Waterways Leisure Tourism Limited (Neutral)

Highlights

Waterways Leisure Tourism Limited (Cordelia) incorporated in 2020 which operates one cruise vessel, the MV Empress, under the brand name Cordelia Cruises. Cordelia is one of the domestic ocean cruise operators in India which offers luxurious and inherent Indian experiences.

They offer itineraries ranging from 2-night to 10-night voyages along the coast line and high seas of India and to international locations. Their cruise vessel primarily sails to domestic destinations such as Mumbai, Goa, Kochi (Kerala), Chennai, Lakshadweep, Visakhapatnam, and Puducherry. Additionally, they offer international itineraries to Hambantota, Trincomalee, and Jaffna (Sri Lanka), Phuket (Thailand), Singapore, Kuala Lumpur and Langkawi (Malaysia).

Their cruise vessel MV Empress offers a variety of cabin options, including one chairman’s suite, five suites, 63 mini suites, 416 ocean-view staterooms, and 311 interior staterooms, totaling 796 cabins, with prices ranging from Rs. 34,164 (interior rooms)/night to Rs. 151,111 (Chairman suite) per night, subject to dynamic pricing and load factor considerations.

Further, Cordelia also offers specialized arrangements for Meetings, Incentives, Conferences, and Exhibitions (MICE) events and weddings, with comprehensive services that include venue arrangements, catering, entertainment, and accommodation. Their cruise cabin prices and amenities on board are determined based on the type of cabin selected.

Out of the total proceeds of Rs. 5,850 mn, ~Rs. 4,800 mn would go towards payment towards deposit/ advanced lease rental and monthly lease payments to their step-down subsidiary and Rs. 1,050 mn would be utilized for general corporate purposes.

Key Highlights

• The overnight ocean and coastal cruise industry in India is estimated to be valued at Rs. 8,301 mn in FY25, compared to Rs. 5,764 mn in FY20, reflecting a CAGR of ~8 pct between FY20 and FY25, and in medium term the market is projected to increase to Rs. 18,200 mn to Rs. 22,500 mn by FY31, thereby registering a CAGR of ~20 pct to 25 pct from FY26-31.

• The current vessel has capacity of 2005 passengers with occupancy of 85 pct in FY26. In order to fulfil additional demand, the company is introducing two new cruise vessels, Norwegian Sky (Q2FY27) and Norwegian Sun (Q2FY28), each with a capacity of up to 2,004 and 1,936 guests respectively which will increase its capacity to 5,945 passengers. further, the company also intend to introduce new cruise itineraries and destinations tailored to various traveller segments to meet the growing demand for cruise experiences in India.
• The company provide their guests with a variety of ways to book their cabins through website, mobile application and over the phone or through third-party travel agents. Historically, the majority of their cabins have been booked directly with them. Direct bookings reduce commissions paid to travel agents, thereby improving their margins.
• To reduce seasonality impact, the company offers year-round services while considering weather conditions to ensure a good experience for their guests. During the monsoon season, when the west coast of India encounters challenging sea conditions, the company strategically relocate their homeport to Chennai. This relocation enables them to navigate seasonal changes effectively and offers guests new opportunities to explore the diverse coastal regions of India.
• Cordelia’s key growth strategies include (i) To introduce new cruise vessels to meet growing demand and (ii) broaden itineraries to cover domestic and international destinations. They intend to expand itineraries to include domestic destinations such as Diu, Porbandar, Port Blair, Kolkata, and New Mangalore, and international destinations such as Maldives, Indonesia, Australia, UAE, Oman, Kuwait, and Mauritius.  
• The sales of the company have grown by 14.26 pct CAGR Over FY24-26 and EBITDA has grown 2.81 pct CAGR over same year. In FY25 the company reported sales of Rs. 5,797 mn, which fell 1.8 pct YoY due to low occupancy caused by Indigo led crisis while EBITDA of the company dropped 45 pct due to increased in shipboard cost of sales. In FY25 the company posted profit of Rs. 521 mn which fell 69 pct YoY.

Key Risk

• The Company currently undertakes their operations through a single cruise vessel, the ‘MV Empress’. Any disruption to their cruise vessel could lead to operational disruptions and adversely impact their business.
• An increase in cruise capacity without a corresponding increase in demand and infrastructure could adversely affect the Company’s business.
• Their statutory auditors have included certain adverse remarks, emphasis of matters and qualifications in their auditor’s report. In particular, their Statutory Auditors included a remark in the audit report for FY24 pertaining to the material uncertainty related to going concern.

Financial Performance

Source: – RHP.

Global Peer comparison based on FY26 Financials

Valuation

Cordelia is one of the domestic ocean cruise operators in India which offers luxurious and inherent Indian experiences. With the Government of India’s commitment to transforming India into a global hub for cruise tourism, the Cruise Bharat Mission, launched by the Ministry of Ports, Shipping, and Waterways, aims to double cruise passenger traffic by 2029. This initiative includes developing world-class infrastructure, enhancing digitalization and decarbonization, and creating tailored fiscal and financial policies to support the growth of the cruise industry. At the upper end of the price band of Rs. 808, the issue is priced at an EV/EBITDA of 49x its FY26 earnings on post issue equity capital. The issue appears to be fully priced.

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