Wonderla Holidays Limited (WONDERLA) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Wonderla Holidays Limited Q2 FY '25 results call hosted by ICICI Securities. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Adhidev Chattopadhyay from ICICI Securities. Thank you, and over to you, sir.

Yes. Good evening, everyone. On behalf of ICICI Securities, I'd like to welcome everyone today on the Wonderla Holidays Limited Q2 FY '25 results call. From the management, we have with us Mr. Arun Chittilappilly, the Managing Director; and Mr. Saji K. Louiz, the Chief Financial Officer. I'd now like to hand over the call to the management for their opening remarks. Over to you. Thank you.

Thank you. Good afternoon, everyone. This is Arun Chittilappilly, MD, Wonderla Holidays. I welcome all of you to discuss our Q2 and H1 FY '25 earnings. I'm joined by our CFO, Mr. Saji, and our COO, Mr. Dheeran. I hope everyone had a chance to go through our results and investor presentation. This quarter was marked by some operational and environment challenges that's typical of Q2 and has affected some of our performance. Unpredictable weather events and heavy rainfall and landslides, et cetera, don't bode well for our visitors. And turnout in several key locations were lower than expected. Despite the said challenges, we managed to maintain a decent performance through proper marketing interventions. Our footfall declined by 9% to 4.5 lakhs and leading to a 13% drop in income, which stood at INR 71.23 crores compared to Q2 as for FY '24. During the quarter, we also hosted a bunch of musical events, celebration, themed locations, et cetera, and giving people more reasons to visit our park. We also hosted our standout event called Adipolympics at our Kochi park during the quarter. As part of our continuous investment strategy, we also added multiple rides at our Hyderabad park at a cost of approximately INR 15 crores and was opened to public by the Telugu Superstar, Naga Chaitanya. We are optimistic that these enhancements will positively improve the customer experience in the long run. Another major highlight for us in this quarter was the official launch of our park in Bhubaneswar by the Honorable Deputy Chief Minister of Orissa. This launch has extended our reach to Eastern India and enhanced our pan India presence. While the consumers demonstrated cautious discretionary spending, our strategy of increasing non-ticket revenue and focusing on high-value visitors has helped to maintain our profitability. Our average revenue per user for the quarter reached INR 1,414, and for the first half of FY '25, it stood at INR 1,597. Additionally, we could see some behavior in shift from offline to online bookings across all our parks and compared to the same period of the last year, reflecting our ongoing efforts to strengthen our online engagement. I'm also pleased to share that the Chennai project construction is progressing well and expecting to be operational by end of Q3 FY '26. Beyond this, we are also continuously exploring new areas to expand our footprint into. Aligned with our expansion plan, our Board has approved fundraising through a qualified institutional placement or private placement up to INR 800 crore, supporting our projects for the next 7 years -- 7 to 8 years. As we look into the future, we maintain a positive outlook for growth. We are confident that our ongoing investment in enhancing guest experiences, embracing innovation and expanding our offerings will drive sustainable growth and strengthen our marketing position. We remain committed to delivering world-class experiences, adapting to evolving trends and seizing new opportunities in India with expanding amusement park and entertainment industry. With this, I would like to conclude my remarks, and I hand over to our CFO, Saji, for detailed analysis of financial performance. Thank you.

