Amusement Park Industry

twenty-second May, 2010 INDIAN AMUSEMENT position INDUSTRY Highlights SECTORAL REPORT The frolic labor in India is at a maturation stage currently with to a greater extent and more ontogenesiss misfortune in this constancy each(prenominal) across the country. The size of the Indian Amusement snip argument is estimated to be around Rs 4000 crores and is estimated to grow by 10% per penny per annum till 2010. The cheer and case common effort is deemed to be deserving Rs. one C00 crores in India by 2020. Janaki Rao. U Analyst rectitude interrogation Desk email& iodinness hundred sixtyprotected com contemporaryly for a population of 1. 15 billion in the country, there be only 120 sport put and 45 Family delight Centers. This indicates that the growing authorityity of Indian amusement and theme park manufacture is substantial. Global leading in cheer place and attractions deal Universal Studios, Disney, Sony and Ripley fun atomic number 18 mull ing both over investments of billions of dollars in India considering the vast emf in this region.Private blondness funds ar excessively aggressively dedicating resources towards this celestial sphere. The Indian small and big players in the Amusement fabrication are spirit at the tremendous ripening potential of this intentness in the adjoining 5 years. Growth of Indias retail sector had been the main driving befool for the amusement industry in India. Globally, domestic and irrelevant tourists comprise more than 50% of the amount of money step at popular amusement park. merchant marine corridors wish well expressways and the Metro line are bringing an append name of mint closer to frolic hubs. The in high spirits growth potential of the industry in super populated India will boost touristry, genial infrastructural development as considerably as employment generation. The success and growth potential of this industry is resulting into the orgasm of naked as a jaybird manufacturers of amusement parks rides in India. V. S. R. Sastry Vice chairwoman Equity Research Desk 91-22-25276077 email& one hundred sixtyprotected com Dr. V. V. L. N. Sastry Ph. D. Chief Research Officer email&160protected com 1 22nd May, 2010 CONTENTS 1. domain Overview 2. Current Trends 3. indite of take three Indian Companies 4. SWOT Analysis 5.Conclusion 2 22nd May, 2010 1. Sector Overview Structure & angstrom unit Development The amusement and theme park industry in India is about two decades old and it is relatively new when compared to its store in USA & angstrom Europe. This industry found its roots in India during mid and late 1980s when a some innovative entrepreneurs took contest of pioneering few amusement parks in Delhi, Kolkata, Mumbai and Chennai. The growth in this industry started only in the delay decade and that happened possibly during the advent of globalization when economic potential of the social detonator began to be perceiv ed.A recent food market survey research shows that this industry in India is growing at a rapid pace and over 120 amusement parks and water supply parks are currently in operation in India. push through and through of them only 15% gouge be classified in the braggart(a) parks category, 30% as medium size parks and commensurateness 55% are small size local anaesthetic parks. Investments to the tune of Rs 10,000 crore are likely to flow into the domestic amusement and blank sector by 2020 with about 500 new parks are pass judgment to baffle up across the country.The Rs 4,000-crore Indian amusement and void industry expects clean investment of Rs 10,000 crore by the year 2020. In terms of employment generation, the new parks are likely to create jobs for six crore man-hours per month. It is estimated that the total capital investment made in the amusement and theme park industry in India till date, is more than INR 40 billion (excluding investment on land). The estimated a nnual revenue generated by this industry is approx INR 20 billion, at present, which is expected to grow to al close to three times by the year 2020 at a CAGR of over 11%. 22nd May, 2010 Amusement Parks are recreational facilities that offer a varied range of entertainment options ranging from theme parks to spine chilling roller coaster, 3D theater to goliath wheel, in a cluster format. These parks provide one-stop-shop leisure and entertainment solutions for the stainless family at one place and are a distinguish source of tourist attraction (domestic and foreign) and revenue generation for the State. The demand for entertainment options such as amusement parks, I-max, shopping malls are rapidly increasing across the kingdom.The key demand get downrs for the segments are rising base of oculus class, increasing disposable income, changing lifestyle, cultural shift and increasing ferocity to lead a holistic life with a balance of work at and leisure. Tourism- Amusement parks During the wear decade domestic tourism had cock-a-hoop 14% on an average and currently it is estimated at 527 cardinal. Out of this, the amusement park industry generated only 15 million footfall during last year. Globally, domestic and international tourists comprise more than 50% of the total footfall at popular amusement parks. We can, therefore, expect that there ould be multiply increase in footfall in amusement parks in India as the epic parks in India are gradually converting themselves to bigger destination parks with agreeitional investments following the foot steps of large global parks. before long for a population of 1. 