Result Update: Wonderla Holidays Ltd - BUY - TP Rs.457 - Kotak

Wonderla Holidays Ltd (WHL) Q3FY18 results were below our estimates. Net revenue for the quarter was at Rs 638 mn which declined by 6% on account of 12% and 15% yoy decline in footfalls in Bangalore and Kochi parks due to high GST rate and shift of festive season on yoy basis. But its new park in Hyderabad witnessed 11% yoy growth in footfalls which is encouraging despite higher GST related challenges. EBITDA for the quarter grew by 58.5% yoy to Rs 191 mn with EBITDA margin improved by 1220 bps yoy to 29.8% and was ahead of our estimates of 27% on improved operational efficiency. The company has added new ride at Hyderabad with the investment of Rs 350 mn which will help in growing footfalls in the park. The company is awaiting clarity on local body taxes for Chennai park and expect to start work on the same in the next two quarters. Further, the management is positive on future growth prospects considering GST rate for amusement park reduced from 28% to 18% effective from 25th January 2018. We have tweaked our estimates for F18E and FY19E to Rs7.7 (earlier Rs8.8) and Rs12.1 (earlier Rs12.5), respectively, factoring in lower footfalls in Kochi and Bangalore in Q3FY18 and introduced FY20E estimates. We are positive on future potential of theme parks in India and maintain our positive view on the company for running the business efficiently despite challenges. We maintain BUY on the stock with revised DCF based target price of Rs 457 (Vs Rs 465 earlier)

Shares of Wonderla Holidays Ltd was last trading in BSE at Rs.384.95 as compared to the previous close of Rs. 385.9. The total number of shares traded during the day was 536 in over 44 trades.

The stock hit an intraday high of Rs. 387 and intraday low of 383.8. The net turnover during the day was Rs. 206596.

Source : Equity Bulls

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