Thank you, Arun. Good afternoon, everyone. Thank you for being here for Q2 and H1 FY '25 earnings call. I am pleased to present a brief overview of our financial performance for the quarter. Our revenue from operations for Q2 FY '25 stood at INR 67.4 crores as compared to INR 75.2 crores, reflecting a degrowth of 10% Y-o-Y. EBITDA, including other income for the quarter stood at INR 2.8 crores, down by 90% Y-o-Y. EBITDA margin for the quarter stood at 4%. The degrowth in EBITDA was about INR 24 crores, which is predominantly attributable to reduction in our revenue by INR 8 crores, increase in our marketing spend by INR 6 crore and expansion of employee base by adding approximately 210 people across location and corporate office with an incremental wage bill of INR 5 crore. Our adjusted EBITDA net of ESOP expenses of INR 1.98 crores for the quarter stood at INR 4.7 crores, down by 82% Y-o-Y. Profit after tax for the quarter stood at INR 14.7 crores as compared to INR 13.5 crores, a growth of 9% Y-o-Y and PAT margin for the quarter stood at 21%. Moving on to half year performance. Our revenue from operations for the half year FY '25 stood at INR 240.3 crores as compared to INR 259.8 crores, reflecting a degrowth of 8% on Y-o-Y basis. EBITDA, including other income for the quarter stood at INR 98.7 crores, down by 34% Y-o-Y. EBITDA margins for the quarter stood at 40%. The degrowth in EBITDA was about INR 50 crores, which is predominantly attributable to reduction in our revenue by INR 19 crores, increase in our marketing spend by INR 11 crores, and expansion of employee base by adding approximately 210 people across location and corporate outings with an incremental wage bill of INR 10 crores. Our adjusted EBITDA, net of ESOP expenses of INR 4.15 crore for the quarter stood at INR 106.5 crores, down by 29% Y-o-Y. Profit after tax for the quarter stood at INR 78 crores as compared to INR 98 crores, a degrowth of 20% Y-o-Y and PAT margins for the quarter stood at 31%. Now moving to park-wise footfalls. In Q2 FY '25, our park -- our Bangalore park we saw a footfall of 1.96 lakhs. Kochi park received a footfall of 1.39 lakhs, Hyderabad 0.92 lakhs, and Bhubaneswar 0.24 lakhs. In H1 FY '25, the Bangalore recorded a footfall of 5.54 lakhs, Kochi with 4.14 lakhs, Hyderabad with 3.91 lakhs and then Bhubaneswar with 0.93 lakhs. With this, I'll conclude my speech and open the forum for Q&A session. Thank you.

[Operator Instructions] The first question comes from the line of Shivam from Equitree Capital.

Sir, I have a couple of questions. First, regarding the fund raise. So since we are doing the fund raise INR 800 crores all from equity. So my question is, why we are not doing like somewhat of debt of equity as we are -- like from our internal accrual, we are generating INR 200 crores of cash. So why this all equity?

No, we are not looking at all equity. We will be taking on debt also, based on what we outlay in terms of our future plans, if you have to build 2 or 3 or 4 parks in the future. We have a total CapEx of roughly INR 1,500 crores to INR 2,000 crores. And we are proposing to raise only INR 500 crores to INR 800 crores out of that through equity. The rest, there will be a combination of debt and internal accruals. So that's how we are planning it.

But sir, are you looking on the asset-light model parks coming forward?

Yes, yes, both asset-light, but Tier 1 cities, obviously, we'll do bigger investment. And sometimes it may not be asset-light because it depends on what kind of land parcels we finally agree to work with.

Okay, sir. So this INR 800 crores, we are raising for this -- because, sir, our asset-light model park costs around INR 200 crores. So the 4 parks we are like planning if we are raising this INR 800 crores?

No. I mean if you have to build large park, it's going to cost us -- one park will cost us between INR 700 crores to INR 800 crores, especially if in a city like Delhi or Bombay, so it depends on the kind of path that we finally build, like Indore or Mohali, we'll do something within under INR 200 crores.

Okay. So you mentioned that INR 800 crores, that will be sufficient for like coming 5 to 7 years?

Correct.

So that was my base question was like for coming 5 to 7 years, we're not going to raise anything like from that for equity. So why we are diluting that much of equity? That's my base question was?

We have not decided the quantum of equity that we will dilute. It depends on what we get. We are still -- I mean, it's still early days. We have not really decided -- I mean, it could be anywhere between INR 500 crores to INR 800 crores.

Okay. So it's not directly INR 800 crores which we hold from equity...

Yes, the final numbers are not -- it's not finalized.

