. Slowly, we can do that. But as of now, I mean, we are not looking at any large investments like that. But if you do large investments, definitely, we can relook at adding more capacity also.
Got it. And in terms of Hyderabad, we have seen a good kind of footfall growth which has happened, and this was clearly an area of focus for us. Could you just tell us a little bit more about the marketing strategies that have worked for pushing footfalls in Hyderabad?
Yes. Hyderabad for us is relatively new. It's -- the park is about 7 years old in Hyderabad, out of which 2 years were COVID. So effectively, we've only had 5 years of operations in Hyderabad. So for us, it's still a relatively new park. If you look at footfalls in Hyderabad compared to, like, for example, Kochi or Bengaluru, there's it's only 70% of the other 2 parks, whereas we feel that it should be close to 90% or it should be at par with the other parks. So we still feel there is a headroom for us to grow footfalls in Hyderabad. So accordingly, we are also spending higher in marketing the idea of a Wonderla Park to Hyderabad. And also, we have not marketed extensively in Andhra Pradesh. We've only done Telangana till now. So we are slowly -- this year onwards, we are marketing, and we are appointing tour operators in other parts of the Telugu belt. So that also should help us to kind of get a larger catchment area. So these are some of the initiatives that we'll be doing. And also Hyderabad is also sensitive to offers, so we will be doing some offer-led marketing and event-led marketing as well.
Got it. My last question is on Bengaluru. I just wanted to confirm that the footfall declined by 9% this quarter, right?
Bengaluru footfall, yes. Yes, yes.
Any particular reason for the Bengaluru decline because it was -- Jadenahalli had a very good...
See I think we lost our footfalls in Bengaluru and Kochi. Kochi actually had the highest footfall decline, followed by Bengaluru. It's mostly to do with exams. And because of exams preponed, I think a lot of schools and colleges canceled their, what do you call it, trips that they used to do to amusement park. So that is one of the reasons, I think, for us. This may or may not come back next year. So that's the only unfortunate thing here. We don't know whether we can predict it. To an extent only we can mitigate this. But wherever -- so one of the reasons why we didn't see a big jump -- drop is because we were able to -- through other marketing initiatives, we were able to claw back some footfall in February and March. So -- I mean, if we lose one segment, we try to do other marketing in for other cohorts and try to get footfalls there, and which worked to an extent. So that is why we didn't see a big dip in footfall and kind of it's still okay.
The next question is from the line of Vivekkumar from Bestpals Research and Advisory LLP.
Am I audible, sir?
Yes.
Yes, sir.
Sir, how fast we will be announcing? Maybe -- are we waiting for election because we have done a lot of MoUs? Any -- how fast we'll be announcing on picking up? Or you want to wait until the Chennai Park's CapEx is over and then start looking at new projects? That will be my first question.
No, no. We are already looking at other projects. It's just that we are not able to announce because governments are not functioning. This part of the government does not function during the election due to the code of contract. So we will not be able to sign anything in this period. Once the period is over, I think we can resume our dialogue with different state governments.
So mostly you're looking at Gujarat, Punjab and Uttar Pradesh and Madhya Pradesh, right, or any other?
Yes, yes. Yes.
Sir, second question, what are the long-term drivers of your footfalls? Like how do you think we would like -- we have to keep marketing and keep going into other places in and around periphery around the park? Or -- and are you tracking how often people come again, repeat customers, like how many people come every year, how many people come once in 2 years? So, one, if you can explain -- sorry, go ahead, sorry.
Yes, yes. So we do track our footfall, where people come from and how people use, different cohorts use the park. There are some opportunities, like I said, whereas in -- there are opportunities for us to grow in some markets. In some markets, they are already saturated, so we are not expecting growth in footfall. For example, Bengaluru Park for us is a high-performing park, and the base is so high that sometimes any small event can only lead to a decline in footfall because the park already is running at capacity most, at least Q1 especially.
