Ajwa Fun World & Resort Ltd Management Discussions

Economic overview

Global economy

The global amusement park market is poised for substantial growth, projected to reach USD 79.26 billion by 2031, expanding at a CAGR of 4.97%. The Asia-Pacific region isexpected to hold a significant market share due to the presence of major players and increasing consumer interest in the region.

The global economy showcased remarkable resilience, growing by 2.7% which was just slightly above the 2.5% threshold and is often associated with a global recession. Thisgrowth prevented a slight outright contraction and several major economies like the US, China and India registered solid economic performance.

However, this growth was primarily driven by private consumption, surpassing income growth. This suggested that it was largelyfuelled by debt accumulation.

Meanwhile, pressing challenges like climate change, rising inequality and lack of development progress are growing more severe but lack coordinated solutions. Carbon emissions continue rising, workers share of income is shrinking in both developed and developing countries and years of underinvestment are hindering sustainable development efforts, especially in developing nations facing fiscal constraints and mounting debt burdens. However, the anticipated easing of monetary policy could provide some relief on debt servicing costs.

The global economy is projected to grow by 2.6%, marking the third consecutive year of declining growth compared to the pre-pandemic period. Meanwhile, the shortage of productive investment remains worrisome. While some easing of monetary policy may provide modest relief, bolder policies focused on boosting public and private investment in sustainable development priorities like renewable energy, infrastructure and reducing inequalities will be critical to accelerating progress on major global challenges. Safeguarding policy space for strategic public investment will be vital for the global economy to make substantive advances.

The Indian economy has witnessed remarkable growth as it established itself as the worlds fastest-growing major economy. The country recorded an impressive growth rate of above 8.2%. This expansion was driven by strong infrastructure development, a thriving services sector and innovative welfare programmes.

The government has paved the way for a unified national market by prioritising the expansion of physical and digital infrastructure. With 149 airports, which is double the number from a decade ago and the addition of 10,000 km of roads and 15 GW of solar energy capacity annually, India is increasing its connectivity and embracing renewable energy. Moreover, India has made efforts to build intangible infrastructure, such as digital payment systems, modern capital markets, banks and a unified digital tax system, enabling businesses to capitalise on economies of scale.

Additionally, the government has also announced further reforms in one of the budgets, including a reduction in corporate tax rates from 30% to 22%, the establishment of new railway and port corridors and a focus on developing tourism infrastructure on islands like Lakshadweep to boost employment opportunities. The budget also highlighted governments efforts to attract foreign direct investment (FDI) in the tourism sector. Indias services sector, particularly in information technology and related domains, has emerged as a global powerhouse. Indian IT firms have established “global capability centres” that offer multinational corporations a wide range of services, including research and development, legal and accounting services. This sector has been a driving force behind the countrys economic growth and position as a services export hub

Industry structure and development i.e. THE INDIAN PARKS INDUSTRY

The economic growth and prosperity of the nation is primarily driven by many factors. The tourism and hospitality sector is one such factor, serving as a fundamental towards the growth of Indias service industry. This dynamic sector acts as a catalyst for job creation, rapid development, and the stimulation of multi-use infrastructure growth, including world-class hotels, resorts, restaurants, transportation networks, and healthcare facilities.

India possesses a rich tapestry of geographical diversity, including awe-inspiring world heritage sites and niche tourism offerings. From cruise tourism and adventure tourism to medical tourism and eco-tourism, these unique experiences have led to an exponential increasein tourist arrivals, opening up vast employment opportunities across the country.

The Ministry of Tourism is on a mission to promote the industry through active participation from all states, the convergence of government programmes and the establishment of impactful public-private partnerships.

The tourism industry is one of the leading employers of women, due to the increasing focus on diversity and gender empowerment. The government collaborates with stakeholders to create a conducive work environment that fosters equal opportunities and celebrates the contributions of female employees constantly introduced new attractions, utilising its in-house ride designing and manufacturing capabilities, ensuring that visitorsa re treated to novel and exciting experiences with each visit.

Global amusement park industry

The market size for the global amusement park industry has experienced exceptional growth. The open-air leisure and entertainment areas, focused on fictional characters and themes, cater to people of all ages.

They offer a diverse range of experiences, including mechanical rides, water parks, theme parks, arcades, casinos, hotels, resorts and refreshment areas. Amusement parks have also evolved to provide immersive cinematic experiences with high-definition light and sound performances, as well as theatrical productions appealing to both adults and children.