And again -- sorry. Sir, my second question is for Saji sir. Sir, there is a direct tax adjustment of INR 24 crores in this quarter, DTA of INR 24 crores. So what was the...

Your voice is breaking, I'm not able to hear you properly.

Sir, my audio audible? Sir, in financials, there is an INR 24 crore -- hello. Sir, in financial -- in this quarter financial, there is an INR 24 crores direct debt adjustment there. So I just want to know the base of that.

This is basically the deferred tax adjustments. So previously, we had recorded a deferred tax when we did a revaluation of our land. So now after this current budget, there is a reduction in the capital gain tax from 20% to 12.5%. Accordingly, the deferred tax also reworked and then adjusted as on 30th of September, which amounts to about some INR 24 crores.

[Operator Instructions] The next question comes from the line of Vivek Kumar from Bestpals Research & Advisory LLP.

Am I audible?

Yes.

The first question is on -- because you are raising QIP, how many parks and like the size of parks, like is it Noida, is it Mumbai or Madhya Pradesh because Gujarat, Punjab, you've gone and done MOU in Madhya Pradesh. So which parks and in 5 years, let's say, in your growth plan, minimum, how many more parks apart from the, let's say, if I conclude -- include Chennai and Bhubaneswar to be done by next year, how many new parks can I assume in the worst case will be there, 3 parks or another 5 parks will be there in the next 5 years, apart from these 5 that you have..

It will be between 3 and 5.

Will it be large parks, it will be Noida or kind of...

Excluding Chennai.

Excluding Chennai it will be 3 to 5 parks, but it will be large parks or small parts like Indore or it will be Noida kind of park or both?

That we are still planning, there will be big parks also. We are not doing only small parks. We'll be doing big parks also.

But priority will be...

Or Ahmedabad, so...

Sorry, go ahead. sir.

Yes, yes, yes. So that is what. I mean I'm telling the final -- again, the exact numbers are not frozen because the project itself is not frozen yet. But once it's frozen, we'll definitely intimate all of you.

So QIP will be done, right? So this will be done?

Yes, yes.

So second question is normally in terms of the business model I'm talking about, footfall -- continuous raise in footfall seems to be a challenge, and you have introduced these events and these musical nights and all these things. So can you throw more like, let's say, the last park is Hyderabad, which you have opened in the last 4, 5, 6 years, just pre-COVID, really is it meeting your expectations? Or if there are challenges, what are the kind of challenges you're meeting to get footfall?

We are getting almost 45% EBITDA margin from Hyderabad. If you exclude COVID years, Hyderabad is only 5 years old. So it's still not as mature as the other 2 parks that we have. So it still is giving very good footfalls and revenues. So I think there is still growth possible from Hyderabad.

So if I can ask like this, okay, given another 5, 6 years, what in your...

For the quarter, I mean the rain and all that we can't predict. And obviously, anything to do with rain, floods and or a heat wave and all that obviously will affect any kind of discretionary spending that people have to get out of the house, right? So that we can't predict. But the rest of it, I think we are more or less confident that it will work because it's already been proven in 4 cities -- I mean, 3 cities, fourth city we've just opened. I mean -- so yes, we are reasonably confident that it will work in all Tier 1 and Tier 2 cities.

So if -- just trying to -- I'm not talking about this quarter. In general, I just want -- if I have to model, let's say, Bangalore Park, which you think is enough, what kind of footfall growth you will aim in Bangalore over the next 5 years? Just -- and what factors do you think will drive footfalls across any given...

Hard to predict, but I think we can expect low single-digit growth in Bangalore in percentage terms. And ARPU growth, you can expect between 5% to 8% per annum kind of thing you can take conservatively.

But you're not seeing footfall growth to be a challenge over the long run in general, given our business.

If you look at our CAGR growth for the last 10 years, you will see consistently it keeps growing. Of course, there will be dips in between, but I mean, there will be bumps also.

So any time line by which QIP will be done, Arunji?

Hopefully, within -- before the end of this financial year.

