touchwood entertainment ltd share price Management discussions

GLOBAL EVENT INDUSTRY Overview

The Global Events Industry Market size was valued at USD 886.99 Billion in 2020 and is projected to reach USD 2,194.40 Billion by 2028, growing at a CAGR of 13.48% from 2021 to 2028. The Asia events industry size was valued at $273.8 billion in 2018, and is estimated to reach $567.10 billion by 2026, registering a CAGR of 9.2% from 2019 to 2026. The global events industry is segmented based on type, revenue source, organizer, age group, and region. Depending on type, the industry is divided into music concerts, festivals, sports, exhibitions & conferences, corporate events & seminars, and others. On the basis of organizer, it is categorized into corporate, sports, education, entertainment, and others.

Outlook

The rise in the number of sponsors across the globe brings a hike in the Event industry market. Sponsors are considered as a backbone of the event market because it is the initial source of funding to host the events. Growing corporate culture is parallelly also growing the Event industry market. Big corporate houses host several events annually according to their event calendar. Companies across the globe are increasing looking for introducing new products and technology to the market to gain higher competitive edge. This, results in various trade shows, new product launch events, product exhibitions, and others at a large scale to facilitate the interaction of the potential customers as well as investors. Due to this, the event industry is experiencing strong growth. The surge in the use of social media mainly due to hike in the sales of the smart phones in combination with increased penetration of the internet is pushing the growth of the event industry.

INDIAN EVENT INDUSTRY Overview

The event industry is an integral part of India?s growing economy. After two years of stagnation, 2022 was a comeback year for the sector as a whole. As we move ahead in 2023, the future of the sector looks bright. The Indian event industry is a dynamic and rapidly growing sector that encompasses a wide range of events and activities, including corporate events, weddings, conferences, exhibitions, festivals, entertainment shows, and more. With its diverse culture, rich heritage, and technological advancements, India offers a fertile ground for event management companies and professionals to create memorable experiences. The industry involves meticulous planning, creative conceptualization, flawless execution, and a deep understanding of cultural nuances to deliver successful events. From small-scale gatherings to large-scale extravaganzas, the Indian event industry caters to a variety of needs and preferences, making it a significant contributor to the economy and a platform for showcasing creativity and innovation. The market has a presence of various small and large-scale vendors, making it a highly fragmented market. With the countrys unorganized event and organization sector being the same size as the market studied, the competitive rivalry among the organizers is moderately high. With the growing economic condition of the country and consumer markets, the need for globalization is pushing the demand for a significant number of B2B and B2C events/exhibitions in the country.

Market Size

The Indian Event and Exhibition Market size is expected to grow from USD 4,748.20 million in 2023 to USD 8,709.61 million by 2028, at a CAGR of 12.90% during the forecast period (2023-2028). India has a vast consumer market, and it offers an unparalleled opportunity for enterprises to invest and expand in the country. According to the India Brand Equity Foundation and Retailers Association of India, the retail market size across India will reach USD 1,750 billion by 2026.

Exhibitions are among some of the powerful enablers of trade and economic growth globally. Various nations in Europe and Asia used exhibitions as business platforms to propel their regions economic development and investments.

In line with Indias economic development, the exhibitions industry has seen rapid growth. Today, India is one of the prime exhibition destinations globally.

Event planning goes hand in hand with the marketing efforts of the organizers. In 2022, the live events market across India was valued at 73 billion Indian rupees. It was estimated to reach 134 billion rupees by 2025, showing a compounded annual growth rate of 22 percent.

COMPANY?S OVERVIEW

Touchwood, has a wide range of services viz. event management, wedding planning, wedding d?cor, stage show organizer, renting of property for events like corporate seminars and weddings etc. Stall preparation for exhibition, destination weddings, resulting in to diversified area coverage due to which our Company is not restricted to any single category of clients. Further all the services we offer has a peak season once in a year this helps the Company to reap the benefit of season sale. Our Political Consultancy and Activation services being expanded over different states allows us to capture political consultancy and activation support service contracts from different political parties and individual candidates throughout the year. We have a wide range of client base varying from big corporate ranging from all the sectors of business viz. manufacturing, real estate, service sector, media and entertainment, hospitality, FMCG, Education etc. as well as political parties or politicians and our wedding business is not restricted to any type of client.

