Nicco Parks & Resorts Ltd BSE Scrip Code:

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1 Nicco Parks & Resorts Ltd BSE Scrip Code: Other Leisure Facilities September 14, 2012 Equity Statistics Current Market Price Rs Week High / Low Rs. 24.4/15.2 Market Capitalisation Rs. crores 74.2 Free Float Rs. crores 29.0 Dividend Yield % 4.4 One Year Regression Beta Times 0.4 BSE Volumes Trend - Average = 3.73 Thousand in '000s Relative Returns Business Summary Nicco Parks & Resorts Ltd (Nicco) is in business of leisure and entertainment and runs an amusement park in Kolkata, West Bengal. The company has been running the amusement park for last 20 years and has catered to 2.6 crore guests till date. Nicco has also diversified into extending overall consultancy for setting up theme parks and water parks in addition to engineering, manufacturing and supply of amusement park s rides. Company also undertakes turnkey contracts for setting up composite amusement park and waterpark from concept to commissioning. Nicco reported net sales of Rs crore and adjusted net profit of Rs. 3.4 crores in FY12. Nicco is the only listed standalone amusement park company in India, it also offers consultancy services for setting up amusement parks (from planning, to building and maintaining amusement parks. During the last decade domestic tourism had grown at 14% on an average and currently it is estimated at 55 crore. Relative to this, the amusement park industry generated only 1.9 crore footfalls during last year. Globally, domestic and international tourists comprise more than 50% of the total footfall at popular amusement parks. Nicco is currently trading at 22.9 times FY12 EPS and 4.4 times FY12 adjusted book value Sensex Nicco Returns (%) 1M 3M 6M 1Yr Absolute -3% -5% -20% -30% Relative to Sensex -8% -12% -24% -36% Shareholding Pattern 100% 50% 0% Sep '11 Dec '11 Mar '12 Jun '12 Promoter DII FII Others Board of directors Person Role Mr.S.N.Menon NED, Chairman, Non Indepedent Mr.Rajive Kaul NED, Non Independent Mr.Sujit Poddar NED, Independent Mr. Anand Chatrath NED, Independent Vice-Chairperson, NED, Non Ms. Pallavi P. Kaul Independent Mr. Tapan Chaki NED,Independent Ms.Pritha Sarkar NED, Non-Independent Ramavatar Goenka NED, Independent Mr. Arijit Sengupta MD & CEO Source: AR and CARE Research Note: NED: Non Executive Director, MD: Managing Director, CEO: Chief Executive Officer. 1 Initiative of the BSE Investors Protection Fund

2 Background Nicco was incorporated in March, The company is a joint venture between Nicco Corporation (a well-diversified business conglomerate) and the Government of West Bengal represented by West Bengal Industrial Development Corporation (WBIDC) and West Bengal Tourism Development Corporation Limited (WBTDC). The company has set up and runs the 40 acres theme park in Kolkata, Eastern India s first theme and amusement park. The park was set up with technical advice from Blackpool Leisure and Amusement Consultancy Ltd., UK, and was inaugurated on October 13, It is the first amusement park, set up in India, which achieved ISO 9001 quality management certification from a well-known European Certifying Authority Business Overview Nicco derives its revenues from three segments 1) Park Operations (73.2% of total revenues in FY12) 2) Consultancy, Contract and Sale of Ride Components (6.2% of the total revenues in FY12) and 3) F&B and other recreational facilities (20.6% of the total revenues in FY12). Geographically, the company derives 100% of its revenues within India. Strengths and growth drivers Core strength is prior experience (over 20 years) in establishing and successfully running large amusement park. Nicco is the only listed standalone amusement park company in India. It also offers consultancy services for setting up amusement parks, from planning, to building and maintaining amusement parks. Risk and concerns Slowdown in the domestic economy which would lead to overall lower discretionary spend, would have an adverse impact the operations of the company. Opening up of new amusement parks by the competitors, within the region. Future strategy and expansion plans The company plans to expand its consultancy business to diversify its revenue stream. To expand overseas by opening amusement parks abroad through joint ventures. Industry outlook During the last decade domestic tourism had grown at 14% on an average and currently it is estimated at 550 million. Relative to this, the amusement park industry is estimated to have generated only 19 million footfalls during FY11. Globally, domestic and international tourists comprise over 50% of the total footfalls at popular amusement parks. With large parks in India gradually converting themselves to larger destination parks with resort facilities, following the footsteps of large global parks, footfalls in amusement parks in India is expected to see an increase, going ahead. Currently, Indian amusement park industry is estimated to be generating revenue of approximately Rs crores. Quarterly financials Quarter ended June 30, 2012 Income statement (Rs. crore) Q1FY13 Q4FY12 Q3FY12 Q2FY12 Q1FY12 Total income Net sales EBITDA Ordinary PAT (0.2) 1.3 Adjusted PAT (0.2) 1.3 Growth (Q-o-Q) (%) Growth in net sales (7.3) (39.5) Profitability ratio (%) EBITDA margin Adjusted PAT margin (2.8) Initiative of the BSE Investors Protection Fund

