Nicco Parks & Resorts Ltd Management Discussions

ECONOMIC OVERVIEW A. GLOBAL OUTLOOK

The global economy demonstrated resilience in 2023, achieving a stable growth rate of 3.0%, as reported in the World Economic Outlook 2024. Despite facing significant challenges due to geopolitical tensions, the global growth rate is projected to increase to 3.2% for both 2024 and 2025. However, this remains below the historical average of 3.8% observed between 2000 and 2019. This tempered growth reflects cautious monetary policies and expectations of subdued productivity growth in key large markets. On a positive note, global inflation is expected to ease, falling to 5.9% in 2024 and further to 4.5% in 2025, after experiencing rates above 7% in recent years. Among emerging-market economies within the G20, India is poised to lead with a robust growth forecast of 6.5%, followed closely by China and Indonesia. According to the Market Intelligence and Analytics report by CRISIL, India is on track to become the third-largest economy, nearing the $7 trillion mark by 2031, driven by an average growth expectation of 6.7%. The growth enablers, particularly the increase in capital expenditures in industrial and infrastructure sectors, are expected to bolster financial flexibility, foster healthy balance sheets, and boost revenues. For our industry, these economic trends signal a positive environment for continued investment and expansion, which will ultimately contribute to enhancing guest experiences and sustaining long-term growth.

B. INDIAN OUTLOOK

In 2023 (FY24), the Indian economy demonstrated exceptional resilience, emerging as one of the fastest-growing major economies in the world with a growth rate of 7.8%. This robust performance underscored Indias appeal to investors, driven by its capacity for large-scale operations, a vast pool of skilled professionals, and significant advancements in technology and innovation. While the International Monetary Fund (IMF) projects global economic growth at 3.2% for 2024 and 2025, slightly below the historical annual average of 3.8% (2000–19), India is anticipated to grow at 6.8% in 2024 (FY25) and 6.5% in 2025 (FY26), contributing approximately 16% of global growth. Additionally, the Asian Development Bank (ADB) has revised its forecast for Indias GDP growth to 7% for FY25, up from an earlier estimate of 6.7%. India is poised to be a key driver of global economic growth in the coming years, with bright prospects fueled by strong domestic demand, a growing working-age population, robust public and private investments and a dynamic services sector. Sources: IMF Reports 2024, ADB Bank data

INDUSTRY OVERVIEW

A. GLOBAL AMUSEMENT PARK INDUSTRY

In 2023, the global amusement parks market was valued at USD 74.2 billion, with projections indicating a compound annual growth rate (CAGR) of over 5.5% from 2024 to 2032. This growth is fueled by the resurgence of global tourism and increasing urbanization. International tourism in 2023 reached 88% of pre-pandemic levels, with 1.3 billion international arrivals and full recovery expected by the end of 2024. As tourism flourishes, theme parks have become an integral part of the travel experience, especially in urban centers where growing populations and increased leisure spending are driving demand.

North America led the market in 2023, holding over 35% of the global share, thanks to strong economic conditions, high consumer spending and a robust tourism infrastructure. The region continues to attract visitors year-round through ongoing investments in new attractions, particularly those leveraging popular Intellectual Property (IP). In Asia, rapid urbanization, a growing middle class and rising disposable incomes in countries like China, India and Southeast Asian nations are also propelling market growth, supported by government initiatives and technological advancements in ride attractions.

The Middle East is emerging as a promising growth hub, driven by strategic government investments in tourism infrastructure and efforts to diversify economies from oil dependency. The regions international tourism is rising, further boosted by major events such as expos and sporting tournaments.

Leading companies, including Walt Disney Parks and Resorts & Comcast Corporation, collectively held over 45% of the market share in 2023. These industry giants maintain their dominance through continuous innovation, investing in advanced attractions, immersive experiences, and strategic alliances with popular IPs. Their expansion into emerging markets, combined with aggressive marketing and sustainability initiatives, enhances geographic diversity and market flexibility, ensuring long-term viability and continued growth.

B. INDIAN AMUSEMENT PARK INDUSTRY

The Indian amusement park industry is on an impressive growth trajectory, projected to expand at an annual rate of 10% from 2023 to 2027. The sector is anticipated to exceed USD 1 billion in revenue by the end of 2023, reflecting its robust expansion amidst a dynamic economic environment.