[Operator Instructions] The next question is from the line of [ Sahil Vora ] from [ NNMS Association ].

You mentioned an increase in online bookings. What specific strategies have you implemented to enhance online engagement? And what results have you seen so far?

Compared to last year, so we could see about some 48%, 50% of growth in online alone. This is mainly because of various digital spending, digital marketing, other things we are doing through our marketing department.

Okay. A follow-up would be, besides ticket sales, what are your strategies for increasing non-ticket revenue? And what impact do you expect this to have on overall financial performance?

Non-ticket revenue, if you could see that about some 10% to 15% hike is there in the current half year. And even the ARPU has also grown by 12% if you compare with the March number, March 2024 numbers. which can have a positive impact overall on our ARPU over a period of time.

The next question is from the line of Kruttika from Sharekhan by BNP Paribas. .

A couple of questions from my end. First would be the demand during the festive season. So there are vacations. And during this time, how was the demand across the parks? If you can help us on that?

The vacation time was in the first quarter, I mean, April and May. So because of certain issues like El Nino and then water problems, which we already indicated in our Q1 earnings call. So there is a loss of footfall in the month of April and then till mid of May. So things have improved post to that. And then presently, the Q3 will be our school season or maybe the group season. So we are just confident enough to perform well in Q3 as well -- Q3 across all our parks.

Yes, sir. By the festival season, I meant during the Diwali season in this Q3. And so accordingly, how are you expecting H2 for the footfall, specifically related to Diwali season? How was the footfalls in the Diwali season?

It was good. Diwali season was good. Dussehra and Diwali, both the festival seasons were good.

So okay. All right. And so now with respect to continuing on footfalls. So earlier, we had mentioned that FY '26, we will see mature park seeing footfall growth of around 5% to 6%. So do we still maintain that? Or do we need to change any in the guidance?

That's what the regular practice, if the mature park will give anywhere between 3% to 5% of footfall growth and then price increase of maybe equal to the inflation rate in the country. So that's what we follow on with respect to the matured park.

All right. All right. Okay. And with respect to the Orissa Park, so for the first half, I think we have done around INR 93 lakhs of footfall. So for the full year, what would be -- how do we see that going towards the full year?

So we were expecting about 3 lakh to 4 lakh of footfall in the full year of operation. But we are a new entrant to this particular region. So we need to wait and see the impact by end of this year.

First year tends to be a little unpredictable, especially the -- what usually happens is your peak seasons get very crowded and your weak seasons will be very low crowded because we are still a new player. It's only been 3 months since we opened in Bhubaneswar. But overall, I think for the year, we should -- like I said -- like Saji said, we should close between 3 lakh and 4 lakh visitors. Also, we are -- this is a new market for us. So there's a lot of learning that we also have to do in terms of marketing and sales promotion, things like that. So it takes a little bit of time. But I think overall, I think we are okay where we know that there is demand and it's still -- we are kind of very definitely a new offering in that area for sure. So I think that gives us a lot of confidence that we can get the footfalls that we want. And ARPU also has been pretty strong. So that also gives -- in fact, it's better than what we expected. So I think we should be able to -- in case footfalls are low, we can always offer more discounts and get higher footfall. So those things we are working on. And I think after 1 year is over, we can give you a more correct picture because it's still too early to kind of give you a strong opinion on this.

[Operator Instructions] And the next question comes from the line of Prolin Bharat Nandu from Edelweiss Public Alternatives.

So a couple of questions, Arun, right, now that the Board has approved a QIP, just -- I mean, if I'm not wrong, this is the first time which will be -- where we will be raising equity fund, right, over our history in some sense or maybe we must have done in the past, but not in the last 6 to 7 years at least.

Correct.

Exactly. So just wanted to understand that what is it that has pushed us to -- in terms of growing the -- or I mean, pushing the growth pedal very hard this time around? Is it that the environment or the interaction that you have with states are a lot more conducive than they have been in the past? And having said that, do you think that the future expansion will go more in a way your Orissa expansion has happened wherein there was a single window and state was very, very supportive versus Chennai, where we had to probably get some regulatory compliance before we started expansion. So can you just help us?