3 Financial analysis In FY12, Nicco reported net sales of Rs crores up 88.3% y-o-y. Total income witnessed a growth of 89.3% in FY12 Employee, selling and administrative expense constitute major portion of total expenditure. In FY12, these expenses as a % of net sales were at around 63%. The company reported EBITDA margins and adjusted PAT margins of 18.5% and 10.2%, respectively in FY12. The total debt as on March 31, 2012 was at Rs. 3.1 crores compared to an adjusted networth of Rs crores. The company consistently has had negative working capital (since last five years). The company has paid a dividend of Rs. 0.7 per share in FY12, resulting in a dividend yield of 4.4% at CMP of Rs per share. Annual financial statistics FY08 FY09 FY10 FY11 FY12 Income statement (Rs. crore) Total income Net sales EBITDA Depreciation and amortisation EBIT Interest PBT Ordinary PAT Adjusted PAT Balance sheet (Rs. crore) Adjusted networth Total debt Cash and bank Investments Net fixed assets (incl. CWIP) Net current assets (excl. cash, cash equivalents) (4.6) (3.0) (4.5) (4.9) (3.0) Per share data (Rs.) Adjusted BVPS Diluted EPS* DPS Growth (Y-o-Y) (%) Growth in total income (42.8) 89.3 Growth in net sales (41.1) 88.3 Growth in EBITDA (5.1) 61.0 Growth in adjusted PAT (10.2) 59.0 Growth in EPS* (10.2) 52.3 Key financial ratio EBITDA margin (%) Adjusted PAT margin (%) RoCE (%) RoE (%) Gross debt - equity (times) Net debt - equity (times) NM NM NM NM NM Interest coverage (times) Current ratio (times) Inventory days Receivable days Initiative of the BSE Investors Protection Fund

4 4 Initiative of the BSE Investors Protection Fund

5 DISCLOSURES Each member of the team involved in the preparation of this grading report, hereby affirms that there exists no conflict of interest that can bias the grading recommendation of the company. This report has been sponsored by the BSE Investors Protection Fund. DISCLAIMER CARE Research, a division of Credit Analysis & REsearch Limited [CARE] has taken utmost care to ensure accuracy and objectivity while developing this report based on information available in public domain or from sources considered reliable. However, neither the accuracy nor completeness of information contained in this report is guaranteed. Opinions expressed herein are our current opinions as on the date of this report. Nothing in this report can be construed as either investment or any other advice or any solicitation, whatsoever. The subscriber / user assumes the entire risk of any use made of this report or data herein. CARE specifically states that it or any of its divisions or employees do not have any financial liabilities whatsoever to the subscribers / users of this report. This report is for personal information only of the authorised recipient in India only. This report or part of it should not be reproduced or redistributed or communicated directly or indirectly in any form to any other person or published or copied for any purpose. PUBLISHED BY CARE Research is an independent research division of CARE Ratings, a full-service rating company. CARE Research is involved in preparing detailed industry research reports with 5-year demand and 2-year profitability outlook on the industry besides providing comprehensive trend analysis and the current state of the industry. CARE Research also offers research that is customized to client requirements. Credit Analysis & REsearch Ltd. (CARE) is a full service rating company that offers a wide range of rating and grading services across sectors. CARE has an unparallel depth of expertise. CARE Ratings methodologies are in line with the best international practices. Head Office: 4th Floor Godrej Coliseum, Off Eastern Express Highway, Somaiya Hospital Road, Sion East, Mumbai Tel: Fax: Regional Offices: New Delhi Kolkata Ahmedabad Bangalore Hyderabad Chennai Pune Published on behalf of The Stock Exchange Investors' Protection Fund First Floor, P J Towers, Dalal Street, Mumbai. Tel: /34