Wonderla Holidays: Accumulate

Wonderla Holdidays is one of the largest amusement parks in India owned and operated by the promoters of V-Guard Industries. The promoters launched the first theme park in the year 2000 at Kochi and has successfully launched another amusement in Bangalore in the year 2005.The company also owns a resort in Bangalore. The company is also coming up with a new amusement park in Hyderabad which is expected to come up in the year 2017.The company has an in-house manufacturing facility located at kochi which manufactures /constructs rides and attractions for both the parks.



Amusement parks offer a wide range of water and land-based attractions which cater to all age groups. Company has 22 water-based attractions and 33 land-based attractions at Wonderla Kochi, situated on 93.17 acres of land. The company 20 water-based attractions and 35 land-based attractions at Wonderla Bangalore, situated on 81.75 acres. The company recorded total footfalls of 23, 40,000 in FY15 as against 22, 91,000 in FY14 across the two amusement parks in Kochi and Bangalore thereby registering a growth of 2.1% YoY.

The company’s average revenue per visitor has grown from Rs.754/- in FY15 as against Rs.652/- in FY14 registering a growth of 15.6%YoY.According to the management amusement parks have good pricing power and they are able to increase ticket price by 10% per annum. The company’s revenues have grown from about Rs.54/ Cr in FY09 to about Rs.145/ Cr in FY15. The company derives about 79% of its revenues from ticket revenues in Bangalore wonderla and the remaining 21% from non-ticket sales. The Kochi wonderla derives about 79% of its revenues from ticket sales and the remaining 21% from non-ticket sales.

The other listed amusement park player Adlabs Imagica is bigger than Wonderla with revenues of Rs.191/- Cr as against Rs.145 for wonderla in FY15. While Adlabs Imagica had footfalls of about 10,64,000 Wonderla has higher footfalls of 23,40,000. This can be attributed to ticket prices which is charged by Adlabs Imagica which stands at Rs.2000/- per head while Wonderla charges Rs.754/- per head.

The stock at the current market price of Rs.286/- is trading at 30x its FY15 EPS which though not cheap is reasonable considering the quality of the business. Further there are growth triggers in place on account of higher realizations and new park at Hyderabad which is likely to drive its growth going forward. Further, the ticket price charged by Adlabs Imagica is an indicator of the pricing power that is prevalent and offers scope for increase in prices for wonderla. Investors can Accumulate the stock from a long term perspective.