Yes. I would say that it will be like a mix of both. We will work on a couple of projects where there is a significant government support. But we will also have to work without that as well in some states because this varies between state to state. We are already in talks with multiple state governments. So we are hopeful that we can do 1 or 2 more projects like how we did in Orissa. But other locations, especially Tier 1 cities, we will have to do in different fashion. So we will keep you updated on whenever we sign something or when there is clarity on this.

Sure. But Arun, to the larger question, I mean, why QIP at this time, right? I mean, if you can -- is it that we are seeing more spend, people more -- wanting to visit more and more parks, being more conducive. So just a thought.

There is a lot of -- see, last 2 years, honestly, we have done better than what we thought. With 3 parks, we did INR 500 crore revenue, right? So that gives us a lot of confidence that there is a lot of potential in the industry for us to grow, especially Tier 1 and Tier 2 is also something that we are quite bullish about, especially after our experience in Orissa. If we are able to build a park in under 16 months for a full-fledged park, which we are able to do for less than INR 200 crores, I think that is a remarkable achievement, and we want to capitalize on those kind of opportunities because every year that we wait, the cost of building a small park or a big park just goes up by at least 5%, 10%. So that, I think these are some of the factors. And I think this is the right time to kind of go a little more aggressive than what we have done in the past. It's both. I mean, both the government support and the fact that people are willing to spend more on this.

To add to this point, if you see the industry size as well because if it is growing from INR 11,000 crores to about some INR 25,000 crores in the next 4, 5 years as per some of the industry reports, so which is showing a CAGR of about some 10 to 11 percentage. So we also would like to participate and get a major share from that particular industry growth.

So point taken, thank you for that, but Arun, just to double-click on this further, while Orissa was completed at INR 2,000 crores -- sorry, INR 200 crores cost in 16 months. But when you talk about a park, which will cost you at around, let's say, INR 600 crores, INR 700 crores, and we are open to that as well, right, especially in Tier 1 cities, that will take a fairly longer period of time. And if I look at your gross block, it's somewhere close to INR 1,100 crores, INR 1,200 crores. So we are in a way, adding 60%, 70% to our gross block in terms of our capital employed. So are we confident that we will be able to finish the park of larger size of around, let's say, INR 600 crores, INR 700 crores in, let's say, 2.5, 3 years' time? I mean, is that a fair way to probably think about it? And Tier 1 cities also, given that the higher real estate cost and a much larger CapEx required, that also have enough opportunities to open the park and get to our unit economics that we typically get in any new parks?

Yes, yes. I mean, obviously, Tier 1 cities are more lucrative. Only thing is, obviously, the investment is going to be higher. So that is why we are raising money, right? I mean to do smaller parks, like you said, we don't really need to do raise money. We can manage it without that. But when we have to do a Tier 1 city and then we have to do -- we have to spend on building something and do multiple projects simultaneously. That is when we need funding. If we were to do one by one, I don't think we need to raise money. It's because we are doing back-to-back, and that is the reason why we are looking at it.

Understood. And just last point on the internal capacity, right? Correct me if I'm wrong, in the past call, you have mentioned that in terms of our capacity to work on multiple parks simultaneously, we can do it at around -- we can build 3 parks at the same point of time, right? Is that correct? Is that how we have built capacity?

Yes, yes, 2 to 3. Two we can easily do. Three also is possible, but I think we are still building that capability because we need a large team to work on each project. Each of our park needs construction time of at least 18 months. It's a 50-acre parcel of land, at least 1,000 people have to work on site every day for 18 months for it to complete. So these are large projects. So we also need a good team to handle it because the quality of construction and all that is also very, very crucial because safety is involved. Also, we have to make a lot of the rides ourselves. So lot of complexities like that are involved. So that is why I think we need to look at a strong team as well, and we are working on that as well.