Having established our company as a reputable player in the wedding industry for over two decades positions us to capitalize on a wealth of opportunities. Our experience, expertise, and reputation provide a solid foundation for growth and success in the sophisticated wedding market. With our vast experience in this industry, we have witnessed great potential in event management and political activation business.

FINANCIAL PERFORMANCE

The state of Company?s affairs for the financial year ended the 31^st March, 2023 as compared to the previous year are as under:

(In Lakhs)

	Standalone Profit & Loss Statement	Consolidated Profit and Loss Statement
Particulars	As on 31st	As on 31st	Y-o-Y (%)	As on 31st	As on 31st	Y-o-Y (%)
	March 23	March 22		March 23	March 22
Revenue	3605.73	2662.36	35.43%	3670.94	2662.36	37.88%
Other Income	12.61	15.74	-19.86%	9.80	15.74	-37.72%
Total Income	3618.35	2678.09	35.11%	3680.74	2678.09	37.44%
Employees Benefits
Expenses	267.80	201.75	32.74%	329.15	201.75	63.15%
Other Expenses	2929.94	2127.77	37.70%	2978.98	2129.54	39.89%
EBITDA	420.61	348.57	20.67%	372.60	346.80	7.44%
EBIDTA Margin (%)	11.67%	13.09%	-142 bps	10.15%	13.03%	-288 bps
Depreciation &
Amortization Expense	50.87	57.55	-11.60%	61.29	57.55	6.49%
Financial Costs	5.54	12.20	-54.55%	5.59	12.20	-54.20%
Profit Before Exceptional
Item and Tax	364.20	278.83	30.62%	305.73	277.06	10.35%
Exceptional Item	51.15	17.29	195.73%	51.15	17.29	195.73%
Profit Before Tax	415.34	296.12	40.26%	356.87	294.35	21.24%
PBT Margin (%)	11.52%	11.12%	40 bps	9.72%	11.06%	-134 bps
Tax	115.96	80.39	44.25%	113.1	83.25	35.86%
Profit After Tax	299.38	215.73	38.77%	243.77	211.10	15.47%
PAT Margin (%)	8.30%	8.10%	20 bps	6.64%	7.93%	-129 bps
Other Comprehensive
Income	9.92	17.59	-43.60%	9.92	17.59	-43.60%
Total Comprehensive
Income	309.30	233.33	32.56%	253.69	228.70	10.93%
EPS	3.04	2.29	-	2.49	2.25	-

Key Ratios formulas:

Gross profit margin = Gross profit/Revenue from operations.

EBITDA Margin = Earnings before interest, tax, depreciation and amortization (EBITDA)/Revenue from operations.

Profit before exceptional item & tax margin = Profit before exceptional item & tax/Revenue from operations.

Profit before tax margin = Profit before tax (PBT)/Revenue from operations. Profit after tax margin = Profit after tax (PAT)/Revenue from operations.

FINANCIAL PERFORMANCE OF SUBSIDIARIES

A. MakeMeUp Private Limited (Subsidiary)

The state of Company?s affairs for the financial year ended the 31^st March, 2023 as compared to the previous year are as under:

(In Lakhs)

Particulars	FY 2022-2023	FY 2021-2022
Share capital	1.10	1.00
Reserves & surplus	38.06	(1.19)
Total assets	142.47	106.79
Total Liabilities	142.47	106.79
Investments	-	-
Turnover	65.20	-
Profit/(Loss) before taxation	(30.65)	(1.16)
Provision for taxation	-	-
Profit/(Loss) after taxation	(30.65)	(1.19)

B. WedAdvisor Solutions Private Limited (Wholly-Owned Subsidiary)

The state of Company?s affairs for the financial year ended the 31^st March, 2023 as compared to the previous year are as under:

(In Lakhs)