Growth Drivers

Several key factors are driving this remarkable growth. Rising disposable incomes across the country are significantly increasing leisure spending power, enabling more families to indulge in entertainment activities. The expanding middle class, with its growing appetite for recreational experiences, is further fueling demand for amusement parks. Additionally, rapid urbanization is generating a heightened need for family-friendly entertainment options, as more people move to cities and seek diverse leisure activities.

Consumer Trends and Technological Advancements

The industrys expansion is also influenced by evolving consumer preferences, with increased internet usage and a growing demand for unique, immersive experiences shaping the market. Technological advancements, including the integration of augmented reality (AR), virtual reality (VR), and high-tech animatronics, are enhancing visitor experiences and ensuring improved safety. These innovations are becoming essential in attracting and retaining visitors in a competitive landscape.

Future Outlook

Looking ahead, the Indian amusement park industry is projected to grow at a compound annual growth rate (CAGR) of 10-12%, potentially reaching USD 2.2-2.5 billion by 2027. The sectors continued success will depend on its ability to deliver exceptional experiences, leverage cutting-edge technology and adapt to diverse consumer preferences. As the industry evolves, maintaining a focus on innovation and meeting the dynamic needs of visitors will be crucial for long-term growth and sustainability.

C. SWOT Analysis of the Amusement Park Industry

Strengths:

1. Diverse Attractions: Amusement parks offer a wide variety of entertainment options, catering to different age groups and interests, which helps attract a broad audience.

2. Cultural Richness: Parks that incorporate local culture and themes can create unique experiences that resonate with visitors and enhance their appeal.

3. Growing Middle Class: In developing countries like India, the expanding middle class has increased disposable income and a greater willingness to spend on leisure activities, benefiting the industry.

4. Technological Advancements: The integration of new technologies, such as virtual reality (VR) and augmented reality (AR), enriches visitor experiences and keeps attractions fresh and engaging.

Weaknesses:

1. Seasonal Fluctuations: Amusement parks often experience significant variations in attendance due to seasonal changes and weather conditions, impacting revenue stability.

2. Infrastructure Challenges: Developing and maintaining large-scale amusement parks requires significant investment in infrastructure, which can be challenging and costly.

3. Maintenance and Safety Standards: Ensuring high standards of maintenance and safety can be demanding and expensive, particularly for older attractions.

4. Price Sensitivity: Economic downturns and changes in consumer spending can affect the affordability of park visits, potentially reducing attendance.

Opportunities:

1. Growing Domestic Tourism: The rise in domestic tourism, presents a chance to increase footfall and revenue by attracting local visitors.

2. Rising Disposable Income: With higher disposable incomes, more consumers are able to spend on leisure activities, providing a larger market for amusement parks.

3. Technological Advancements: Embracing innovations like VR, AR, and interactive experiences can enhance park offerings and attract a diverse audience looking for novel entertainment options.

4. Thematic Innovation: Regular updates and innovations in themes and attractions can help parks stay relevant, attract repeat visitors, and maintain excitement among guests.

Threats:

1. Uncertain Economic Environment: Economic instability, such as inflation and fluctuating exchange rates, can affect consumer spending on leisure activities and impact park revenue.

2. Competition from Online Entertainment: The rise of online entertainment, including streaming services and video games, offers convenient and cost-effective alternatives, posing a threat to traditional amusement parks.

3. Regulatory Challenges: The industry faces various regulations related to safety, environmental concerns, and land use, which can create operational challenges and increase compliance costs.

4. Public Health Concerns: Ongoing or future public health crises, like the COVID-19 pandemic, can lead to temporary closures, reduced visitor numbers, and the need for additional health and safety measures.

While the amusement park industry benefits from diverse attractions, cultural appeal and technological advancements, it must navigate challenges such as seasonal fluctuations, infrastructure demands, and economic uncertainties. By leveraging opportunities such as growing domestic tourism and technological innovations and addressing threats like regulatory hurdles and competition from online entertainment, amusement parks can position themselves for sustained growth and success in the evolving market.