Understood. Can I ask one more question, if that's fine?

Yes, sure. Okay.

Yes. So just on the demand slowdown, right, reduction in footfall. Last quarter, you highlighted that there might be some weakness in this whole revenge kind of purchases or events kind of experience. This quarter, you specifically called out one-off kind of events, right, rainfall and all. So is it that probably from whatever you see in Diwali and Dussehra, we are back to our trajectory, which we had seen in FY '23 and FY '24 in terms of footfall growth?

See, we -- this year, like I said, we had 2 years of blockbuster growth because of post-COVID exuberance or whatever you want to call it. So this year, I think people are kind of coming back to a new normal. And also, there are all these unpredictable weather events that are also happening. So because of that, I think we are seeing this footfall decline. This is normal actually in our business because if you look at our past history also, you'll see 1 or 2 years of growth and then you'll see 1 or 2 years of like a flattish this thing and then it jumps. So it doesn't go linearly. But over a large -- like 2 or 3 or 4 years, you will see a CAGR growth in footfalls and revenue, what we have done historically. And we are not seeing anything that tells us that will not happen again because we are still seeing strong, people who are coming, they are willing to spend, and they are spending more than what we think they will spend. So that's -- those are all good signs. And even in the new markets like Orissa, our ARPUs are, in fact, much closer to the big part than what we thought. So these are all good signs. So I mean we are still bullish on this, and it should be fine.

The next question is from the line of Parimal Mithani from Credential Investments.

Can you hear me?

Yes, yes.

Yes. I just wanted to know why this aggressiveness in terms of opening parks and raising cash, because you see traditionally over the last 10 years, you have been very conservative in terms of taking assignment in terms of parks. If you can explain that will be much better. And how do you see the next 5 years? Because what I gather from the call is that you...

I have explained that in the last question. I have just explained that specifically we are looking to grow a little more aggressively than before because I think the market is conducive to that. There is a lot of demand for our kind of products. People are willing to spend more. ARPUs are higher. Governments are more receptive to this kind of investment. In fact, I think the new tourism policy, tourism itself is going to be part of industry, I think, from a Government of India standpoint. So I think getting approvals, all those things will get -- are getting easier. So I think it's a good time for us to invest.

This will be a mix of debt and equity? Or equity will be more sir?

I already answered this question. It will be a combination of equity, debt, and internal accruals.

[Operator Instructions] The next question comes from the line of Shivam from Equitree Capital.

Am I audible?

Audible.

Sir, just a follow-up question. Since we have opened the Bhubaneswar Park right now like 1 quarter back, and we are opening Chennai Park in '26, and we are also looking at 5 parks in coming 5 years. So my question is on margin side that when the Bhubaneswar park will go on a normal pace, the Chennai park expense is going to come. Then after that Chennai park will go on a normal pace, the other park expense going to come. So the margins wise, how we are seeing in the future?

Historically, if you see our margins, the EBITDA margins for the past 10 years and the trend if you see before this COVID pent-up demand, it was about 40% of EBITDA margins over there. And then post COVID, because of the pent-up demand and then 40% growth in footfalls and all. So our margins also increased to about some 40 -- 50, 55 percentage, which is quite normal. And then presently, we are building the team at the corporate office level as well to manage the parks. Earlier, we had only 3 parks. Now we have 4 parks. Now we are adding parks on each of these years. Then we need people also to manage the park. So then we are just building the team at a corporate office level. And if you see our wage bill also, we would have already recruited about some 130 people apart from the Bhubaneswar park to manage the corporate level management of all the parks. That's why the margin swing is happening. And apart from that, we spend about some INR 3 crores, INR 3.5 crores for the Bhubaneswar park launch. So whenever you are adding new parks, temporarily, there will be a change in the EBITDA margins. But over a period of time, it will stabilize within the historical trend. That's what we see.

