CORDELIA Q1 FY27 earnings call

Waterways Leisure Tourism Limited reported a consolidated net profit of Rs. 22.77 Crores for Q1 FY27, achieving a net profit margin of approximately 12%. The company maintained a strong load factor of 105% and saw its average ticket price increase by 4.3% compared to Q1 2025. During the quarter, the company served over 55,700 guests and booked 24,245 staterooms, representing a growth of around 10% over the previous year's Q1.

The quarter was significantly affected by geopolitical tensions in the Middle East, leading to substantial headwinds for the global cruise and transportation sectors, primarily through extremely high fuel costs. This resulted in a Rs. 14 Crores impact on the company's EBITDA. Management noted that the average fuel price, which was $580 per metric tonne last year, peaked at $1228 and is currently around $800 per metric tonne. The company plans to recover these increased costs through fuel surcharges on new bookings, with the impact expected to be visible from the end of Q2 and beginning of Q3.

The company is on track to significantly expand its fleet with the upcoming delivery of Cordelia Sky in September 2026, followed by Cordelia Sun. Cordelia Sky is scheduled for handover on September 25, 2026, arriving in Mumbai on October 15, 2026, with its maiden voyage set for October 23, 2026. This expansion is expected to drive substantial revenue growth, with advance bookings for the new ship already reaching Rs. 65 Crores, projected to generate Rs. 110-115 Crores for shorter sailings. The new vessels feature a superior cabin mix, offering 250 premium rooms compared to Empress's 69, leading to an almost 100% increase in potential revenue generation per ship.

Waterways Leisure Tourism is actively expanding its presence, including in Lakshadweep with two new islands and testing new ports on the West Coast. The company is also introducing new international sailings to destinations like Sri Lanka, Maldives, Singapore, Indonesia, and Thailand, with Maldives and Columbus sailings on the East Coast starting in October. These initiatives are part of a broader strategy to leverage the 'Cruise Bharat Mission' and cater to the growing demand for visa-free and passport-free cruise vacations among Indian and expat Indian guests.

With the addition of Cordelia Sky and subsequently Cordelia Sun, the company anticipates significant improvements in operating margins. The current model, where all costs are borne by a single ship, will transition to a shared cost structure across two, then three, vessels. This sharing of fixed costs, including shore-side marketing and management fees, combined with increased purchasing power, is expected to naturally reduce overall operating costs and enhance profitability. The existing Empress ship is also projected to achieve double-digit revenue growth of 10-12% going forward^⏳, up from the current 8-9%.

To deepen its outreach and enhance guest engagement, the company is rolling out its loyalty program, 'Chairman’s Club,' by the end of Q2. Additionally, a new sales center is scheduled to open in Cochin in September. These steps are aimed at capturing a greater share of the growing Indian domestic cruise market by improving direct business channels and offering multilingual guest support.

Finance costs nearly doubled this quarter, increasing by approximately Rs. 4 Crores, primarily due to a loan taken from IDFC First Bank. This loan was secured to address rating challenges and was backed by existing Fixed Deposits (FDs). Management clarified that while the loan appears on the liability side, the offsetting FDs on the asset side mean the company is technically in a zero-debt position. The company intends to prepay the loan, acknowledging a 1% prepayment cost, as part of its strategy for rating upgrades.