Some of the major industry drivers include rapid urbanization and the accompanying growth in the travel and tourism sector. The availability of cutting-edge rides, accommodations and licensed merchandise within these parks have further accelerated their expansion. Visitors are drawn to amusement parks by the accommodations, merchandise and innovative rides, catering to individuals of all ages. The industry is also expected to grow due to an increase in the number of tourists, especially children and parents, as these parks are based on fictional characters, allowing young visitors to interact with costumed characters from popular films.

Outlook for global amusement parks

Amusement park companies are witnessing positive momentum towards pre-pandemic levels of business after facing covid induced headwinds in the recent years. The growth is due to the rearrangement of operations and recovery from pandemic restrictions involving social distancing, remote working and closure of commercial activities.

The global amusement park market is poised for substantial growth, projected to reach USD 79.26 billion by 2031, expanding at a CAGR of 4.97%. The Asia-Pacific region is expected to hold a significant market share due to the presence of major players and increasing consumer interest in the region.

The growing usage of social media and mass media is having a positive impact on the amusement park market. As an increasing number of visitors share their experiences on social media platforms, it helps in promoting the parks to potential customers. As a result, social media has become an effective marketing tool for amusement parks to attract new customers. The extensive use of social media is expected to drive the growth of the amusement park industry and companies are leveraging this tool to acquire new customers.

Amusement parks are incorporating virtual and augmented reality technology to enhance the overall customer experience. These technologies offer an immersive experience by creating a computer-generated environment that can interact with a person or by placing virtual objects in the real world. Rides and theatre-based attractions are among the areas where this technology is being implemented to enhance the visitors experience.

AJWA is a leading player in the Indian amusement park industry and continues to grow and innovate to provide visitors with unforgettable experiences. AJWA parks have been visited by over 10 million visitors since 2000, making us the most visited amusement park in India. The Company has nearly two decades of expertise in administering parks in Vadodara.

The Company is embracing digitization to improve internal processes and increase efficiency, safety, and productivity. The organisation runs frequent training programmes to provide its employees with the skills needed to adapt to new digital platforms that are released on a regular basis.

The Company has ability to leverage the ‘first-mover advantage through Fun world and resort. There are significant barriers to entry in the business of theme and Resort in India and it is difficult to replicate a project of similar scale and size in India. Among the most important of these barriers is the need for significant capital expenditure to set up theme and Resort, the difficulty to identify and purchase large and suitable parcels of land on commercially viable terms and the long lead-time from the conceptualization to the launch of rides and attractions. The Company believes that its location off the VADODARA, the large parcel of land owned by the Company, Its rides and attractions of quality and standards and its qualified management and operations team provide the Company with a significant competitive advantage over any new park.

The all-round India growth story continues to remain strong and attractive. Both IMF and World Bank (WB) have predicted the Indian economy is growing in very fast phase. The key drivers of growth for the India economy are in place for a sustained and uninterrupted growth in the future.

Both favorable macroeconomic factors as well as dynamic demographics indicate to a period of assured uptrend and growth in the Indian amusement parks industry. Against this positive and optimistic outlook of the economy, the outlook for the Company is extremely favorable and exciting, with a high potential for accelerated growth and expansion. The company is adopting the following business strategies to grow the business in the future and due to the covid effect the business of the company is being completely stopped.

Your company continues to place considerable emphasis and effort on the internal control systems. There is well established internal control system with clearly laid down powers and responsibilities, wherever necessary, that can be exercised by various levels of the Management in the Company.

Human resources management is an important function in the Company in view of the large set up of the organization and diverse line and staff functions. The goal is to create an inclusive working environment that attracts and retains the best people, enhances their flexibility, capability and motivation and encourages them to be involved in the growth of the Company. Systematic and purposeful training to its workforce is undertaken resulting in improving their motivation to work thus benefiting both employees as well as the Company. The Company continued to enjoy healthy industrial relations during the year.

The Company achieved a robust and resilient performance throughout the year. The introduction of quarterly events, park activities, and expanded food and beverage offerings led to a rise in footfall, ultimately contributing significantly to the companys success. The Company reported total Revenue of Rs. 270.24 Lacs, and EBITDA of 38.92 Lacs, and PAT at 29.92 Lacs in this for FY 2024-2025.

Statements in this report on Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions may be ‘forward looking statements within the meaning of applicable security laws or regulations. These statements are based on certain assumptions and expectations of future events. Actual results could however differ from those expressed or implied. Many important factors including global and domestic estimates, changes in government regulations, tax laws and other statutes, and force majeure may affect the actual result which could be different from what the director senvisage in terms of future performance and outlook.