1 billion in the country, there are only 120 amusement parks and 45 Family Entertainment Centres. This indicates that the growth potential of Indian amusement and theme park industry is substantial. The high growth potential of the industry in highly populated India will boost tourism, social infrastructural development as well as employment gen eration.The success and growth potential of this industry is resulting into the advent of new manufacturers of amusement parks rides in India. 4 22nd May, 2010 Today, Indian manufacturers can produce international standard persona products at a competitive damage for both the domestic and the global market. Both these flying fields ask easily potential. Amusement parks have non received their due credit for their enormous potential as an infrastructural facility for tourism. The amusement industry oecumenical is a very significant part of the tourism effort.In India, the tourism constitution does not address the needs and the potential of the amusement industry. As such, immediately the amusement industry in India receives no special incentives. Recreation Industry Amusement parks Recreation Industry is currently one of the most evoke sectors in India. The current market for leisure is estimated to cross USD 1 bn in next few years. The leisure industry mainly incorporat e of amusement park, malls family entertainment centers (FECs) and multiplexes. The present consumer base is estimated around 30 million people.At present there are around cc FECs in the Country and the itemise is expected to grow to 400 in the next twain of years. Amusement parks contri neverthelesse nearly 40% of the total leisure industry turnover. Through the years though there is a flushed growth, but at the same time it is burdened by local entertainment tax ranging from 10 to 25 per cent in unhomogeneous states. Further if whatever imposition of profound Tax like serving Tax will cripple the whole industry. The industry can absorb either of the taxes and not both, he stated.Further he urged to make amusement industry an integral part of tourism and development in India at the Central Government Level. Recreation Industry is currently one of the most exciting sectors in India. The current market for leisure is estimated to cross USD 1 bn in next few years. The leisure i ndustry mainly consist of amusement park, malls family entertainment centers (FECs) and multiplexes. The present consumer base is estimated around 30 million people. 5 22nd May, 2010 At present there are around 200 FECs in the Country and the number is expected to grow to 400 in the next couple of years.Amusement parks contribute nearly 40% of the total leisure industry turnover. retail- Amusement parks Growth of Indias retail sector had been the main driving force for the amusement industry in India. known Ten Amusement parks in India 1. Veegaland Park Situated at Pallikkara, this state of art Amusement Park is just 14kms away from Kochi/ cochin. administer over a whooping 24 earth of land, its 7 storey high Vintage Castle and Caterpillar village give a queen Tale atmosphere. The musical Fountains, flower gardens, water pool and water slides add to the attraction of the Veegaland Amusement Park. 6 2nd May, 2010 2. marine Park Ocean Park is ascertain at Gandipet, 20 km. from Hy derabad, in 20 acres of landscaped gardens, an amusement park that you havent seen the likes of stock-still in India. It is one of the initiative theme parks started in twin-cities and continues to be a great strike especially with children.But it is not the young ones alone who enjoy, even adults can have lots of fun here. It is a family amusement park offering a good mix of fun and thrills for people of all ages with water rideskiddies pool, flourish pool, water slides, dry rides- super loop, the 60 feet high ride, bumping cars, slam neglect etc. 7 22nd May, 2010 3. Ramoji Film urban center Ramoji Film City is the ultimate leisure destination for holidays, honeymooners, corporate conferences, events, theme parties, ad surmisal camps, family picnics and haughty weddings. this worldly concern s largest integrated film studio complex sensory(a)ing over 2000 acres of land. It was opened by the Film Producer Ramoji Rao in the year 1996. Its about 25 kms from the main city of Hyderabad and is open the 7 days of a week. The Film City Complex has urban landscapes of US and Australia as well as India.They have the Amazon regular army Base as the newest additions to the attractions of the Film City. 8 22nd May, 2010 4. childs play n food Village Fun N Food Village at Delhi was set up in the year 1993. Fun N Food Village is situated at Old Delhi-Gurgaon Highway which is just 3 kilometers away from the Delhi international airport. Fun N Food Village is for all ages of people. Fun N Food Village in Delhi was inaugurated by former(prenominal) President of India Giani Zail Singh. 