Future growth expectations in sales/revenue/volumes?

FY25 is expected to be strong, especially Q1 and Q2, as all 17 properties become operational. Tourism industry is seasonally impacted; Q1 is traditionally weak but some properties like Daman and Diu perform well in Q1. By March 2025, full effect of 15-17 projects will contribute significantly to revenue. Future expansions likely to be partly funded by cash flow from operations starting FY25. Vision 27 aims for 50 resorts across India by 2027, with an average addition of 10 resorts per year post FY25. Occupancy rates and Average Room Rates (ARR) expected to increase steadily, boosting revenues.

Any current/future new fundraising through debt or equity?

The company has issued 2 preferential allotments recently, with promoters participating in the first two preferential issues, and the rest involving close groups to promoters who are in different businesses (Page 18). Future expansions will be partly funded by cash flow from operations starting FY25, with full effect of 15-17 projects coming into the business by March 2025 (Page 19). No explicit mention of new debt fundraising in the provided pages. The company is focusing on operational cash flows from the new properties and preferential allotments to support funding future expansions (Page 1

Any current/future capex/capital investment/strategic investment?

Praveg is undertaking significant expansion with 17 resorts expected to be operational by FY25 and a vision to reach 50 resorts by 2027. They are capitalizing costs related to new projects including direct manpower and production expenses. Corporate overhead costs such as call center, administration, HR, IT, and senior management are increasing to support growth. Plans to acquire banquet spaces to cater to destination weddings are in progress. The company is exploring opportunities in Africa (Kenya, Tanzania) and possibly overseas for experiential hospitality. Focus on strategic acquisitions i

Future growth expectations in earnings/operating earnings/profits/EPS?

FY25 expected to be strong with full operation of 17 properties, boosting revenues. Occupancy ratios improving annually by 3-4%, leading to 10-15% growth in existing inventory revenue. Event and exhibition segment capped at Rs. 60-70 crores, with focus shifting to higher EBITDA hospitality segment. Hospitality EBITDA margins target around 40-50%, improving with higher occupancy. Future expansions to be partly funded from operating cash flows of new properties. Payback period for investments roughly 2.5-3 years, supported by high EBITDA margins. Operating costs as a percentage of ARR expected t

Current/ Expected Orderbook/ Pending Orders?

Praveg Limited is working on operationalizing 17 resorts by the end of March 2024. There is a vision to expand to 50 resorts by 2027. Efforts are ongoing to acquire an additional 10 resorts in the next 9 months after March 2024. The company has plans for another 10 projects annually beyond the 17 resorts, continuing the expansion journey. The pipeline includes acquisitions, accreditations, and tender proposals to meet these targets. The management indicated the capability to handle new projects yearly, with a strategic approach to acquisitions in premium locations. New projects are currently u

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Praveg LtdQ2 FY23Leisure Services

Praveg Ltd Q2 FY23 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹252Market Cap: ₹680 CrSector: Leisure Services

Management growth scorecard

Revenue

Category 1

Margin

Category 3

Fundraise

Yes

Order

Yes

Capex

Yes

4 of 5 growth signals are positive — a strong management growth story.

Full analysis

Revenue guidance

Category 1

→FY25 is expected to be strong, especially Q1 and Q2, as all 17 properties become operational.
→Tourism industry is seasonally impacted; Q1 is traditionally weak but some properties like Daman and Diu perform well in Q1.
→By March 2025, full effect of 15-17 projects will contribute significantly to revenue.
→Future expansions likely to be partly funded by cash flow from operations starting FY25.
→Vision 27 aims for 50 resorts across India by 2027, with an average addition of 10 resorts per year post FY25.
→Occupancy rates and Average Room Rates (ARR) expected to increase steadily, boosting revenues.
→Event and exhibitions business capped at Rs. 60-70 crores annually, with focus shifting more towards higher-margin hospitality revenue.
→Strategic acquisitions and creativity in hospitality offerings expected to drive continued revenue growth.

Margin guidance

Category 3

→FY25 expected to be strong with full operation of 17 properties, boosting revenues.
→Occupancy ratios improving annually by 3-4%, leading to 10-15% growth in existing inventory revenue.
→Event and exhibition segment capped at Rs. 60-70 crores, with focus shifting to higher EBITDA hospitality segment.
→Hospitality EBITDA margins target around 40-50%, improving with higher occupancy.
→Future expansions to be partly funded from operating cash flows of new properties.
→Payback period for investments roughly 2.5-3 years, supported by high EBITDA margins.
→Operating costs as a percentage of ARR expected to streamline and decrease as occupancy rises.
→Aggressive acquisition and creative property development to sustain revenue growth.
→By FY27, aiming for a portfolio of 50 resorts, generating significantly higher earnings and profitability.
→Cost increases in Q1 due to transition to professional management expected to normalize as projects scale.

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Fundraise plans

Yes

→The company has issued 2 preferential allotments recently, with promoters participating in the first two preferential issues, and the rest involving close groups to promoters who are in different businesses (Page 18).
→Future expansions will be partly funded by cash flow from operations starting FY25, with full effect of 15-17 projects coming into the business by March 2025 (Page 19).
→No explicit mention of new debt fundraising in the provided pages.
→The company is focusing on operational cash flows from the new properties and preferential allotments to support funding future expansions (Page 19).

Order book

Yes

→Praveg Limited is working on operationalizing 17 resorts by the end of March 2024.
→There is a vision to expand to 50 resorts by 2027.
→Efforts are ongoing to acquire an additional 10 resorts in the next 9 months after March 2024.
→The company has plans for another 10 projects annually beyond the 17 resorts, continuing the expansion journey.
→The pipeline includes acquisitions, accreditations, and tender proposals to meet these targets.
→The management indicated the capability to handle new projects yearly, with a strategic approach to acquisitions in premium locations.
→New projects are currently under development and expected to enhance revenue streams progressively.
→Overall, they are gearing up for a large scale expansion with a focus on experiential hospitality and theme parks.

Capex plans

Yes

→Praveg is undertaking significant expansion with 17 resorts expected to be operational by FY25 and a vision to reach 50 resorts by 2027.
→They are capitalizing costs related to new projects including direct manpower and production expenses.
→Corporate overhead costs such as call center, administration, HR, IT, and senior management are increasing to support growth.
→Plans to acquire banquet spaces to cater to destination weddings are in progress.
→The company is exploring opportunities in Africa (Kenya, Tanzania) and possibly overseas for experiential hospitality.
→Focus on strategic acquisitions in prime locations, sometimes accepting higher rent to secure valuable sites.
→Investments in own food and beverage teams to replace outsourcing.
→Future years will see about 10 new resort projects annually to sustain growth.
→Building internal capabilities and infrastructure to handle large scale multi-resort operations and expansions.
→Potential acquisitions of banquet halls to tap into wedding business opportunities.

How does Praveg Ltd rank vs peers in Leisure Services?

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