In conversation with Jai Malpani, Managing Director of Imagicaaworld Entertainment Limited
With the addition of new rides and attractions at our Water Park and Theme Park, we expect to see an increase in footfalls, states Jai Malpani, Managing Director of Imagicaaworld Entertainment Limited.
In Q1FY24, the company’s revenue surged by 12.90 per cent from Q1FY23, while the net profit zoomed by 10 per cent from last year’s same quarter. What were the contributing factors to the company’s performance?
Imagicaa’s impressive performance in Q1FY24 can be attributed to several key factors like increased footfalls, prudent cost management, and strategic collaborations were instrumental in the company's impressive. The launch of Aquamagicaa Water Park in Surat has added to the performance. Our business is seasonal in nature, we generally have 40 per cent of revenues coming in the first quarter. Hence, we need to tap on the same and set the tone for the financial year. The boost in footfall can also be attributed to effective marketing campaigns and improved customer experiences.
Additionally, we were able to lower our operational costs, resulting in a stellar 52 per cent EBITDA margin. Cost-conscious initiatives included efficient resource allocation, improved supply chain management, and prudent financial planning.
What factors might serve as the primary drivers of growth for the company in the upcoming quarters? Additionally, are there any potential acquisition strategies being considered by the company in the near future?
The key drivers of growth in the upcoming quarters for Imagicaa are:
a) Expanding our portfolio of attractions and experiences. Currently we are adding 6 new rides in our Water park at Khopoli.
b) We are also adding a fully air-conditioned banquet in Water Park with a capacity to accommodate 1,500 people.
c) Both these initiatives will increase our daily capacity from the current 6,500 to 8,500 Visitors.
d) At our Theme Park, we are in the process of adding a world-class Light and Fountain Show in the evening which will improve F&B and Retail consumption thereby boosting non-ticketing revenues. Regarding the potential acquisition, we recently did an acquisition of a water park in Surat this March and we are happy to say it has received an overwhelming response in Q1.
We are actively considering opportunities that align with our long-term goals and looking to open new parks in tier 1 and 2 cities.
Can you shed some light on the company’s debt reduction plan?
Our debt Resolution plan is complete, we recently carried out a write-back of Rs 572 crore worth of debt from our books which was the last part of the resolution plan. We now have a clean balance sheet with no debt(Rs 213 crore of remaining OCRPS would get converted into equity in April-May 2024). With this completion of the resolution plan, we now aim to resume our journey towards growth and achieve our goal of becoming the biggest entertainment company in India.
What is your outlook on Indian theme parks as compared to the global theme parks, for the next few quarters?
The Indian Theme Park industry is still at a very nascent stage. But it has huge growth potential due to its strong demographics which are very favourable for this industry to thrive. With India’s per capita income going upwards and young population, discretionary spending is rising adding to India’s infrastructure boom and government policies favouring to make India a tourism hub, the Industry is bound to grow multi-fold in the coming years.
Global theme parks have a higher share of revenues coming in from non-ticking avenues such as F&B and Retail compared to ticketing revenues. The ratio of ticketing vs non-ticketing is 50:50 for global theme parks. While it is the opposite for India, we have around 75 per cent of revenues coming in from ticket sales.
We at Imagicaa have the added advantage of having in-house F&B and exclusive merchandise which you won’t find in any other park in India. We look to leverage our strength and look to increase our share of our non-ticketing revenues to 40 per cent.
Could you shed some light on the segment-wise revenue breakup, and how do you expect it to evolve in the next few quarters?
Our revenues from ticketing sales stood at 68 per cent, F&B sales made up 18 per cent and Retail Merchandise sales made up 7 per cent and the rest 7 per cent from other sources such as parking and locker fees. Our footfalls increased by 13 per cent YoY to 5,56,023 and ARPU stood at Rs 1,548. For the coming quarters, we will continue to enhance our non-ticketing revenues. With the addition of new rides and attractions at our Water Park and Theme Park, we expect to see an increase in footfalls. While we haven’t taken any significant price hikes, there is still a lot of room left for us to boost our ARPU. We look forward to taking price hikes gradually depending on the season and demand.
Can you shed some light on the capex plans?
We are doing capex at both our parks in Khopoli. Currently, we are adding 6 new rides in our Water park at Khopoli which will increase our daily capacity currently of 6,500 footfalls to 8,500 footfalls. We are also adding a fully air-conditioned banquet in Water Park with a capacity to accommodate 1,500 people. Adding parking space next to the water park and expanding our admissions’ entry area.
At our Theme Park, we are adding a world-class light and fountain show for visitors, which will be in the evening, specially aimed to increase the dwell time of our guests, resulting in increased F&B and retail spending. We are also setting up an 8 MW captive solar plant which would reduce our power cost considerably.
Can you provide insights into the company's expansion into new geographical regions, apart from Maharashtra and Gujarat?
Our goal is to become the number 1 entertainment destination in India in the coming years, and as a part of the same, we are actively looking for expansion in newer geographies, especially tier 1 and tier 2 cities. Our primary focus is on the western and northern regions. However, we also have received interest from eastern and southern regions which we are evaluating. We are looking at setting up two new parks in the next two years. We are looking to set up medium-sized parks with a combination of both Wet and Dry rides depending on the demographics of the city.
Can you provide us with information about the company's wind and solar projects and explain how these initiatives will be advantageous for the company?
As part of our clean energy and ESG initiatives, we are setting up an 8MW captive solar plant in Osmanabad, Maharashtra. We see that the government coming out with more regulations and reporting relating to ESG like the BRSR reporting, ESG scores and ratings etc. With this, we are moving to a cleaner power utilization. This will also help us reduce our power cost considerably, which is one of our biggest expenses.
At the moment, what are your top 3 strategic priorities?
Our top three strategic priorities at the moment would be further
- Enhancing Visitor Experience: We are committed to continuously improving the quality of our attractions and services to ensure an exceptional and memorable experience for our visitors.
- Market Expansion: We are exploring opportunities for growth and expanding our presence in both existing and new states, both organically and inorganically. All of this combined with our wonderful team will help our stakeholders to maximise their wealth and for us to become the number one entertainment destination in the country.
- Progress towards digital transformation: We are launching a mobile application where guests have all the options right from booking tickets and pre-booking lunch buffet to buying merchandise. We aim to enhance guest engagement, streamline operations, and offer innovative online experiences – encourage guests to directly pre-book/book their visit on our own platforms.
Disclaimer: The opinions expressed above are personal and may not reflect the views of DSIJ.