9 22nd May, 2010 5. Essel serviceman Pan India Paryatan Pvt. Ltd. PIPPL) is the club holding EsselWorld Indias Largest Amusement Park and weewee body politic Asias Largest bailiwick Water Park. Pioneers in the entertainment and leisure industry, it was EsselWorld that pulled people out of the staid environment of conventional pleasure trips and unfolded beforehand them the exci ting new scenario of a complete leisure destination. A straggling complex on the coastal Gorai village in northwest Mumbai, The Island of Fun is sprawled over 64 acres and is a refreshing gateway to a whole new world of excitement and fun.The second phase in the expansion plans for PIPPL, Water Kingdom makes this twin park complex a complete destination by itself. Its never-before seen attractions set amidst unique architecture with international standard amenities and hygiene catapult Water Kingdom into a different league. It is the only, truly international water park recognize in India. 10 22nd May, 2010 6. disaster Island Sprawling over an sports stadium of 62 acres in North West Delhi, it has been made with the venture of Unitech Ltd and transnational Amusement Ltd. Its a 164 crore project with a water park and Planet Pogo.There are 26 rides in all and all of them have been imported supplied by leading European manufacturers such as Intamin, Moser and Zamperla, who suppl y rides to Disney, Universal Studios and Six Flags. The park is especially popular amongst children and teenagers. The entire Island consists of world class amusement Park, an adventure island and a water park. Retail Environment Metro Walk (Delhi) is spread across 2. 21 lakh sq ft and is anchored to the park. It overlooks a large lake which acts as a separator among the mall and the park.The Park has 26 rides spreading in an realm of 3. 5acres. 7. Entertainment City It is thought of as Disney Land of India the Entertainment City in Noida. Unveiled by former cricket captain and entrepreneur Kapil Dev, it spreads over a whooping 147 acre land with an investment of Rs 10 billion. Built over an area of 100 acres of land, the park has more then 30 rides, supplied from European manufacturers. The Entertainment City Park has three entertainment zones, one for kids, one for teenagers and one for families each with its own separate rides, attractions and food courts.In addition to this it also has a Shopping complex known as the Great IndiaThe Entertainment City is a is a joint venture between Unitech and International Amusement Limited, the promoters of Appu Ghar (Delhi). 11 22nd May, 2010 8. Nicco Park It is situated in the shopping center of the main City of Calcutta in Salt Lake its one of the most happening place for the kids and teenagers. The elders simply love to be here. Covering an area of 40 acres, it was opened in the year 1991. Jheel Meel was the previous name of the park. It was renamed in he year 1990 with the restructuring of the park. Its the only Amusing Park in the world which has got ISO 9002 certification. It draws a whopping 1. 5 million people every year. 9. Gujarat recognition City Gujarat Science City has been made with a view of give education in the form of entertainment. On one of its side, it has small village while on other side the suburban urban area reflects technological atmosphere. The Gujarat Science City has something diffe rent from others in the country. Visited by the former Indian President and Scientist Dr.J P Abdul Kalam it exhibits, mind blowing experience, models which can be worked upon, a showcase of virtual reality, activity corners, hands on labs and live demonstrations to provide an understanding of science and technology to the common man. 10. Platinum repairs The silent yet beautiful theme park of West Delhi is spreading at 14 acres of land. Big lawns here and the greenery calls people to view the shot beauty amongst the screaming voice of the city lights. Its a sanctuary cum Water Park. The beauty of the Park can be seen from the entree itself. It has a huge big entrance with the hugeness it looks more magnificent.The Platinum Resort is just a 30 minutes drive (25 km drive from Paschim Vihar, on Delhi-Rohtak Road, NH no. 10. Its a good place for family gatherings, parties and of traverse the entertainment of the entire family. 