Sir, that's what my question was. You mentioned that 40%, 45% we are doing in EBITDA and the temporary margin is going to hit, as you said. But how much -- how long the temporary days were there because it continues in coming 5 years, you will want to open one park every year. And this will take time to normalize. But the expense will go and charge, expense upfront. So I'm asking the margin, what's your margin expectation from coming 5 years like taking into account all the parks we are opening. Like we are going to do the 40%, 45% margin also, that's what.

Corporate level, we already completed most of the recruitment. Apart from that almost like 90%, we have already completed the recruitment and then the team building activities and all. So now it's only thing is like you have to add parks and then only for the particular park, we need to add certain people. So it will not create so much of a problem maybe from second and third year for a new park. So there could be some 1 or 2 percentage shrinkage from the average EBITDA margin we used to get in earlier days.

[Operator Instructions] The next question comes from the line of Vivek Kumar from Bestpals Research & Advisory LLP.

Am I audible sir?

Yes, you are.

Yes.

Arun are there any locations that you have zeroed in that we will definitely do Noida and Mumbai or we'll definitely do these 2 and rest 2, 3 can be different or nothing like this, everything is work in progress as of now?

See, we have zeroed on about 4 or 5 locations, like I said before. I think the exact order in which we will do it, we don't know yet because it depends on which approvals come first. I think we will share it with you whenever we have the details.

No, I'm not asking about the order, but which cities like you will definitely go ahead?

Yes, yes.

So Noida is something that you will definitely go, Noida and Mumbai or there's nothing like that.

Yes, yes. Noida, and Indore, and some of those locations, we are definitely keen to do.

The next question is from the line of [ Avinava ] an individual investor.

Am I audible?

Yes, sir, you are.

Sir, I want to know like if there will be a reevaluation of land going to be done before QIP?

No, no such plans.

Okay. So any reason like that will increase the current valuation of the company, right?

No, that is not necessary to just build the value in our books of accounts that we already did it in the -- at the time of transformation -- transferring from the old Ind AS from the Indian GAAP to the Ind AS time. So where we recorded about some INR 400 crores of revision in the land value. We don't want to intend to do that valuation as of now.

[Operator Instructions] The next question comes from the line of Nirav Savai from Abakkus AMC.

My question was on the land which is unutilized right now in the existing 3 parks. Are there any plan to utilize it in the next 2, 3 years? And what would be the purpose? Would it be hotels? Would it be extension of amusement parks? Any thoughts on that?

The land we have bought because it's a long-term view because later on buying land once we start a project is almost impossible. Yes, we'll definitely use all this property. We have maybe between 30% to 40% of land unutilized in most of our projects, not all, some of them have more. So yes, we want to keep it like that because later on buying the land becomes almost impossible.

So 2 of the parks have been more than 10 years old. So anything which you have thought about extension of amusement parks in next 2, 3 years? Or you will wait for that?

Yes, yes, we are expanding -- actually, not only -- all of our parks are expanding right now.

Okay. So no plans to build any hotels or anything different from what we are doing right now?

If there is something, we will definitely keep you posted. Right now, we are just looking at geographical expansion.

And another question was on this, what you had indicated previously that whatever expansion we do in future is going to be with the state government and long-term lease, and we would not be buying land. So this holds for the expansion, which we have highlighted, Mumbai, Noida, Indore, that continues? Or is there any change in the thought?

Yes, yes, it continues.

So INR 1,500 crores, INR 2,000 crores CapEx will be all on long-term leases of land and doesn't include any land cost?

Yes. As of now, we are not looking at -- wherever possible, we will not buy land. But if land is available and it's -- I mean, we are not averse to buying land because if the lease rental and the cost of land is similar, we might as well buy it. It depends, state to state, it varies. So it's hard to predict that. But wherever possible, we would like to keep the CapEx low and do the lease.

The next question comes from the line of [ Ekanth ] from Minerva Assets.

Am I audible.

Yes.

Yes, sir, you are.