D. Segment-wise Performance

a. Park Operations

The Financial Year 2023-2024 marked a stabilization in visitor numbers, returning to pre-COVID levels after the exceptional surge witnessed in the Financial Year 2022-2023. This normalization was anticipated, as the initial post-pandemic excitement around leisure and entertainment began to level off, and alternative entertainment options became accessible.

b. Footfall:

During the year under review, Nicco Park attracted 12.24 lakh visitors, with 4.78 lakh enjoying the thrills of the waterpark and 5.57 lakh exploring the attractions of the main park.

c. Profitability:

Throughout the fiscal year under review, your company demonstrated strong financial performance, achieving a Standalone Profit Before Tax (PBT) of Rs. 2,876 lakhs and a Profit After Tax (PAT) of Rs. 2,088 lakhs. These figures reflect not only the effectiveness of our operational strategies but also the unwavering confidence and loyalty of our patrons, who continue to support and trust in our brand.

d. Other Recreational Activity, Food & Beverage and Nicco Super Bowl

During the fiscal year under review, income from other recreational facilities amounted to Rs. 580 lakhs. The food and beverage segment contributed Rs. 1,099 lakhs, while waterpark rental sales generated Rs. 274 lakhs.

e. Consultancy, Contract and Sale of Ride Components

In the fiscal year under review, your company managed several ongoing projects, generating an income of Rs. 218 lakhs. These projects reflect our dedication to expanding our parks, rides, and facilities to meet the increasing demand for leisure and entertainment experiences.

Looking ahead, we are optimistic about attracting inquiries from potential clients interested in developing their own parks, rides, or recreational facilities. Leveraging our expertise and proven track record, we aim to offer comprehensive solutions and support to help them build successful ventures.

We believe that our strong reputation and the success of our current projects will draw new clients, creating opportunities for growth and collaboration in the amusement park industry. Our team is committed to providing exceptional service and value, ensuring client satisfaction and paving the way for future business prospects.

E. OUTLOOK

As we look to the future, our company is well-positioned to capitalize on key trends shaping the amusement park industry in India. The rising demand for family entertainment, driven by increasing disposable incomes and urbanization, presents significant opportunities for growth. We are committed to enhancing our offerings by adopting cutting-edge technologies such as virtual reality (VR) and augmented reality (AR) to create more engaging and innovative attractions.

Recognizing the importance of safety and hygiene in the post-pandemic landscape, we will continue to implement stringent measures that ensure visitor confidence and comfort. Sustainability remains a key focus for us, and we are dedicated to incorporating eco-friendly practices across our operations. From water conservation and renewable energy use to waste management, our goal is to appeal to environmentally-conscious visitors while reducing our ecological footprint.

We also plan to diversify our offerings by integrating water parks, theme-based attractions, retail and dining options, providing a comprehensive and unforgettable entertainment experience for our guests. Digital integration will play a crucial role in enhancing operational efficiency and customer satisfaction, with an increased emphasis on digital tools for ticketing, queue management and personalized experiences.

Strategic partnerships and collaborations will continue to drive our growth, as we explore alliances with international brands, entertainment companies and media franchises to bring new and exciting attractions to our parks. In line with the rising trend of experiential tourism, we aim to create unique, immersive experiences that resonate with our visitors.

Overall, we are confident that our proactive approach, combined with our commitment to innovation, sustainability, and customer satisfaction, will position us for continued success and growth in the evolving amusement park industry.

F. Risks and Concerns

The Audit Committee plays an essential role in safeguarding the companys interests by meticulously overseeing and managing risks on behalf of the Board of Directors. Through comprehensive reports and close collaboration with the management team, the Committee consistently assesses and aligns the companys business strategy with its risk management objectives. By developing and enforcing robust guidelines, policies, and procedures, the Committee takes a proactive approach to mitigating key risk areas, including credit, liquidity, funding and market risks. Additionally, it remains vigilant in protecting the companys reputation, ensuring both short-term stability and long-term success.

Safety remains our top priority, particularly concerning the well-being of our visitors. We are committed to maintaining the highest standards of safety across all our rides and attractions. Our in-house engineering team conducts daily, thorough inspections to ensure the operational safety of every ride, addressing potential issues promptly.