12 22nd May, 2010 13 22nd May, 2010 Current trends Amus ement parks seek uniform entertainment tax The Indian Association of Amusement Parks and Industries, apex body of the amusement parks, has desire uniformity in the entertainment tax being imposed by different states. The Association rues that the exorbitantly charged entertainment tax by some states is a study impediment in the growth of the industry in these regions. West Bengal, Punjab and Gujarat charge entertainment tax at 20%, 40% and 25% respectively, whereas the entertainment tax rate hovers around 5-15% in majority of the states. Real Estate companies plans to enter into this market Though the nonunionised players hold a majority role in the market, the organised players are also expanding their base. Groups like Nicco Parks, Zee group, Unitech Turner and various real domain companies are developing amusement parks in different regions. The foreign developers are also stepping into the Indian amusement industry through collaborations with Indian companies. 14 2nd May, 2010 V Guard group entered into amusement parks V Guard Group of companies, based in Cochin in Kerala, is negotiating with property owners in Mumbai and Chennai for starting amusement parks. The group, which is running Veegaland in Cochin and Wonderla near Bangalore, has identified a place near Chennai to start a watertheme and amusement park, but negotiations were still on. Growing transportation facilities transportation corridors like expressways and the Metro line are bringing an increasing number of people closer to entertainment hubs. To that extent, they trigger growth of formal means of entertainment.One major development witnessed in National Capital Region (NCR) over the last 4-5 years has been the expansion of Delhi Metro line. This process started in Central and horse opera parts of the city and is now on course to link southwest Delhi and Gurgaon. This has provided common man with a mode of transport that is both economical and convenient. While daily journeys like the ones to college or workplace have been alter the occasional weekend outing too has been made much simpler as a result of enhanced connectivity to popular entertainment destinations. 5 22nd May, 2010 Expansion of Metro rail project One of the first entertainment destinations, which is strategically located near Rohini Metro Station, was launched by Unitech. This project was launched preceding to the completion of the Metro line and has been mounty operational since December 2007. It comprises Adventure Island an amusement park and the Metro Walk MallThe expansion of Delhi Metro gives us reason to be very optimistic about future of our projects in Rohini, especially Adventure Island.While the city is dotted with malls and retail spaces this is one of the few amusement parks and hence we expect a significant increase in footfalls upon extension of Metro line to South Delhi and Gurgaon, as standoffishness will no longer be a prime consideration. Profile of top three Indian Co mpanies 1. Nicco parks resorts ltd NPRL was incorporated with the prime purpose of providing educative entertainment and wholesome recreation for the entire family simultaneously promoting tourism. NPRL presents a complete leisure package in an eco-friendly atmosphere with thrilling rides, eateries, sole(a) landscaping, and indoor sports.This amusement park offers all kinds of entertainment under one roof and handles its offerings with professional elan. Business area of the ships comp some(prenominal) At Nicco Park, it offers a wide range of rides and facilities, which the company manufactures in addition to setting up the operation of Amusement or Water Parks on jailor tail end. 16 22nd May, 2010 The company is associated with TUV, India (affiliated to TUEV, Germany) who commission an annual inspection of all its major rides along with manufacturing inspections for the new rides based on approved quality assurance plans.The company can offer overall consultancy to set-up and run Theme Parks successfully. At the market price of Rs. 70. 00, the stock trades at P/E of 15. 35 x and 12. 96 xs for the network of FY10E and FY11E respectively. Earning per share (EPS) of the company for the earnings of FY10E and FY11E is seen at Rs. 4. 56 and Rs. 5. 40 respectively for equity share of Rs. 10. 00 each. We propose BUY in this particular scrip with a target price of Rs. 85. 00 for specialty to foresighted term investment. Particulars net Sales (Rs. Mn. ) Net usefulness (Rs. Mn. ) EPS (Rs. ) FY08 214. 0 12. 80 2. 73 FY09 244. 00 21. 30 4. 56 % Chg. YoY 13. 59 66. 41 67. 03 17 22nd May, 2010 2. South Asiatic Enterprises Ltd South Asian Enterprises (SAENTER) is meshed in the business of setting up and running amusement parks and has ventured into the real estate and films. It was incorporated on Mar. 21, 1990 and came out with a existence issue on Mar. 30, 1994. Earlier known as South Asian Entertainment, it acquired its present name on Feb. 24, 1995. Ass ociate companies include VLS Capital, Gaurav Overseas Exports, chevvy Eye Plastic Industries, Pragati Moulders, M.P. Mehrotra (HUF), VLS Finance, VLS Securities, VLS Investments, VLS Asset Management, and VLS Investments Inc. (USA). The first park was set up in the city of Kanpur under the name and style of Mikky House. Other parks were set up in Lucknow and Ayodhya. In FY08, the company ventured into marketing of hide out products and execution of contracts for earthing and lightning protection systems. It has also ventured into television serials and film doing in collaboration with AUM Sportainment. Come December is a recent production. At the market price of Rs. 12. 