Particulars	FY 2022-2023	FY 2021-2022
Share capital	1.00	1.00
Reserves & surplus	(27.99)	(1.19)
Total assets	31.26	27.27
Total Liabilities	31.26	27.27
Investments	-	-
Turnover	-	-
Profit/(Loss) before taxation	(27.82)	(1.16)
Provision for taxation	-	-
Profit/(Loss) after taxation	(27.82)	(1.16)

ELEMENTS FOR GROWTH: A PROVEN FORMULA FOR OUR SUCCESS

At Touchwood, we believe that growth is not just a goal; its a journey fueled by strategic vision, dedication, and a commitment to excellence. Our approach to growth encompasses a set of essential elements that guide us toward continuous advancement and innovation. These elements form the cornerstone of our success story:

Client-Centric Approach: Our clients are the heart of our business. We prioritize understanding their unique needs, challenges, and aspirations. By aligning our efforts with their goals, we foster trust, loyalty, and long-term partnerships that drive mutual growth.

Innovative Thinking: We encourage creative thinking across our team, challenging conventional norms to bring fresh perspectives to every event. This mindset allows us to deliver extraordinary and unforgettable experiences.

Empowered Leadership: Effective leadership is the compass that guides our journey. We empower our leaders to make informed decisions, inspire their teams, and cultivate an environment where everyones potential is harnessed to its fullest.

Operational Excellence: Every detail counts. We meticulously plan, execute, and review every aspect of our events. Our dedication to operational excellence guarantees that our events run seamlessly, leaving lasting impressions on all who attend.

Passion for Excellence: Excellence is our standard, not an exception. We approach every project with unwavering passion, striving to surpass expectations and set new benchmarks for ourselves and the industry.

These elements, woven into the fabric of our organization, propel us forward on our journey of growth. They define who we are, how we operate, and the remarkable experiences we deliver. At Touchwood, were not just orchestrating events; were shaping unforgettable moments, building enduring relationships, and embracing every opportunity for growth that comes our way.

LATEST TRENDS IN EVENT MANAGEMENT

The event industry is witnessing a resurgence in the popularity of in-person events, as people yearn for face-to-face interactions and the tangible experiences they provide.

A Hybrid model of event management, that is the perfect combination of the benefits of the virtual space along with the accessibility and familiarity of on-ground events is something that the industry has shifted towards since the pandemic.

AI has a role to play from the time of conceptualization of events till the organizers collect feedback.

Live streaming and on-demand content have become the top event trends in 2023, enabling event professionals to expand their reach and make their events more accessible to a wider audience. Live streaming provides an opportunity to bridge the gap between physical and virtual attendees, creating a more inclusive and immersive experience. With on-demand content, event professionals extend the lifespan of their events and enable attendees to access and revisit the content at their convenience. This flexibility accommodates various schedules and time zones, allowing participants to catch up on missed sessions or revisit valuable content whenever they prefer Crowdsourcing is a norm today. Old is no longer gold, and so creativity, innovation and up skilling is where the future of the event looks most promising.

Venues are no longer stadiums and convention centers but have opened up a whole new world on virtual platforms.

Various applications, tools and websites offer a range of features, making it easily accessible, navigable, cost and time efficient and convenient for both the event organizers as well as the customers.

Real time data is being used for deciding shape and course of events.

Events are playing an increasingly important role in the Marketing and Communications mix for all companies. Today, Event Management has become an integral part of any Marketing plan. A large number of companies have already recognized the benefits of Direct Marketing through events. Events are considered as a means to Launch, Advertise or Build a brand. These events also act as a bridge to remove the communication gap. These events can be seen as an interactive experience among different employees working in various industries.

OUR RESPONSE TO LATEST TRENDS

At Touchwood, we believe that staying ahead of the curve is not just a choice, but a responsibility we hold towards our clients and their attendees. The landscape of event management in India is evolving rapidly, and we have wholeheartedly embraced the latest trends to create exceptional and impactful experiences. Heres how were responding to the dynamic trends shaping our industry: In the era of virtual connectivity, weve harnessed the power of virtual and hybrid events to break geographical barriers and engage audiences seamlessly. Our team has mastered the art of crafting virtual experiences that mirror the magic of in-person events, ensuring attendees remain captivated from start to finish.