To further reinforce our safety protocols, we engage leading third-party inspection firms, such as Westlakes Engineering Private Limited (UK), TUV India Pvt. Ltd for periodic assessments. These independent experts bring a wealth of knowledge and adhere to stringent industry standards, providing an additional layer of assurance to our safety measures.

By continuously upholding our commitment to risk management and safety through rigorous oversight, daily inspections, in-house expertise and independent evaluations, we ensure that our business operations remain stable and that our visitors can have complete confidence in the quality and safety of our offerings.

G. Internal Control Systems and their Adequacy

Your company has established robust internal financial control systems that cover every facet of its operations. These systems are crafted to ensure adherence to company policies, protect assets, prevent and detect fraud and errors, maintain accurate accounting records, and provide timely, reliable financial information.

To bolster these controls, your company employs both internal and external auditors, staying aligned with the latest industry best practices. The Independent Audit Committee of the Board plays a crucial role in overseeing and assessing the effectiveness of these internal financial controls. By maintaining these comprehensive systems, your company is committed to upholding the highest standards of corporate governance and financial management.

Recognizing the importance of transparency, accuracy, and reliability in financial operations, your company is dedicated to sustaining stakeholder trust and operating responsibly and sustainably. The internal financial control systems are regularly reviewed and refined to stay at the forefront of industry practices. Through meticulous monitoring, evaluation, and adherence to established policies, the company ensures effective risk management and the integrity of its financial operations.

H. Operational & Financial Performance

(a) Operational Performance

The operational success of our amusement park is fundamentally linked to the number of visitors we welcome each year. In the financial year 2023-2024, we observed a 15% reduction in footfall, with the number of visitors declining from 14.45 lakh in 2022-2023 to 12.24 lakh in the year under review. This shift reflects a normalization of attendance, returning to pre-COVID levels after an exceptional increase in the previous year. The surge in 2022-2023 was largely fueled by the pent-up demand for leisure and entertainment activities following the pandemic, as people eagerly sought out recreational experiences. For the fiscal year 2023-2024, the company recorded a total income of Rs. 8,348 lakhs. Despite the drop in footfall, the company achieved a Standalone Profit Before Tax (PBT) of Rs. 2,876 lakhs and a Profit After Tax (PAT) of Rs. 2,088 lakhs. On a consolidated basis, PBT and PAT reached Rs. 3,379 lakhs and Rs. 2,476 lakhs, respectively.

To further enhance the entertainment experience, Nicco Park introduced two exciting new attractions: the "Aqua Drop" and "Aqua Curl," inaugurated on April 7, 2024. The Aqua Drop offers a heart-pounding experience with a sudden drop and high-speed descent, while the Aqua Curl provides a thrilling ride with twists and turns, designed for safety and excitement. These additions are expected to significantly boost visitor satisfaction and support the parks continued growth and success.

(b) Financial Performance

In the fiscal year 2023-2024, your company achieved a total income of Rs. 8,348 lakhs, reflecting a modest 6% increase compared to Rs. 7,905 lakhs in the previous year. This growth underscores our resilience and ability to navigate market dynamics effectively. Income from entry and rides contributed Rs. 5,091 lakhs, up from Rs. 4,874 lakhs in the previous year. While income from other recreational facilities amounted to Rs. 580 lakhs, a slight decrease from Rs. 728 lakhs in the prior year, the food and beverage segment added Rs. 1099 lakhs, compared to Rs. 1118 lakhs last year. Additionally, rental sales at the waterpark generated Rs. 274 lakhs, improving from Rs. 264 lakhs in the previous year. Other income increased significantly to Rs. 415 lakhs, compared to Rs. 242 lakhs in the previous year, and project income rose to Rs. 218 lakhs from Rs. 63 lakhs, marking a notable enhancement in this segment. Despite a decline in footfall, your company achieved a Standalone PBT (Profit Before Tax) of Rs. 2,876 lakhs and a PAT (Profit After Tax) of Rs. 2,088 lakhs. On a consolidated basis, the PBT and PAT were Rs. 3,379 lakhs and Rs. 2,476 lakhs, respectively, reflecting our strong financial management and operational efficiency.