So it's harder to figure out footfall growth, especially in Q1 or Q4 -- Q3. Q2 and Q4, this is actually -- we feel there is headroom to grow footfall. But again, these are exam seasons, and these are low seasons, Q2 being a monsoon season and Q4 is usually the exam season. So that also plays into the footfall. So it's hard to predict how that will -- thing affect footfalls. Every year, the story tends to be a little different. For us, the best way to mitigate this is to be in more locations and have always some projects in the pipeline.
Yes, yes. So are you -- keep tracking how many people come every year, how often the customer comes back and how much...
We have mostly people who come once a year only.
Okay. Yes, once a year, but once in -- how often they do repeat like? I understand it's not...
Most of our -- more than 50% of our customers, they have repeat maybe once in 2 or 3 years.
Okay. So long-term drivers of footfall, what do you think it's like, adding more -- because, let's say, you're saying Bengaluru is already at peak capacity, so when do you -- when will you think of adding capacity and trying to increase footfalls there? Are you not meeting the demand? I didn't -- so when will you take a call...
Yes. We are meeting the demand, but then because, see, the business tends to be seasonal, sometimes during the highest season, like there is not much headroom for us to grow footfall. We have to look at growing footfalls in the nonpeak seasons. But nonpeak seasons are nonpeak because of -- there are other hurdles like weather and exams and all that, which creates footfall barriers. So it's hard to kind of cut through that also, but we are always looking at new ways to see whether we can have, especially more group footfalls. We are slowly changing our strategy. And -- I will hand over to Dheeran, he can talk a little bit more about that.
So I think from a long-term standpoint, we see the tourism and the tour operator segment has a big opportunity that we can unlock. I think that's a channel segment that can give us growth in Q2 and Q4, something that Arun also was mentioning, we see as a seasonal business there is a downside, and we have capacity that we can't fulfill.
We are also doubling down on a lot of our marketing strategies, and you will actually see that in the coming year and the next 2 years. We're going big on digital. We are actually in a digital transformation journey of sorts, where we're actually tracking our entire customer journey. And giving them reasons to visit, we want to increase frequency for sure. We want to bring once in 2, 3 years down to maybe once in 6 months. And I think some of these strategies will definitely help us grow our footfall in the next 2 to 4 years. So the good news is that we understand the opportunities, and we understand the potential on the areas that we would want to grow at.
Meanwhile, you'll keep expanding the parks and keep doing these things and you get the growth when it comes, right? That's -- can we understand that way?
Yes, yes. See, I think, yes, because, see, growth in size -- expanding the size of the park is also not that easy because some of these parks are already pretty big, and we cannot grow them further without substantial investment. So we need to weigh that, the pros and cons of it. But yes, we do keep adding attractions. And also some of our parks are -- like Bengaluru and Kochi are now more than 15 years old, so some of the old rides -- we are replacing old rides with new. So even though we are investing in new rides, it may not add to the capacity because we are taking away some of the old rides and putting new instead of the old one. So there are multiple issues there. But eventually, yes, we can slowly increase the capacity of the park.
Till then, greater growth will be from locations, right? Can we take this...
More locations, I think, for us is an easier thing to do because there is also a latent demand in a lot of these cities, where there are no such avenues available currently.
Yes. That is why I was asking like how fast will you announce the new projects...
Yes. So I mean, we are doing it as fast as we can as you can already see. I mean we hope to open a new park every financial year. So in this financial year, we are already opening this one. Next financial year, we will have Chennai. And the year after that, hopefully, we will have something else to open as well.
The next question is from the line of Dhruvesh Sanghvi from Prospero Tree.
Can you explain how you have reorganized your teams considering -- I mean, we are seeing some hires, which has just not happened at the top, but at the mid-level also. And like how are you delegating because, of course, the work is going to increase and probably double up in the next 2, 3 years with new parks?
So the main change has happened. I think we are reorganizing the team because a couple of teams we have changed, reorganizing our sales team. And our marketing team is going through a bit of a reorganization because of the way we are also going through a digital transformation. Our IT team is also going through a substantial change. In fact, we have a new IT head who has joined. And so in the next 1 year, we will be investing, I think, about INR 4 crores to INR 5 crores in new tech for our parks. So those are some of the big areas. Also, because we are doing multiple projects at the same time, we are also beefing up our projects team to such a point that we can -- we are able to do 2 projects simultaneously. So this is the first time that we are attempting that. And hopefully, we will -- we already have 2 teams. But if the need be, we can also add more teams to this. So we're just waiting for maybe more signing so that we can start to work on this. But these are some of the -- so mainly marketing, sales, IT and new projects, these are the areas where you will see changes.
