PNN
Ahmedabad (Gujarat) [India], November 16: Praveg Limited (BSE - 531637), India's leading eco-responsible luxury resorts company, reported its unaudited Financial Results for the second quarter of fiscal year 2023-24 (Q2 FY24).
Key Financial Highlights
Q2 FY24:
* Total Income Rs14.64 crore
* EBITDA of Rs4.48 crore
* EBITDA margin at 30.61%
* Net Profit of Rs2.10 crore
* Net profit margin at 14.35%
* EPS (Diluted) Rs0.97
Key Recent Developments:
1) Commencement of 2 Luxury resorts i.e. Dholavira Resort, White Rann Resort and Praveg's Grand Eulogia, a 5 star hotel in Ahmedabad Gujarat
2) As a part of our business acquisition strategy, Eulogia Inn Private Limited merges with Praveg Limited.
3) Receipt of Work Order to Development, Operation and Management of Tent City at Kihim in Raigad, Maharashtra, Damanganga Garden Kachigam, Daman and Tent City at Nagoa Beach, Diu.
Developments during the Quarter:
1) Operations at Tent City at Chakratirth Beach, Diu and Tent City at Jampore Beach, Daman commenced in August
2) Praveg Receives Work order for Developing 2 Tent Cities in Ayodhya, Uttar Pradesh i.e. Bramhkund and Saryughat.
The current quarter experienced a decrease in demand due to seasonal factors, resulting in a 15.29% decline in our total income compared to the same quarter last year. Moreover, our EBITDA margins have narrowed down due to the elevated operational costs associated with our upcoming project developments. With 6 properties now operational and 12 more in the pipeline, the Company is anticipating strong growth during the second half of the year. To reduce the impact of seasonal earnings fluctuations Praveg is investing in resort and hotel properties that will remain operational around the year. The company's recent opening of two beach resorts in Daman and Diu exemplifies this proactive approach.
The introduction of new resorts in both the previous and current financial year has resulted in a year-on-year increase in depreciation and amortization charges by over 68.50%. This uptick can be attributed to the substantial capital expenditures associated with the development of new resort properties in Q2 FY24.
The focus remains on identifying avenues for expense optimization and operational refinement to drive improved financial performance in the upcoming quarter. Notably, the company attained a robust EBITDA margin of 30.6% in Q2 FY24. Additionally, the company depreciates and amortizes non-permanent structures and equipment used in resort construction over a shorter span of five years, resulting in higher non-cash charges against profits compared to industry standards.
Commenting on the results Vishnu Patel, Chairman, Praveg Limited said, "Current quarter has witnessed lower revenues, due to lower exhibition revenues compared to last year Q2 2023. Our revenue from resorts was practically unchanged from Q2 2023 and the addition of resort capacity towards the end of Q2 2024 will be fully felt only during H2 2024. During H1FY24, our 6 resorts became operational. We are poised for a period of growth in the second half of FY24, fuelled by the scaling up of our Events & Exhibition business and the timely initiation of our upcoming hospitality projects. We have launched recruitment initiatives to assemble a strong professional team that will play a pivotal role in supporting our growth. These endeavours are expected to make a positive impact on our overall performance for the current year. Looking ahead, we anticipate our operational resorts to achieve occupancy rates between 40-45% in the upcoming quarter, while generating an average daily room rate (ADR) of INR 7,000 to 9,000. As we move forward, our commitment to nurturing our Hospitality Business remains at the forefront of our strategy. With the anticipated growth of our Events and Exhibition sector, we foresee a powerful synergy that will propel our overall operations to new heights.
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