Buy Imagicaaworld Entertainment; target of Rs 108: Prabhudas Lilladher

Prabhudas Lilladher is bullish on Imagicaaworld Entertainment has recommended buy rating on the stock with a target price of Rs 108 in its research report dated May 24, 2024.

Broker Research

May 29, 2024 / 12:47 IST

Buy

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Prabhudas Lilladher's research report on Imagicaaworld Entertainment

We initiate coverage on Imagicaaworld Entertainment Ltd (IEL) with a BUY rating and TP of Rs108. In an industry plagued with high entry barriers and fatigue factor amid lack of novelty, IEL’s competitive edge stems from 1) superior brand re-call, 2) strategic location of parks and 3) offering a ride experience that matches international quality standards. We believe IEL is a classic turnaround candidate post BS restructuring and takeover by the Malpani Group. The new management has 2 decades of experience in amusement parks business and has decided to merge their 5 parks (4 operational and 1 upcoming) into IEL at an EV of Rs7,700mn. Post-merger, IEL will emerge as leading entertainment destination with a portfolio of 8 parks and a 5-star hotel. Led by consolidation, we expect revenue/EBITDA CAGR of 30.7%/41.3% over FY24E-FY27E with an improvement in margin profile as mature parks would come into the portfolio.

Outlook

We value IEL on SOTP basis and arrive at a TP of Rs108. Initiate BUY.

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