Sure. And the way you built the new park in 13 months that's like really amazing, not -- I mean it's very good to hear that. Can we expect something similar in terms of Chennai Park because that will be bigger, so...
Yes. No. Chennai Park is more than twice the size of Bhubaneswar Park, so it's not that easy. Also, the single window clearance, all those things that we have in Odisha is not available there. So things take a little bit more time. Also, the kind of machinery that we are importing, a lot of new machines are coming to Chennai, so those things have lead times. And as you know, there is also logistical delays in importing material from Europe and all that. So because of that, I don't see -- we may not be able -- 13 months is impossible for Chennai, but we hope to finish within 2 years.
Okay. And just one follow-up question related to the previous query. So considering that we have already reached an optimal capacity of Bengaluru, let's say, then the question that I think Vivek was asking...
Sir, I'm sorry to interrupt, sir, I would request you to kindly rejoin the queue for follow-up questions, please.
I was continuing one question, if you may allow.
Okay, sir, please go ahead.
Yes. So the query was about the -- let's say, if we have 10 lakhs people coming in our Bengaluru Park, to materially improve it to, let's say, 50% growth over 7, 8 years, we will have to have capacity increases. And we know that we are at optimal capacity. We have the cash flows, then why are we not taking the call to probably invest and add the capacities in the same area, if you can probably reanswer the same question.
So there are a couple of issues there. One is the park is old. So the lot of investment that we are doing is replacing old machinery, okay? So when we replace old machinery, the capacity does not improve. We are still incurring CapEx, but the capacity may not change, okay? And also for a meaningful capacity change, actually, large areas have to be included into the park. So we don't do it like that. We usually add 1 or 2 rides per year and things like that. So over a period of time, yes, you will see, like, for example, now Bengaluru Park is comfortably holding 11 to 12 lakh visitors per year, which was a struggle maybe 3, 4, 5 years back, now that is not there. So slowly, it will change, but it's not going to be a drastic thing because that means we'll have to invest heavily. And we are not sure whether it makes sense to do that. That's all.
[Operator Instructions] The next question is from the line of Saurabh Jain from HDFC Life Insurance Company Limited.
I just had a bookkeeping question. So in terms of the drivers of growth of revenue, so basically, footfalls into ARPU should be your revenue, right, for a particular park?
Yes.
So my question is on the -- basically selective park. So basically, Bengaluru, Slide #7, if you see, quarter 4, your footfalls degrowth was 10%, ARPU rose by 14%, but still the revenue decline is 13%. So was there any one-off in the base quarter? Or why the numbers are not adding up?
I think Saji will answer that.
Yes. This is mainly because we had certain other income in the -- all the parks where we have reversed some of the transitional credit of service tax, which has been provided in the books in the year of 2017-'18, which has got a favorable order from the department and which got reversed in the books of accounts in the current year, which resulted in somewhere close to INR 9 crores of reversal in the other income in the current quarter as compared to the previous year, that's why. That's why the number is not tallying up. Bengaluru, if you only see the operational revenue, there is about some 3% of Y-o-Y basis growth is available. On an overall basis for the quarter, we have about somewhere close to 1% year-on-year growth is available across all the parks plus resorts.
The next question is from the line of Meet Jagani from Jagani Investments.
My first question is just a follow-up of the question asked by the previous participant. You said in the existing park we replaced some of the old machineries or rides with new ones. So what will be the amount of maintenance CapEx that we would be doing in a year, particular year, ad hoc figure any?
We typically spend 10% of our top line from a particular park as we earmark with and keep it for adding new rides to the park.
New rides to the existing park, right?
Yes, yes. Yes.
Okay. And there is a rise in employee expense this quarter. Is it to do with the Bhubaneswar park?
