Wonderla Holidays Ltd. Research Report

Company Overview

Wonderla Holidays Ltd. (WHL) is a leading chain of amusement parks in India, operating five major parks in Kochi, Bengaluru, Hyderabad, Bhubaneswar, and Chennai. The company offers a wide range of land and water rides and provides food and beverages through its restaurants and food courts inside the park.

Financial Performance

Read also: Oshea Herbals Aims for Rs 650 Crore Revenue Amidst Expansion Efforts

In its latest quarter, WHL reported a 10.7% YoY increase in revenue from operations to Rs. 135cr, driven by an 8% YoY improvement in ARPU to Rs. 1,377 despite flat footfall growth. The company's EBITDA grew 8.3% YoY to Rs. 40cr, although margins contracted 70bps YoY primarily due to non-recurring launch expenses associated with the Chennai expansion.

Challenges

Footfalls were pressured by rainfall across Bhubaneswar, Hyderabad, and Chennai locations. Additionally, the Kochi park saw lower attendance following a Kerala government health advisory regarding Amoebic Meningoencephalitis, which triggered temporary consumer caution toward water-based attractions. Reported PAT declined 28.7% YoY to Rs. 14cr, primarily impacted by one-time provisions for new labour code regulations and higher depreciation from recently commissioned projects.

Outlook

Read also: Suzlon to Expand Business Scope Beyond Wind Energy, Invests Rs 500 Crore in New Subsidiary This Fiscal Year

However, the recent fall in stock prices has factored in these headwinds, and we expect a substantial acceleration in the bottom line in subsequent years. Therefore, we assign a BUY rating on the stock with a target price of Rs. 613 based on 12.5x FY28E EV/EBITDA.