I have a question, and I apologize if it's a repetition because I joined slightly late. But it's more of a bookkeeping question. Can you please, if possible, explain the deferred tax credit that we took this time? Has there been any like offloading of assets since the policy has changed?

No, there is no policy change. When we did the revaluation of the land when we migrated from the Indian GAAP to Ind AS, we recognized the deferred tax and then kept it in our books, which was about some, I think, some INR 70 crores, INR 75 crores, which was sitting in our balance sheet if we could observe it. And then presently, after this budget, the capital gain tax rate shifted from 20% to 12.5% without indexation. So this has been created as a deferred tax for getting a future tax benefit when you sell the land. That is an assumption activity deferred tax are worked out. Now presently, the tax rate has changed. So automatically, the benefit what you get when you sell the land automatically will come down. Accordingly, that has been revalued. So there is an INR 24 crore downward revision in this particular position. So from INR 70 crores, INR 75 crores to up to some INR 50 crores odd. So that's why they just didn't come as a beneficial in our P&L account.

[Operator Instructions] Next question comes from the line of Prolin Bharat Nandu from Edelweiss Public Alternatives.

Two more questions from my side. Arun, so in future expansion, how do we think about a park with and without resort, right? I mean does a park with resort help us gaining more footfall because then it becomes like more of a destination kind of a thing? What is our thought process on expansion of parks and resort accompanying it?

All the large parks that we do, obviously, we can do, even the small parks, even in Bhubaneswar, actually, we can do a resort. It depends on the footfalls and the kind of demand that we see. I think every park is different. I think -- but we are definitely thinking about building a resort as part of the park experience as well. In fact, every time we design a park, we always leave a space for a resort. So I think definitely, it's part of our plan for most of our projects.

Okay. But are you suggesting that now we will probably build a resort with it, at the same time when we build a park or you will still want that optionality.

No, no, we will not do that, we will wait for the park to mature a little bit and then build a resort. We will not do it in the beginning.

Sure. Understood. Understood. And are we still averse to -- I mean, buying a park or buying any other asset which is available? Or have we changed our view there?

If there is a good asset available at a decent valuation, we will do it. But our parks are unique. So we don't find that nobody else builds parks like the way we build. So it's very difficult to -- you end up paying a lot more for something, and it's not something that we want -- I mean, you pay a fair -- you pay market rate and all those things. And it doesn't really -- financially, it doesn't make sense. If it makes sense, of course, we'll look into that.

But have you evaluated anything -- any of the transactions which have happened in the last couple of years where some of our competitors have probably bought and have we evaluated and passed on?

Its tough for us, and we have actually said no to most of it.

Fair point. Okay, Arun. And last point would be on non-ticketing revenue, right? In the past, you have highlighted some of the ways in which you want to increase that, right? So in terms of the optimal mix, right, between ticket revenue and non-ticket revenue, where are we and where can we go over, let's say, 3- to 5-year period of time?

So we are at some 75-25 ratio between ticket and non-ticket revenue. So our aim is to make it about some 60-40 in the long run.

Right. And can you give us a few drivers as to what will take it there? I mean what is it that we can do to increase 25% to 40%?

So we need to -- 2 things are there, in non-ticket revenue, we have the F&B plus the merchandise. So what we need to do, the offerings we need to always review on a regular basis and to provide the more branded items and then the variety, the choice we need to give to all the guests. That is with respect to the merchandise. And then with respect to our F&B things, we need to keep developing new, curate new menus, and offerings should be diversified across the parks, which will help us to stay abreast and then people will be spending more on the non-ticket revenue, and another method is like tying it up with the park entry ticket so that we can just sell more and then people also get value for money while they are visiting the parks.

As there are no further questions from participants, I would now like to hand the conference over to management from Wonderla Limited for closing comments. Over to you, sir.

Thanks for joining our Q2 FY '25 conference call. We hope to -- we are bullish, continue our performance, and expand our footprint to new locations. So these are some of the core strategies that we are working on. We hope to see you in the next conference call. Thank you.

Thank you, sir. On behalf of ICICI Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.