Yes.
No. Bhubaneswar Park is getting capitalized for the time being, so the salary cost increase is mainly due to 2 reasons. There is actually 16% salary revision, 16% revision in the salary cost as compared to the previous year. And at the same time, we had a headcount increase for this quarter as well as for the year. There was about some 16 number has added to the corporate team in the current year and even to the parks as well. And then 38 numbers have been added during the full year. So mostly these are the 2 changes, 2 drivers, which costed us increase in our salary cost. And apart from that, from February onwards, we are accounting the ESOP expense. The company has granted ESOP to some of the senior employees. So the ESOP expenses are also getting accounted in the -- started from the current quarter, which is about some INR 1.3 crores in the current FY.
The next question is from the line of Kanika Gupta from [ SG Investments ].
Am I audible?
Yes.
Yes, ma'am.
So I just had 2 questions. So first one is that I can see the dip in the margin of 28% quarter-on-quarter. I just wanted to ask like is this margin dip is sustainable, like till when we are hoping to see this decline in margin, like what are your viewpoints on that, EBITDA margin?
Saji, you can take that.
Yes. EBITDA margin in the current quarter, the decrease is mainly because of 2, 3 reasons. One is the salary revision and salary change, which I already explained because of the new addition to the team as soon as 16% of revision in the salary rate in the current FY as compared to the previous year, so which costed us about somewhere close to INR 4.5 crore, INR 4.3 crores for the current quarter.
And at the same time, the operating expenses, in that we have about the overall employees, where we have added about some 110 employees for the quarter and then 130 employees for the financial year. And then there is a rate increase of about some 21% for the FY. And then rest of the things are related to the revision in the -- sorry, 19% and 21% is the total wage increase, out of which 12% is due to the rate revision. These are 2 reasons. Apart from that, in the previous year, we had about INR 9 crores of service tax transitional credit reversal in Q4 of last FY. And this year, that particular reversal is not available, which has resulted in a reduction in our other income of about INR 9 crores in the current FY. So consolidatedly, these are the 2, 3 reasons which resulted in EBITDA shrinkage. And to add to that, then there is a little reduction in the footfall as well.
Okay. So is that sustainable, like in for FY '25? Is there anything can you just provide us that the debt will be there coming years as well?
Sorry, I couldn't hear you properly. Could you please be a little louder?
Okay. I am saying that the dip, which we are seeing in this quarter, are we expecting in the future year, like in FY '25 as well?
There could be because currently in the next FY, we are adding some of the -- I mean, Bhubaneswar Park into our kitty. There could be some little shrinkage in the margin -- shrink in the margin percentage of about some 3% to 4%. Apart from that, we are not overseeing -- we are not seeing any change in the operational margin levels.
Next question is about the Wonderla Resorts. As I could see that there is a decline in the occupancy despite there is a [indiscernible] increase and the average room rental has also been increased. Sir, could you please explain or tell us why the occupancy has been declining in the resort business as well?
So the previous year, we had long-stay customers, guests who were there at the resort. And then the current year -- this is mainly because of some of the industrial units next to our park, which is a bit of the industrial area and which was the major source of our resort occupancy. For the current year, there were no major long stays. So that's the reason why the occupancy has reduced from 30% to 55% in the current FY.
The next question is from the line of Naman Shah from Monarch Networth Capital.
Congratulations for the Bhubaneswar Park. I just had one question. I just wanted to understand on the CapEx spend for the Chennai park and total amount of CapEx you are planning to spend.
The Chennai Park, we had a budgeted expense of -- revised budgeted expense of somewhere close to INR 515 crores. And including the orders what we committed, we have about INR 194 crores has been committed or paid during the -- till 31st of March 2024. And then Odisha Park, we had a budget of about INR 189 crores, and we are at the last leg of completing it. So probably, we'll be finishing it out maybe around INR 190 crores.
The next question is from the line of Mukul Jain, an Individual Investor.
And congratulations on the Odisha Park. Basically, you started 1 quarter earlier than the guidance. Particular question on the Odisha Park basically. So since the park is now starting, you would have estimated the amount of expenses which you're going to incur, like the employee cost, the lease which you are going to pay and all sorts of that. So can you please give a rough figure about that on an annual basis?
