Views on Wonderla Holidays Ltd 2QFY2016 Results: Angel Broking

Views of Mr. Amarjeet Maurya (Sr. Research Analyst - Mid Caps, Angel Broking) on Wondrela Holidays 2QFY2016 Results:

"Wonderla Holidays 2QFY2016 results have come in ahead of our expectations. The company's top-line for the quarter grew by a healthy ~26% yoy to INR43cr (our estimate was of INR38cr), mainly due to healthy growth in footfalls and increase in average realisation. On the operating front, the company reported margin improvement by 265bp yoy to 34%, primarily on account of lower employee, advertisement and other expenses. The net profit grew by ~86% yoy to INR 12cr due to improvement in performance at the operating level, higher other income and lower taxes.

Going ahead, we expect the company to report a healthy growth in footfalls with it setting up a new amusement park in Hyderabad, which would be operational in FY2017. Moreover, the company has negative working capital, negligible debt, and is able to post a healthy return ratio, which makes the balance sheet all the more attractive. Currently, the stock is trading close to our target price; we will update our investment recommendation on the stock shortly, i.e. post results conference call."

Source : Equity Bulls

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