Dear Shareholders,
As I write my message about the performance of your Company during the year ended 31st
March, 2023, I feel proud of the achievements of your management and optimistic about the
future.
The pride comes from the fact that this year your Company delivered the best ever
results in its history. Total income on a standalone basis at Rs.1,306 crore, member
additions at 17,477, a growth of 37% over the previous year and highest ever resort Income
at Rs.323 crore compared to Rs.193 crore in the previous year, profit before tax at Rs.214
crore and profit after tax at Rs.159 crore were the highest in the history of the Company.
The consolidated results were even more impressive with total income being 20% higher
at Rs.2,624 crore, EBIDTA 21% higher at Rs.579 crore and profit before tax at Rs.171 crore
was 54% higher than the previous year.
All these were possible because of the excellent work done both by the management of
your Company and that of its subsidiary, Holiday Club Resorts Oy, Finland (HCR).
I am also happy with the performance of HCR. After they managed to come out of the
after-effects of Covid, their economy was severely affected by Russia-Ukraine conflict
with a steep increase in fuel prices, high inflation, substantial increase in interest
rates and worst of all, drop in international tourism due to sanctions against Russia.
In spite of these major hurdles, the management of HCR, by focusing on domestic
markets, optimizing utilization of resources, cost rationalization, improving labour
productivity made an operating profit of Euro 5 million in 2022-23 versus an operating
loss of Euro 0.3 million in 2021-22.
Let me now share where my optimism comes from.
First and foremost is the validation of customer confidence by our existing members.
The upgrades in 2022-23 at Rs.188 crore were 71% higher than the previous year. To me,
this is the best form of validation and a sign of customer confidence: only when a member
is extremely happy with the service and benefits will the members pay to upgrade.
Significant increase in resort income at Rs.323 crore (up 67%) and occupancies going up
from 74% in 2021-22 to 84% in 2022-23 are other major indicators that your management has
made the members happier year after year.
What does this mean to us Rs.
- Higher customer spends. A happy customer not only spends more on F&B but also on
various other activities at resorts including the Spa.
- Happy members encourage their friends and families to become new members.
- Higher referrals lead to lower acquisition costs.
- More members mean more new resorts and an even wider choice for members.
- More members and higher occupancies encourage management to build larger resorts and
effect economies of scale.
The management is in the advanced stages of expansion of resorts in Kandaghat (Himachal
Pradesh), Assonora (Goa) and Puducherry. In addition, it will start construction of two
new resorts at Ganpatipule (Western Maharashtra) and Theog (Himachal Pradesh) soon.
I am also very optimistic about the future of HCR. Despite post-Covid issues and the
current geopolitical situation, HCR has managed to achieve a positive operating profit in
the year under review. We have seen a good growth in time-share sales and the new launches
have been successful. In addition, HCR has a land bank for further launches. The other
good thing is that Finland is seeing tourist arrivals from new destinations; and once the
geopolitical situation improves, this will give a further boost to the hospitality sector.
Hence, I am reasonably confident that the future will augur well for HCR.
It is also pertinent to note that HCR's management has brought down external debt from
Euro 51.7 million in September 2014 to Euro 15.6 million as of March 2023. This should
significantly improve the enterprise value of HCR.
Operational and financial excellence are important parameters. As a 'Mahindra company'
your Company has done much more than that. To list a few:
The first is honesty in doing business. I am truly proud of the fact that we have been
able to live with the Mahindra values and ethics.
The second is that we are truly a customer centric organisation. Our capacity to show
that we care and the fact that we go an extra mile to make every moment magical for the
customer means a great deal to how we run our business. And these translate to extended
customer goodwill.
The third is custodianship of the environment and sustainability. As always, your
Company remains steadfastly committed to conserve the ecological integrity of its
operating locations through responsible business practices and activities such as
measurement of carbon footprint, conservation of biodiversity, energy conservation, use of
renewable sources, water conservation and waste recycling. For example, we use solar power
in 22 of our resorts with 43.43 lakh units (kWh) generated in 2022-23. Six of our resorts
are currently 'water secure'; utilisation of rainwater increased considerably to 275
million litres in 2022-23; and water consumption has reduced by 100 million litres versus
the previous year with 60 per cent of total water consumed by the resorts being recycled.
In conclusion, I want to emphasise that with a growing member base, growth in resorts
and the constant endeavour of management to improve member experience, provide a huge
growth opportunity for your Company and, with it, a bright future.
With my best wishes,
Arun Nanda
Chairman.