Saji?
Sorry, I couldn't hear you properly. Maybe a little -- I'm not getting -- able to hear you clearly.
Sir, may I request to kindly use your handset, Mr. Jain?
Yes, I am on handset. Am I audible now properly?
Okay, sir. Please continue.
Yes, yes.
Yes. So basically, Odisha Park you are about to start and you have -- you would have projected all the employee costs, the lease outflow, which you have to spend and the other expenses. So can you guide the internal estimate about your numbers for this park?
So because it being a new park, I would not be able to give you a guidance on that, but the lease payments are like one-time payment, which we've already included in our project cost, which was about somewhere close to INR 6 crores. And then the major drivers is like our salary cost, off-roll as well as the on-roll. The on-roll cost figure could be somewhere close to 10% to 12% hike from the person level by -- after -- once we include Bhubaneswar Park into the kitty.
And then, for the off-roll, we will be having about some 300-plus employees on a monthly basis. And the per person, the salary could be about INR 22,000 to INR 25,000 per month. And then we are -- as projections and as being a new park, we are expecting almost like a breakeven from the current year of operations, and then, maybe we'll be -- or maybe a single-digit EBITDA in the current FY. And maybe from the next year onwards, then we would be able to generate the enough EBITDA as well as for the PAT levels.
Sir, the participant has left the queue. We will move on to the next question, which is from the line of Angad Katdare from Sameeksha Capital.
I just have a follow-up question on the Chennai Park CapEx. You mentioned the revised CapEx is INR 515 crores. If I recall, it was around INR 350 crores. Can you just provide a breakup of the revised CapEx? And how much of it is spent? And does it include the land cost as well?
Yes, it includes the land cost. Initially, we budgeted with a lesser number of rides for Chennai Park. And later on, the number of rides has been revised. That's why the cost has increased by -- in these 2, INR 515 crores. So we already spent about some INR 194 crores so far in the project, including the orders what we have committed.
The next question is from the line of Sunil Shah from SRE PMS.
Sir, just to understand, if I'm looking from next 5 years, 7 years point of view, what really should be done so that our footfalls, which are like about 35 lakhs can go up to, say, 1 crore or so? So on one side we are having mature parks wherein we are talking about low single-digit growth. So obviously, the growth journey is going to be from new parks. And in the new park, this year, we'll be having Bhubaneswar, next year we will be having Chennai, post which we are planning Gujarat and Punjab, UP, MP, all those kind of things. Sir, what about religious tourism? That has got a great potential. Are we planning anything for that segment, those areas, and put up theme parks in that locality, those vicinity where actually the footfalls can be much, much higher? So any thought, any direction, anything on that, if you could think or if you could share something on those lines?
Yes. Religious tourism may have high footfall, but I think your ARPU will be very low. So if you look at the parks which are around religious tourism, I think their ARPUs tend to be very, very low, maybe in -- not even in triple digits, so that's the only issue. We are in the business of running large format amusement park, so we want to stick to that. We have been invited by various state governments, like, for example, UP to do something in Ayodhya, but we're still waiting for the -- it to be a little more developed, and then, maybe we can do something there. But other than we want to focus on metros where we have larger populations living and we want to be a regional theme park in that sense, right? So because of that, I think we need a huge catchment population like, for example, in Bengaluru, Kochi, Hyderabad. These are huge catchments, so like even after 20 years, we are still getting footfalls. There is no issue in terms of catchment. So that's the way we are looking at it. And we are currently in only 4 cities. There is a lot of cities that we want to cover. So that will be the strategy then for us that we're going to be taking.
Okay. So then 2 points, sir. One is we are looking at rolling out at least one theme park every year from here for the next 4, 5 years, every 13 months or so. And the second point is...
Roughly one every year or one every 1.5 years, we should be able to start a new park.
Sure. And sir, this would be all internally funded because when you're doing the Chennai Park, we -- that's a huge fund flow, more than INR 500 crores. So going forward...