Sustainability isnt just a buzzword; its our commitment. Were at the forefront of eco-friendly event management, employing sustainable practices that resonate with todays conscious audience. From zero-waste solutions to energy-efficient setups, our events are designed with the planet in mind. One-size-fits-all is a concept of the past.

Our events are customized to cater to each attendees preferences and interests. Through data-driven insights, we create personalized event journeys that leave a lasting impact and forge stronger connections.

Safety and convenience go hand in hand.

Our events feature contactless solutions for smooth check-ins, transactions, and interactions. Attendees can enjoy the event experience with peace of mind.

We understand the power of influencers in shaping perceptions. By collaborating with respected voices, we amplify our events reach and credibility, ensuring our message resonates with a wider audience. Indias diversity is our canvas. We celebrate the rich tapestry of cultures by curating events that pay homage to traditions, languages, and customs, ensuring that every attendee feels at home.

We blend global trends with Indias essence. Our events reflect contemporary international influences while resonating deeply with the Indian audience.

Change is inevitable, and we thrive on it.

Our ability to adapt swiftly ensures that our strategies remain aligned with shifting trends, keeping us at the forefront of the industry.

Our response to the latest trends is a testament to our dedication to creating remarkable experiences that captivate, resonate, and inspire. By embracing these trends, were not just shaping events; were shaping memories that last a lifetime.

SWOT ANALYSIS Strengths:

Experience and Reputation: Over two= decades in the industry have established= our company as a reputable and reliable= player, instilling trust in clients.

Diverse Service Portfolio: Our broad= range of services, from event management,= wedding planning, wedding d?cor to stage= show organizing, showcases versatility and= meets varied client needs.

Vendor Relationships: Strong connections= with vendors and suppliers ensure= seamless event execution and access to= quality resources.

Strong Client Relationships: Personalized= solutions and a client-centric approach led

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Experienced Team: We have a skilled and experienced team that brings diverse expertise to event planning and execution.

Weaknesses:

Dependence on Seasonality: Relying on peak seasons for various services can lead to revenue fluctuations and operational pressure during off-peak periods.

Limited Global Reach: While established locally, expanding into new markets may pose challenges due to unfamiliarity with different regions.

Intense Competition: The event management industry is competitive, and sustaining our market share requires consistent innovation and differentiation.

Opportunities

Virtual and Hybrid Events: The rise of virtual and hybrid events post pandemic presents opportunities for our company to innovate and expand into new markets.

Niche Specialization: Specializing in a specific event type like weddings, allows our company to expertise in the field and target the required market.

Sustainability and Wellness: The demand for eco-friendly and wellness-focused events is likely to grow, providing opportunities for the Company to offer environmentally conscious and health-oriented experiences.

Personalized Experiences: Customized event experiences tailored to individual preferences will helps the company to differentiate itself from other event management companies and create more meaningful interactions.

Educational Impact: Expanding Touchwood Wedding School can contribute to skill development and_LQGXVWU\_HGXFDWLRQ__FUHDWLQJ_D_SRRO_RI_ ZHOO_WUDLQHG_SURIHVVLRQDOV__

Threats:

Various approvals & legal paperwork required: A lot of hurdles in the form of rules, for which organizers need to get permissions from the concerned multiple authorities is another challenge for the industry and becomes tedious when there are deadlines to be met.

Technological Disruption: Rapid technological advancements may require continuous investments to keep up, potentially affecting profitability.

Interlinked with other Industries: The event management companies work a lot in co-operation with different industries such as food, beverage, hospitality and entertainment and thus is quite dependent on each of them. The volatility in any one industry could therefore affect the event management service industry directly and hence could prove as a restrain at times.

ROI Measurement Standard: Brands are likely to increase their expenditure on experiential marketing if the return on their spends could be demonstrated in standard manner. Due to unique nature of each event, there is no universally accepted standard to measure ROI. We need to define standards to measure performance against client expectations (such as sales, trial, awareness, database creation etc.).

