Buy Wonderla Holidays; target of Rs 890: Sharekhan

Sharekhan's research report on Wonderla Holidays

Wonderla Holidays Ltd’s (WHL’s) Q3FY25 numbers were weak, as a sharp contraction in EBITDA margin led to a ~42% y-o-y decline in the adjusted PAT. Revenue fell by 1.7% y-o-y with footfalls lower by 3% y-o-y. Footfalls would be muted in FY25 but sharply improve in coming years aided by scaling up of Bhubaneshwar park, opening of the Chennai park, addition of new attractions and restaurants in the existing parks and marketing strategies. Management expects EBITDA margins to be at 35-40% in the near term. Soft launch of Chennai park is expected by Q3FY26-end (likely in December 2025). Management guided that it will announce finalisation of one more location in the coming months.

Outlook

Stock has corrected by 20% from its recent high and trades at 20x, 16x and 12x its FY25E, FY26E and FY27E EV/EBIDTA, respectively. We maintain a Buy with a revised PT of Rs. 890.