We will be looking at some fundraise, some amount of debt. And depending on how many projects we sign in the next year or so, we'll take a call on that. We'll be definitely doing some fundraise in the form of either debt or equity or most likely a combination of both.
Okay. But sir, once Chennai is rolled out, again, when the cash flows from there would help us to, again, come back to our original level of main net debt-free company kind of a thing. Was the rollout a problem?
Yes, yes. I think we will not have too much debt. We don't need -- because our -- all our assets will be EBITDA positive at any given point, so we will not see a huge cash burn at any point. Only the thing is the investments -- new projects, especially large projects, the investment needs to be covered.
Okay. Sir, one last point. We have clarity on Bhubaneswar and Chennai. Any indication on the other projects post those Chennai rollout...
We will let you know whenever we sign. We are not -- we are close to doing a couple of deals, but whenever it's ready, we will let you know.
Ladies and gentlemen, this will be the last question for today, which is from the line of Arul Selvan from Independent Advisors Private Limited.
Can you hear me?
Yes, sir.
I just had a couple of questions. One was with respect to your useful life assumptions for the Odisha Park. Just wanted to understand what would be your thought process on it.
Generally for the...
For the rides?
No, just for the general -- yes, so general parks. I mean, how much kind of depreciation? How would you going to look at...
Park useful life is -- yes, yes, Saji, you can answer it.
Yes, asset side for the plant and machinery, like these rides and things like that, we are depreciating over a period of 10 years.
Okay. And with respect to your mature parks, with respect to Bengaluru and -- which I am guessing that most of them would have been already heavily depreciated, right? There's no change in that.
Yes, there's a common policy which we are following from the beginning. So there is no change in that. All the parks -- across the parks, we are using the same thing.
Okay. So that's one. Another question I wanted to ask is like just from a qualitative perspective, how different are each of your parks? I mean if someone goes to, let's say, Kochi or Bengaluru, understanding -- what would be the variation in their experience if they come to, let's say, a different newer park like Bhubaneswar versus the older parks?
Yes, they are all different. They are not the same. They have commonalities in terms of some rides. They have common rides. But the experience is different. They are not the same. They're all different, especially Bhubaneswar is completely different from everything else we have done. In fact, there are no -- hardly any common rides with the other parks. Chennai will also be a completely different park. We will not have any -- too many common rides. Of course, some, like, for example, our iconic SkyWheel and some giant wheel, some rides will be -- some water slides, all that will be common, but some of the other hero rides will be different.
Okay. So the Chennai ride will also be very -- Chennai Park will also be very different from the different parks as well, right?
They're all different. Now, going forward, all our parks are going to be different.
Okay. And the last question I have is actually kind of a follow-up from a previous question. This is with regards to the reinvestment that you will have to be putting in your parks. I think the last thing you said that it's 10% of the top line from each park. Am I right?
Yes.
Would that be different for, let's say, the newer parks like Hyderabad and Bhubaneswar versus the more mature ones?
No, they'll all be -- over a period of time, they'll all be around the same. It's not different.
Right. But then I mean I was just thinking that with Bhubaneswar, especially, now that you are just starting that, how long would it be before you have to actually start putting up newer rides in Bhubaneswar?
It's hard to say, but we might have to start putting rides in quickly if the crowd is huge. We are already sold out for the opening weekend of Bhubaneswar. So I think it's going to start strong. So depending on the response we receive, we will have to add quickly or not so quickly. We'll have to take a call later.
Okay. So higher the response the faster the replacement?
Yes, yes.
As that was the last question for today, I would now like to hand the conference over to the management for closing comments. Over to you, sir.
Thank you all for joining Wonderla Holidays' Q4 FY '24 Conference Call. And we are happy with your -- that you have shown commitment to our company and our growth. We expect to deliver better numbers and growth going forward. We are bullish on this segment. And we are looking forward to creating new adventure and amusement spaces for our Indian customers. With this, I would like to conclude. Thank you.
Thank you members of the management. Ladies and gentlemen, on behalf of Monarch Networth Capital, that concludes this conference. We thank you for joining us, and you may now disconnect your lines.
Thank you.