Praveg (PRVG) Share Price Plummets 7%, Reaching 5-Month Low Amid Disappointing Q4 Earnings

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    <li>Praveg, a prominent eco-responsible luxury resorts company, witnessed a 7% decline in its shares during today's intraday trade, hitting a 5-month low of ₹805.10 apiece, following its Q4 and FY24 results, which failed to meet market expectations.</li>
    <li>The company released its financials post market hours on Monday, posting a significant decrease in its consolidated net profit for both Q4 and FY24. The company reported a net profit of ₹1.63 crore, marking a 68.15% decline compared to ₹5.17 crore in Q4 FY23, while revenue from operations surged by 76.3% YoY to ₹33.49 crore.</li>
    <li>The decline in net profit was attributed to a substantial increase in expenses, driven primarily by higher depreciation charges and finance costs associated with the establishment of new resorts, which contributed significantly to the overall expenses.</li>
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<p><strong>Praveg's shares tumble 7% to a 5-month low as Q4 earnings disappoint.</strong></p>
<h2><strong>Financial Performance in Q4 FY24</strong></h2>
<p>The company released its financials post market hours on Monday, posting a significant decrease in its consolidated net profit for both Q4 and FY24. The company reported a net profit of ₹1.63 crore, marking a 68.15% decline compared to ₹5.17 crore in Q4 FY23, while revenue from operations surged by 76.3% YoY to ₹33.49 crore.</p>
<h3><strong>Operational Challenges and Strategic Insights</strong></h3>
<p>The decline in net profit was attributed to a substantial increase in expenses, driven primarily by higher depreciation charges and finance costs associated with the establishment of new resorts, which contributed significantly to the overall expenses. Moreover, its events and exhibitions segment underperformed, generating ₹1 crore in Q4 FY24 compared to ₹5 crore in Q4 FY23. The company is focused on revitalizing this segment and remains optimistic about a turnaround in the upcoming quarters.</p>
<h3><strong>Positive Developments and Future Outlook</strong></h3>
<p>On a positive note, the robust growth in the top line was fueled by the expansion of operational properties and optimal utilization levels achieved at resorts. The hospitality business played a key role in this growth, contributing over 96% of total revenues, with a remarkable YoY increase of 133%. The company anticipates margin improvements going forward as these properties reach full operational capacity. Strategic investments in resort and hotel properties designed for year-round operation are expected to drive sustained growth, the company said in its Q4 earnings report.</p>
<h3><strong>Conclusion</strong></h3>
<p>Starting the year with three operational resorts at a 44% occupancy rate, Praveg expanded to ten operational resorts by the end of FY24. The company expresses confidence that these occupancy levels will continue to rise with the launch of new luxury properties in FY25. In the quarter, the company opened the Praveg Tent City in Saryu, Ayodhya, featuring 39 tents. Additionally, it secured a work order for luxurious tent resorts on Lakshadweep's Bangaram and Thinnakara islands, which will comprise 350 tents. Moreover, the company unveiled the Safari Velavadar Retreat in Gujarat, offering an exquisite experience for guests. Meanwhile, the net profit plummeted to ₹13 crore in FY24, marking a 54.27% decline from ₹28.43 crore in FY23. On the other hand, revenue from operations witnessed an improvement, reaching ₹94.55 crore in FY24 compared to ₹84.85 crore.</p>