6, the stock trades at P/E of -0. 14 x and 22. 59 xs for the earnings of FY10E and FY11E respectively. Earning per share (EPS) of the company for the earnings of FY10E and FY11E is seen at Rs. -0. 54 and Rs. 0. 53 respectively for equity share of Rs. 10. 00 each. We recommend enclose in this particular scrip w ith a target price of Rs. 20. 00 for Medium to Long term investment. 18 22nd May, 2010 Particulars FY09 FY10E % Chg. YoY Net Sales (Rs. Mn. ) Net hit (Rs. Mn. ) EPS (Rs. ) 7. 40 1. 87 0. 47 13. 03 -0. 54 76. 08 3. Mahindra Holidays Resorts India LtdMahindra Holidays Resorts India Limited was incorporated as a private limited company called Mahindra Holidays Resorts India Private Limited on September 20, 1996. The status of the Company was changed to a public limited company by a special resolution of the members passed at the annual familiar meeting held on January 29, 1998. The fresh certificate of incorporation consequent upon vicissitude was issued to the Company on April 17, 1998, by the Registrar of Companies, Tamil Nadu at Chennai. At the market price of Rs. 482. 00, the stock trades at P/E of 30. 2 x and 27. 92 x for the earnings of FY10E and FY11E respectively. Earning per share (EPS) of the company for the earnings of FY10E and FY11E is seen at Rs. 15. 69 and Rs. 1 7. 25 respectively for equity share of Rs. 10. 00 each. We recommend BUY in this particular scrip with a target price of Rs. 575. 00 for Medium to Long term investment. 19 22nd May, 2010 Particulars Net Sales (Rs. Mn. ) Net Profit (Rs. Mn. ) EPS (Rs. ) FY10 5101. 96 1178. 37 14. 44 FY11E 5694. 23 1307. 23 15. 69 % Chg. YoY 11. 61 10. 94 8. 66 SWOT Analysis Strengths Fastest growing sector High margins Growing foreign Investments Customers satisfaction Weaknesses Seasonal business Low entry fees No special incentives from govt 20 22nd May, 2010 Opportunities currently for a population of 1. 15 billion in the country, there are only 120 amusement parks and 45 Family Entertainment Centers. This indicates that the growth potential of Indian amusement and theme park industry is substantial. Transport corridors like expressways and the Metro line are bringing an increasing number of people closer to entertainment hubs. The Indian gaming market is on the path of maturity, income levels are rising and people want to have a fun life. The foreign companies reportedly touched in the Indian amusement parks market include Universal Studios, Time Warner and Disney. Growing tourism industry Growing retail market Threats/ Challenges Factors such as monsoon and cutting weather affect the industry and in a year, only 100 days are the peak season for the parks. Lack of uniform taxation Govt policies ascending material cost of equipment 21 22nd May, 2010Conclusion The high growth potential of the industry in highly populated India will boost tourism, social infrastructural development as well as employment generation. The success and growth potential of this industry is resulting into the advent of new manufacturers of amusement parks rides in India. Currently for a population of 1. 15 billion in the country, there are only 120 amusement parks and 45 Family Entertainment Centers. This indicates that the growth potential of Indian amusement and theme park indus try is substantial.Global leaders in entertainment parks and attractions like Universal Studios, Disney, Sony and Ripley Entertainment are mulling over investments of billions of dollars in India considering the vast potential in this region. Private equity funds are also aggressively dedicating resources towards this sector. The growth of the Indian deliverance will drive the Industry to, grow both vertically & horizontally. Vertically, in terms of the scale of investment and horizontally across the distance and the breadth of the country. The greatest growth potential is the enormous amount of inactive/under-utilised land in Indias hinterland.Hotels and resorts are already showing interest in developing existing plots into anything form small play areas to full scale theme or water parks. _______________________________________________________ Disclaimer This document disposed(p) by our research analysts does not constitute an offer or collecting for the purchase or sale of any financial instrument or as an official confirmation of any transaction. The information contained herein is from publically available data or other sources believed to be reliable but we do not represent that it is accurate or complete and it should not be relied on as such .Firstcall India Equity Advisors Pvt. Ltd. or any of its affiliates shall not be in any way responsible for(p) for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. 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