Dolat Capital recommended Accumulate rating on Wonderla Holidays with a target price of Rs 327 in its research report dated May 17, 2019.
Dolat Capital's research report on Wonderla Holidays
Wonderla posted good set of numbers in Q42019. Revenue grew 10.4% YoY, driven by a 6.8% YoY growth in footfalls and a 2.6% rise in ARPU. Kochi park has stabilized after the floods. All three parks witnessed positive trend in top-line and footfall growth in Q4. However, the overall footfall growth during the quarter was restricted by festive season shift to Q1FY20 (vs Q4 last year) and delayed school vacations. We have revised our estimates marginally to factor in Q4 performance.
Valuing the stock at 12x FY20E EV/EBITDA to arrive at a TP of ` 327. Maintain Accumulate. Going ahead, we believe that footfalls are likely to rise, due to calibrated pricing, an increase in marketing/promotions, and tie ups with online portals. Further, a favorable base of last year should help Wonderla to post higher growth in the ensuing quarters.
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