Advent of other media: Other media invading the activation space is a major threat. Television, radio and print media creating activation teams for their clients with incentive of promotion through their media channels is a real major threat.

This SWOT analysis provides an overview of our companys internal strengths and weaknesses, as well as external opportunities and threats. Leveraging our strengths, addressing weaknesses, seizing opportunities, and mitigating threats is essential in charting a successful path for our companys growth and sustainability.

SEGMENT WISE OR PRODUCT WISE PERFORMANCE

Our Company specializes in Events Management, offering all of our clients a complete variety of event facilities, ranging from event planning & marketing to production services for the events. We at Touchwood Entertainment Limited acknowledge that we stand as an extension of our clients? professional appearance; therefore, we know that our employees? appearance, professionalism, performance, approach, presentation and commitment levels are of great significance.

CORPORATE OUTLOOK

The year 2023 is going to be a revolutionary time for the events industry. The past few years witnessed the event sector transitioning into its new phase amidst the restrictions posed by the pandemic. From in-person events to virtual, and hybrid events-the industry has undergone some big makeover since 2020. The event industry is witnessing a resurgence in the popularity of in-person events, as people yearn for face-to-face interactions and the tangible experiences they provide. While virtual events have played a significant role in recent times, the dominance of onsite gatherings is becoming more prominent.

RISKS AND CONCERNS

In any business, risks and prospects are inseparable. As a responsible management, the Company?s principal endeavor is to maximize returns. The Company continues to take all steps necessary to minimize its expenses through detailed studies and interaction with experts.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

We have a proper and adequate system of internal control including internal financial controls. There is an Audit Committee, headed by a non-executive independent director, inter-alia, to oversee the Company?s financial reporting process, disclosure of financial information, and reviewing the performance of statutory and internal auditors with management. The internal control system, including internal financial controls of the Company, is monitored by an independent internal audit team, which encompasses examination/ periodic reviews to ascertain adequacy of internal controls and compliance to Company?s policies. Weaknesses noted along with agreed upon action plans are shared with audit committee, which ensures orderly and efficient conduct of the business and effectiveness of the system of internal control. The audit function also looks into related party transactions, preventive controls, investigations, as well as other areas requiring mandatory review per applicable laws. The powers of the Audit Committee, inter-alia, include seeking information from any employee, obtaining outside legal or other professional advice, and investigating any activity of the Company within the committee?s term of reference.

The Company?s internal audit department verifies the information of the financial statements as well as the compliance with the policies to maintain accountability and ensuring controls are in place to safeguard of all its assets and correctness of accounting records. The internal audit department shares regular updates regarding the work done, coverage, weaknesses noted and other relevant issues with appropriate management levels including Audit Committee. Observations/ weaknesses noted from time to time are suitably acted upon and followed up at different levels of management. The internal control is supplemented by an extensive program of audits and periodic review by the management.

HUMAN RESOURCES

Human resources are the most critical element of Touchwood. The company strives towards attracting and retaining the best talent required for the business to grow. The Company believes and recognizes that its employees are a vital resource in its growth and to give competitive edge in the present business scenario. The Company takes pride in the commitment, competence and dedication shown by its employees in all areas. Professional with required amount of experience and knowledge are hired on need-to-need basis by the Company. The human capital of the company ensures that the employees should work in such a way which will leverage them both personally as well as professionally. Its focus is to ensure a transparent, safe, healthy, progressive and engaging work environment which is aimed at creating leaders of the future. Employees have a sense of belongingness and feel empowered in driving business profitability.

The Industrial relation of the Company with various clients, suppliers, financial lenders and employee is cordial. There are total 16 employees on the payroll of the Company.

		For and on behalf of the Board of Directors
		Touchwood Entertainment Limited
	Vijay Arora	Manjit Singh
	Whole-Time Director	Chairman & Managing Director
	DIN: 00996193	DIN: 00996149
Place: New Delhi
Date: 1st September, 2023