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Key Highlights

* Company background: Incorporated in November 2020 Waterways Leisure Tourism Limited operates the premium cruise brand Cordelia Cruises and is one of India's domestic ocean cruise operators. The company commenced operations in 2021 with the MV Empress and has since expanded its footprint through domestic and international itineraries covering destinations such as Sri Lanka and Singapore. In FY 2025, the Company accounted for approximately 79% of the market share in value terms. As of March 2026, over 730,000 guests have sailed with the company. The company currently operates one vessel and plans to significantly expand capacity through the addition of Norwegian Sky and Norwegian Sun.

* Market opportunity: India's cruise tourism industry remains at a nascent stage but offers substantial growth potential. The overnight ocean and coastal cruise market is projected to grow from Rs 732 crore in FY26 to Rs1,820-2,250 crore by FY31, implying a CAGR of 20-25%. Government initiatives such as the Cruise Bharat Mission, Sagarmala Programme, improved port infrastructure, visa reforms, and tourism promotion measures are expected to support industry expansion. Waterways currently enjoys a dominant position with an estimated 79% market share in India's ocean cruise segment.

* Key strengths: The company is a market leader in India's domestic ocean cruise industry with approximately 79% market share. Its Cordelia Cruises brand enjoys strong recognition, supported by premium onboard experiences and a growing customer base. The company has established operations across key embarkation ports and has demonstrated the ability to develop international cruise itineraries. Its early-mover advantage, established brand presence, and planned fleet expansion position it favorably to benefit from the expected growth of India's cruise tourism industry.

* Key strategies: The company's primary growth strategy is fleet expansion through the introduction of two leased cruise vessels, Norwegian Sky and Norwegian Sun, expected by FY27 and FY28, respectively. These vessels will substantially increase passenger capacity and allow expansion into new routes and customer segments. Management expects the larger fleet to improve operational efficiency, standardize processes, optimize procurement and maintenance costs, and enhance margins while capitalizing on the projected growth in cruise tourism demand.

* Financials: Between FY24 and FY26, revenue from operations increased from Rs 444 crore to Rs 580 crore, registering a CAGR of 14.2%. Over the same period, EBITDA improved from Rs 111 crore to Rs 117 crore, while the company reported a turnaround in profitability, with PAT rising from a loss of Rs 122 crore in FY24 to a profit of Rs 52 crore in FY26. However, compared to FY25, both EBITDA and PAT declined in FY26 due to a slight moderation in revenue, higher operating, employee, and other expenses, along with the absence of the one-time exceptional gain of Rs 75.6 crore recognized in FY25 following lease restructuring. Consequently, profitability moderated despite the company remaining profit-making during the year.

* Valuation: Waterways Leisure Tourism has established itself as a leading player in India's emerging cruise tourism industry through its Cordelia Cruises brand. The company has benefited from robust passenger demand and consistently healthy occupancy levels, supported by increasing consumer interest in cruise-based travel experiences. While the business has achieved profitability, recent pressure on operating margins highlights its exposure to rising costs, occupancy trends, and operational risks inherent to the cruise industry. At a Post issue P/E multiple of around 112x, the IPO appears to factor in much of the anticipated growth, leaving limited room for execution missteps. Considering the company's promising longterm prospects alongside its valuation and execution risks, we maintain a Neutral view on the issue for long-term investors.

* Key risks: The company currently derives its operations from a single cruise vessel, exposing it to operational disruptions and capacity constraints. The cruise industry is highly sensitive to economic conditions, fuel prices, geopolitical events, and discretionary consumer spending. Planned fleet expansion requires significant capital commitments, while competition from global cruise operators, hotels, resorts, and other travel alternatives may impact growth and profitability. In addition, the company's future growth is heavily dependent on its ability to successfully acquire and deploy new vessels. Any delays or failure in executing its fleet expansion plans could constrain capacity growth, adversely affecting its business operations, financial performance, and growth prospects.

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