Any current/future new fundraising through debt or equity?

For funding the expansion from 200 rooms to 1000 rooms, Praveg Limited has already acquired funds for 15 resorts. For the additional 21 resorts, funding is needed for six resorts. The company plans to source the required funds for these six resorts primarily from the promoter group, if needed. There was no specific mention of raising funds through public equity or debt markets in the provided transcript. The focus appears to be on internal or promoter funding to support near-term resort expansion.

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

Praveg has acquired funds for 15 resorts; funding for 6 more resorts is planned, potentially through promoter group investment. The company is focused on expanding from 200 rooms to 1000 rooms by FY 2025. Land acquisitions are ongoing, including a significant parcel of around 50,000 sq.m. at Vela Madar for developing luxury wildlife resorts. New resorts are being developed across strategic locations including Dholavira, Vaitarna, Udaipur, Jawai, Velavadar, and others with a combined capacity of over 320 rooms. The acquisition of five-star hotels (Eulogia SB Road and Grand Eulogia in Ahmedabad)

Future growth expectations in sales/revenue/volumes?

Praveg aims to operate 50-60 resorts by 2028, expanding from current numbers. Target occupancy for 19-20 resorts by March FY'25 is around 50%, with some variation expected. EBITDA margin expected above 15-20% for new projects, though FY'24 margins may be stressed due to overheads. Expansion plan includes increasing rooms from 200 to 1,000, with funding partly from promoters. Events and exhibition business is being scaled strategically; current focus on tenders and government projects with an emphasis on opportunities yielding good EBITDA margins. Seasonal trends: better business expe

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

Praveg aims to operationalize 19-20 resorts by March FY25, targeting an average occupancy of around 50%. EBITDA margin for FY25 is expected to improve but FY24 margins may be stressed due to extraordinary overheads on existing resorts. Plans to increase total resorts to 50-60 by 2028, with 25-40% owned resorts and 40% on private land, supporting sustainable growth. Significant capital expenditures have led to a 68.5% YoY rise in depreciation/amortization in Q2 FY24, impacting short-term profits. Overhead costs will be absorbed as resort count reaches 15-20, improving profitability metr

Current/ Expected Orderbook/ Pending Orders?

Praveg Limited has received work orders for the development, operation, and management of Tent City resorts at multiple locations including Kihim (Maharashtra), Kachigam, Daman, Tent City, and Nagoa Beach, Diu. Upcoming resort projects include Ghoghla Beach, Ayodhya, Velavadar, Udaipur, Jawai, Adalaj, Nagoa Beach, Kachigam, Daman, Tent City Maharashtra, and Ranthambore, with a combined room capacity exceeding 320 rooms. Currently, operations have started at TentCity Chakratirth Beach in Diu and TentCity Jampore Beach in Daman since August. They have plans of managing 19 to 20 resorts by

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Praveg LtdQ3 FY23Leisure Services

Praveg Ltd Q3 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 2

Margin

Category 4

Fundraise

Yes

Order

Yes

Capex

Yes

3 of 5 growth signals are positive.

Full analysis

Revenue guidance

Category 2

→Praveg aims to operate 50-60 resorts by 2028, expanding from current numbers.
→Target occupancy for 19-20 resorts by March FY'25 is around 50%, with some variation expected.
→EBITDA margin expected above 15-20% for new projects, though FY'24 margins may be stressed due to overheads.
→Expansion plan includes increasing rooms from 200 to 1,000, with funding partly from promoters.
→Events and exhibition business is being scaled strategically; current focus on tenders and government projects with an emphasis on opportunities yielding good EBITDA margins.
→Seasonal trends: better business expected in Q3 and Q4; new tent city resorts aim for full-year operations.
→Long term strategy includes 40% owned resorts, balance in PPP or leased models, aiming to diversify geographically with no more than 20% of resorts in any single state.
→Optimism for revenue growth fueled by hospitality projects and events business expansion despite recent income dip.

Margin guidance

Category 4

→Praveg aims to operationalize 19-20 resorts by March FY25, targeting an average occupancy of around 50%.
→EBITDA margin for FY25 is expected to improve but FY24 margins may be stressed due to extraordinary overheads on existing resorts.
→Plans to increase total resorts to 50-60 by 2028, with 25-40% owned resorts and 40% on private land, supporting sustainable growth.
→Significant capital expenditures have led to a 68.5% YoY rise in depreciation/amortization in Q2 FY24, impacting short-term profits.
→Overhead costs will be absorbed as resort count reaches 15-20, improving profitability metrics thereafter.
→Strategic expansion in events, exhibitions, and hospitality sectors are expected to create synergy and drive future earnings.
→Recruitment to strengthen the professional team is underway, aimed at operational and financial performance enhancement.
→Overall, management expresses optimism for sustained growth and profitability improvements in H2 FY24 and beyond.

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Fundraise plans

Yes

→For funding the expansion from 200 rooms to 1000 rooms, Praveg Limited has already acquired funds for 15 resorts.
→For the additional 21 resorts, funding is needed for six resorts.
→The company plans to source the required funds for these six resorts primarily from the promoter group, if needed.
→There was no specific mention of raising funds through public equity or debt markets in the provided transcript.
→The focus appears to be on internal or promoter funding to support near-term resort expansion.

Order book

Yes

→Praveg Limited has received work orders for the development, operation, and management of Tent City resorts at multiple locations including Kihim (Maharashtra), Kachigam, Daman, Tent City, and Nagoa Beach, Diu.
→Upcoming resort projects include Ghoghla Beach, Ayodhya, Velavadar, Udaipur, Jawai, Adalaj, Nagoa Beach, Kachigam, Daman, Tent City Maharashtra, and Ranthambore, with a combined room capacity exceeding 320 rooms.
→Currently, operations have started at TentCity Chakratirth Beach in Diu and TentCity Jampore Beach in Daman since August.
→They have plans of managing 19 to 20 resorts by March FY 2025, expanding room capacity from 200 to 1,000 rooms.
→For 15 resorts, funding is already acquired; promoter group investment is planned for funding six more resorts.
→The tender department actively applies for government tenders across India, aiming for reasonable EBITDA margins before executing projects.

Capex plans

Yes

→Praveg has acquired funds for 15 resorts; funding for 6 more resorts is planned, potentially through promoter group investment.
→The company is focused on expanding from 200 rooms to 1000 rooms by FY 2025.
→Land acquisitions are ongoing, including a significant parcel of around 50,000 sq.m. at Vela Madar for developing luxury wildlife resorts.
→New resorts are being developed across strategic locations including Dholavira, Vaitarna, Udaipur, Jawai, Velavadar, and others with a combined capacity of over 320 rooms.
→The acquisition of five-star hotels (Eulogia SB Road and Grand Eulogia in Ahmedabad) is part of the strategic investment for manpower and business synergy.
→The company aims to maintain a light asset model, focusing on long-term leases and PPP models with selective direct ownership.
→Capex involves semi-permanent to permanent structures costing INR 40 lakhs to 1 crore per room.
→ERP and administrative upgrades are part of ongoing investments for operational efficiency.

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