Views on Adlabs Entertainment (Imagica)

Team:

Happy Diwali Brothers!.

This stock is catching my fancy.(I haven't delved deeply into this). Th stock has crashed from 180/- (Institutional allotment) ~160/- (Retail Investor allotment) to around Rs 100-Rs 105/-. They have 2 theme parks (Imagica, Aqua Magic), a Hotel with 280 keys (160 now open). two more theme parks coming up in Kopoli (Snow Park and Adventure Park at Zero Capex), Residential township in the same premises over the next 3-4 years and negotiations underway in Hyd and NCR region for JV.

Footfalls are low now <0.5 Mn and most established players have footfalls of 8-12 Mn on Large theme parks. India has the capacity to build multiple such theme parks. Wonderla trades at a Mcap of ~1900 Cr and Euro Disney trades at ~Euro 1 Bn Mcap, where as Adlabs at 820 Cr. Wonderla has done very well because of its Debt free status, Adlabs has debt issues (not sure how the tenure / plan of re-payment etc). Just before diving in wanted to understand your perspectives!

Thanks!.

 

Happy Diwali!

I was checking Wonderla, the advantage is that they have in-house manufacturing for the rides which gives them an advantage over others. Haven't been to Imagica but see a lot of my friends on social media flocking to the park for a getaway from Mumbai. The footfalls are there but not much. There's not much comparable businesses publicly traded for comparison. Nicco Parks is the other one that I am aware about. If you could compare it with any data you can get for Essel World/Water Kingdom (wonder if data available publicly, they are a part of the Essel/Zee group).

Wasn't there some major mishap at Imagica this year?

Isn't this promoted by the daughter of Adlabs founder?

It'll take a while before they get enough cash flow from the business to be able to service the huge debt.