Fundamental analysis of Praveg – financials, future plans and more

Praveg’s fundamental analysis The Indian travel market is expected to reach $125 billion by 2027, and the events and exhibition market is expected to reach $7.55 billion by 2027. Small companies in this field are standing out and attracting market attention. Let’s take a look at the story of Praveg Limited, a company that returned more than 37,000% in just five years.

Praveg’s fundamental analysis

Company Overview

Established in 2005, Praveg Limited has emerged as a leading exhibition management company with over 20 years of successful operations. Having organized over 3000 events and exhibitions in India and abroad, Praveg has become a services powerhouse with a diverse portfolio covering Exhibition Management, Event Management, Tourism & Hospitality, and Publishing.

With a wealth of experience spanning over 20 years, a strong client base of over 100, and an impressive track record of managing over 1,000 events and over 2,000 exhibitions, Praveg has firmly established himself in the industry. Notable achievements include managing three tent cities with over 450 rooms spread over 300,000 square meters, selling over 83,000 rooms and serving over 4,20,000 meals.

With its roots in advertising, events and exhibition management, Praveg has evolved into a pioneer in the tourism and hospitality sector, providing comprehensive and innovative solutions. The company’s global presence extends from the United States to China, Korea, Africa, Europe and the Middle East, making Praveg a key player executing large-scale projects around the world.

Our client base includes GSPC, ICAI, Indian Oil, SAIL, NTPC, Gujrat Tourism, etc. in the government sector and Suzlon, Reliance, Adani, TATA Power, Wipro, Hitachi, etc. in the private sector.

segment analysis

Exhibition and event management

The exhibitions and events industry is responsible for the organization and execution of gatherings, trade shows, conferences, and expos. It serves as a forum to present products, services and ideas while encouraging networking, collaboration and industry growth. Event management in this sector involves coordinating logistics and ensuring smooth execution, which significantly contributes to economic growth.

Tourism and Accommodation

Tourism involves the movement of people for leisure, business or other purposes and to explore new destinations and cultures. Hospitality, on the other hand, refers to the services and accommodation provided to guests while traveling, ensuring their comfort and satisfaction. These industries make a significant contribution to the global economy by providing jobs, fostering cultural exchange and improving the overall well-being of both passengers and local residents.

Industry Overview

The Indian economy recorded rapid growth in 2022, marking the second consecutive year of strong recovery after suffering a severe economic contraction due to the COVID-19 pandemic in 2020. The Indian economy has remained resilient despite ongoing global headwinds from external factors such as post-pandemic outbreaks, supply chain disruptions due to the ongoing Russia-Ukraine conflict, and potential recessionary pressures faced by developed countries.

Tourism and Accommodation

Tourism in India highlights India’s remarkable history, culture and diverse experiences, bringing not only cultural enrichment but also important economic benefits. The growth of India’s middle class and rising disposable income have played a role in supporting both domestic and international travel.

India’s travel market is expected to reach $125 billion in 2027, up from $75 billion in 2020. The Indian air travel market is estimated to be worth US$20 billion and is expected to double in size by FY27 due to improved airport infrastructure and increased passport accessibility. The Indian hotel market, including domestic, inbound and outbound, was estimated at approximately US$ 32 billion in FY20 and is expected to reach approximately US$ 52 billion by FY27, driven by surging traveler demand and continued efforts by travel agents. Activate the market.

Events and Exhibitions

Exhibitions and events play an important role in stimulating the economy. As India continues to be one of the fastest-growing economies, government initiatives to support businesses in various sectors are expected to enhance the demand for events and exhibitions in the country.

The Events & Exhibitions Market in India was valued at USD 3,674.95 million in 2022 and is expected to reach USD 7,550.05 million by 2027, registering a compound annual growth rate (CAGR) of 12.43% during the forecast period 2022-2027.

Praveg’s Fundamental Analysis – Finance

Sales and Net Profit

The company’s financial statements show an 86.7% increase in revenue from ₹45.25 crores to ₹84 crores from FY22 to FY23 respectively. On a 4-year CAGR basis, the company has grown by 8.78%. This increase is primarily due to a significant rebound in tourism.

The company’s net profit increased by 132% from ₹12 crore in FY22 to ₹28 crore in FY23. On a 4-year CAGR, the company has grown by 74.79%.

This is due to an increase in operating profit and a slight decrease in management costs. The decline in revenue in FY20 and FY21 was primarily due to the impact of COVID-19.

The table below shows Praveg Limited’s sales and profits over the past five years.

profit

Praveg reported a 10% increase in operating profit margin (OPM) and around 7% increase in net profit margin (NPM) from FY22 to FY23. The increase coincided with net profit. Margins continued to rise, improving the five-year averages to 30.49% and 19.06%, respectively.

Profitability improved significantly due to a surge in demand compared to the previous year and a decrease in operating costs such as rent and travel expenses.

The table below shows Praveg’s profit margins over the past five years.

rate of return

In terms of returns, Praveg’s business generates healthy returns on the capital employed and capital employed. RoCE and RoE in FY23 ranked first at 34.55% and 25.28%, respectively.

RoCE and RoE ratios have decreased despite improved profitability due to increased equity resulting from funds received from preferred stock issuance. Over the long term, the ratios have remained similar. ROE in FY19 was negative due to the company’s losses, which turned its five-year average ROE into negative.

The table below shows Praveg’s ROE and RoCE over the past five years.

leverage ratio

Looking at the company’s leverage, we can see that it has maintained very low debt and is currently virtually debt-free. The highest debt-to-equity ratio over the past five years was 0.12 in fiscal 2022.

This indicates less financial strain on the company as it relies less on borrowed capital to finance its operations and expansion. This also means the company can keep more of its profits because it has less commitments to repay debt and interest.

On the interest front, the company’s interest coverage ratio increased in FY23 and was reported to be 65.62. This means that the company generated enough gross profit to cover more than 65 times its interest expenses, largely driven by improved margin recovery mechanisms and efficient use of assets.

The table below shows Praveg’s D/E and interest coverage ratios over the past five years.

key indicators

Praveg’s Fundamental Analysis – What’s Next?

• By 2025, Praveg has a vision to create over 1,000 rooms in over 25 resort destinations, providing exceptional hospitality experiences globally.
• Our sights are set on wider horizons as we prepare to strengthen our hospitality portfolio with the construction of world-class resorts in Udaipur, Ranthambore, Jawai Dam and Velavdar in the near future.
• Unlock untapped potential across established brand assets and diverse product portfolios.
• Praveg has eight hotel projects under construction and three currently in planning.
• We will continue our legacy of success by creating a niche in the news genre and starting our journey as a Gujarati news channel.
• Praveg has projects starting soon in Dholavira, Velavdar, Ahmedabad, Udaipur, Jawai, Ranthambore and other locations.
• The company has received a work order for the development of a tent city along Bramha Kund in Ayodhya, Uttar Pradesh.
• We plan to create a resort and theme travel destination in Adalaj, Gujarat in collaboration with the Gujarat State Tourism Corporation.

conclusion

In the article “Praveg’s Fundamental Analysis” we looked at their business, the industry it operates in, and its five-year financials and plans. The upcoming period is expected to witness robust growth, primarily driven by domestic demand, and this momentum is expected to remain strong throughout fiscal 2023-24.

Although international travel is on the way to recovery, there remains room for further demand expansion, creating many opportunities for future growth for the company. Apart from all this, we recommend further analysis before investing to understand the risk and return characteristics of this company.

What do you think of Praveg as an investment opportunity? Let us know in the comments section below.

Written by Ashish Agarwal

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