Buy Imagicaaworld Entertainment; target of Rs 93: Prabhudas Lilladher

Prabhudas Lilladher's research report on Imagicaaworld Entertainment

We raise our EBITDA estimates by 2.4% for FY26E but have trimmed our FY27E estimates by 2.7% amid delays in opening timeline of the new park at Sabarmati. IMAGICAA reported strong operating performance with EBITDA margin of 42.9% (PLe 36.7%) aided by a one-off grant income of Rs62mn pertaining to hotel Novotel, Imagicaa. While footfalls were down by ~4% on LFL basis, we expect recovery in FY26E backed by 1) addition of 10 new rides at Wet & Joy water park in Lonavala 2) launch of 2 new shows at Sai Teertha and inauguration of a new trampoline park at Khopoli. Operationalization of the new water park in Indore will provide an additional growth fillip.

Outlook

We expect sales/EBITDA CAGR of 12%/17% over FY25-FY27E. Retain BUY on the stock with an SOTP-based TP of Rs 93 valuing the park/hotel business at EV/EBITDA multiple of 23x/21x (no change in target multiple).