Praveg LtdQ1 FY25Leisure Services

Praveg Ltd

Q1 FY25 Earnings Call Analysis

Management growth scorecard

Revenue

Category 1

Margin

Category 2

Fundraise

Order

Yes

Capex

Yes

3 of 5 growth signals are positive.

Revenue guidance

Category 1

→Praveg Limited plans to expand from approx. 770 rooms currently to over 2,500 rooms by Vision 2028, targeting 55 to 65 locations.
→The company aims to increase inventory by about 50% annually, adding around 505 rooms in the coming year.
→New resorts under development include Serengeti, Thinnakara-II (200 rooms), Kashid, Kihim, and Jaisalmer, expected to become operational soon, contributing significant incremental revenues.
→Revenue growth is expected as newly operational resorts mature, with marketing and branding efforts expected to improve occupancy and ARR within 6-12 months of opening.
→The smart toilets and outdoor advertising vertical is set to deliver significant revenue growth, with potential incremental revenue increasing 80-90% year-over-year.
→Event and wedding business, especially in Kevadiya, is expected to contribute a "tremendous incremental" revenue boost this year.
→Overall, EBITDA margins are projected to improve beyond the current ~34-35% as newer resorts stabilize.

Category 2

→Praveg Limited reported robust growth in FY ‘25 with consolidated total income of Rs. 174.43 crores, EBITDA of Rs. 56.88 crores, and net profit of Rs. 16.13 crores.
→EPS for FY ‘25 on a consolidated basis was Rs. 5.96, up slightly from Rs. 5.78 last year.
→The company targets an average EBITDA margin of around 40% over project periods, expecting incremental improvement in FY ‘26 as newer resorts mature.
→Expansion plans include operationalizing 25 resorts by FY ‘26 with room inventory potentially increasing to 1,250-1,300 rooms.
→New properties usually take 6-12 months to build ARR and occupancy; margins and revenue expected to improve with time.
→The advertising and smart toilets verticals have strong growth potential, contributing up to 80-90% incremental revenue growth in initial years.
→Strategic partnerships (with IHCL and Mahindra) and international projects like Serengeti aim to boost profitability further.
→Overall, Praveg is optimistic about steady revenue, EBITDA, and net profit growth aligned with Vision 2028 targets.

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→Praveg Limited is currently a debt-free company and does not plan to raise any debt as per their strategy.
→For funding CAPEX and expansion, the company plans to utilize its existing resources including funds from warrants.
→They are also exploring a unique development plus operation model where they develop and operate resorts on land owned by investors, requiring zero CAPEX from Praveg.
→This "operation and development" model allows revenue generation from property development without the need for raising additional equity or preference share capital.
→Overall, no immediate plans to raise funds through debt or equity were indicated; funding will come from internal accruals, warrants, and innovative partnership models.

Yes

→Praveg Limited has several resorts under development, with 505 upcoming rooms expected to be operational in the current year.
→Specific projects under progress include Serengeti (25 rooms, already working under development), Thinnakara-II (200 rooms), Kashid and Kihim (around 35 to 40 rooms each), and Jaisalmer (40 to 50 rooms nearing approval).
→Bangaram resort is already operational (50 rooms given to Indian Hotels as of January 2025).
→The company expects to operate around 25 resorts by the end of the year.
→They have plans to build 5 to 10 new resorts this year.
→Potential acquisitions of ready or underdeveloped properties are also being considered to expand the pipeline.
→International projects include the Serengeti project with environment clearance received and ongoing development.
→Expansion at Masai Mara is also in progress for additional resort locations.

Yes

→Current CAPEX: Approximately Rs. 30-40 crores planned to complete work-in-progress on 4-5 resorts.
→Rs. 100 crores CAPEX to convert work-in-progress at Thinnakara (200 rooms) into developed assets this year.
→Future CAPEX funding primarily through existing resources, including warrants and promoter/fund contribution if required; company is debt-free and prefers no new debt.
→Strategic "Development plus Operation" model initiated: Praveg partners with landowners who invest in development; Praveg provides turnkey development and operates properties with no CAPEX burden on itself.
→This model is expected to contribute significantly to revenue and profit soon without requiring fresh capital from Praveg.
→Planned development and operation of 5-10 resorts this year; approvals and work ongoing on multiple projects including Serengeti, Kashid, Kihim, Jaisalmer, and Lakshadweep.
→Expansion in outdoor advertising/media with zero CAPEX smart toilet projects generating recurring revenue.

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