Sharekhan's research report on Wonderla Holidays
Wonderla’s footfalls stood almost flat over FY2018-FY2020 at 24-25 lakhs. With strong demand and defined strategies, the company’s footfalls are expected to register a CAGR of 8-9% over FY2023-FY2025 to close to 30 lakh footfalls. Further, operations of the new park in Odisha/Chennai will add incrementally (likely from FY2025-FY2026). EBIDTA margin is expected to touch 40% in FY2023 and will consistently improve in the coming years on account of better operating leverage. The company has cash of close to Rs. 200 crore and is likely to generate cash of Rs. 100 crore incrementally every year. Thus, capex for Chennai/Odisha will be done through internal accruals without giving stress to the balance sheet.
Outlook
We reiterate Buy on Wonderla Holidays Limited (Wonderla) with a PT of Rs. 425. The stock is our preferred pick in the small-cap discretionary space with a strong brand presence in the amusement park space coupled with a lean balance sheet despite an asset-heavy model. The stock trades at 12.3x/10.5x its FY2023/FY2024E EV/EBIDTA.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