Furthermore, the Board of Directors declared and paid four interim dividends during the year, distributed at rates of 50% (0.50 paise per share), 30% (0.30 paise per share), 20% (0.20 paise per share), and 50% (0.50 paise per share) for the first, second, third, and fourth quarters, respectively. The total interim dividend payout for the financial year 2023-2024 amounted to Rs. 7,02,00,000, representing a 150% payout per equity share (1.50 paise on a share of par value Re. 1 each).

I. Human Resources Management

The HRM team has been instrumental in managing the companys human capital, with a strong focus on talent acquisition, development, and retention to drive organizational growth and achieve strategic goals. Emphasis was placed on fostering a positive work environment, enhancing employee well-being, and promoting work-life balance through various employee engagement and wellness initiatives. Significant efforts were also made in training and development programs to upskill our workforce, ensuring they are well-equipped to meet the evolving demands of the industry. Additionally, the team actively addressed employee concerns, ensured compliance with labour laws, and maintained healthy employee relations. As of March 31, 2024, the company employed 226 individuals, and we are pleased to report that the industrial relations environment remained peaceful throughout the year.

J. Details of Key Financial Ratios

Sl. No.	Ratios	Year 2023-2024	Year 2022-2023	% changes Inc./(dec)	Reason for variation over 25%
(i)	Debtors turnover ratio	7.67	10.70	(28.31)	As against increase in Credit Sale of Rs.
	(Credit Sales or income / Average receivables)				33.55 Lakhs i.e by 2.66% , the receivable
					amount increased by Rs. 51 Lakhs i.e. by
					43.22 %
(ii)	Inventory Turnover ratio	19.68	24.41	(19.39)	Within 25%
	(COGS / Average Inventory)
(iii)	Interest coverage Ratio	-	-	-	Company is Debt Free
	(Earning before Interest & Tax / Finance cost)

 

Sl. No.	Ratios	Year 2023-2024		Year 2022-2023	% changes Inc./(dec)	Reason for variation over 25%
(iv)	Current Ratio		3.02	2.27	32.79	Current Asset increased by Rs. 2309
	(current Assets/ Current Liabilities)				Lakhs mainly because of Increase in
						Term Deposit for Rs. 24 Crore, where
						as the Current Liability increased to
						the extent of only Rs. 366 Lakhs.
(v)	Debt Equity Ratio		-	-	-	There is no borrowing by the Company.
	(Borrowings + Lease Liabilities/ Equity)
(vi)	Operating Profit / (Loss) Margin (%)	0.34		0.38	(8.22)	Within 25%
	(Earning before Interest & Tax / Total
	Turnover)
(vii)	Net Profit Margin (%)	0.25		0.28	(10.92)	Within 25%
	(Profit after tax ]/ Total Turnover)
(viii)	Return on Net Worth (%)	0.29		0.37	(22.13)	Decrease in Profit After Tax reduced by
	(Profit after tax ]/ Net worth)					Rs. 131 Lakhs due to increase in Current
						Tax by Rs. 110 Lakhs in comparison to
						last year where in benefit of brought
						forward loss for Rs. 336 Lakhs was
						availed. On the other hand Net
						Worth increased by Rs.1,259 Lakhs.
						Nonetheless, the % of swing is less
						than 25.

K. Cautionary Statement

The Management Discussion and Analysis Report contains forward-looking statements, including projections, estimates and expectations, which have been made with sincere intent. However, it is important to recognize that various unforeseen factors may emerge, leading to outcomes that differ from those anticipated by the Directors in their assessment of future performance and outlook.

The industry information provided within this report has been sourced from a variety of published and unpublished materials. While every effort has been made to ensure the accuracy, reliability and completeness of this information, it is acknowledged that absolute certainty cannot be assured.

Stakeholders are advised to consider these inherent uncertainties and the potential impact of unforeseen events when interpreting the statements and data presented in this report. The company remains committed to transparency and will provide updates as necessary to reflect any significant changes in its future performance and outlook.

	For & On behalf of the Board of Directors
	NICCO PARKS & RESORTS LIMITED
	S/d	S/d
	Anand Chatrath	Rajesh Raisinghani
	Independent Director	Managing Director & CEO
	DIN:-00234885	DIN: -07137479
Registered Office:
‘Jheel Meel,
Sector IV, Salt Lake City,
Kolkata – 700 106
Date: August 09, 2024