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WONDERLA: 878 Long Term Gr: 15% | CYear Gr: 13% | Fy_24 Result updated
(Fall in footfalls were seen in last quarter which affected the sales and Profit growth)
WONDERLA - The Largest Amusement Park in India. Wonderla Holidays Limited operates three largest amusement parks in Kochi, Bengaluru and Hyderabad; and the Wonderla resort in Bengaluru under the brand name Wonderla. The first amusement park project Wonderla Kochi was set up in 2000 under the name Veegaland in Kochi, Kerala & 75 crore INRs was invested in the construction and development of Veegaland. In 2005, with the overwhelming success of the Veegaland project this followed by the second in Bangalore in 2005 on a larger scale at a cost of around 105 crore INR in Bangalore by the name Wonderla, spread over an area of 82 acres, and finally the third in Hyderabad was commissioned in April 2016. Wonderla was currently planning to open its 4th & 5th amusement park in Chennai & Bhubaneswar. Today when I am writing this article on 24th May is the new opening of Bhubaneswar Park which will again add footfalls to Wonderla. Wonderla amusement parks offer a variety of dry rides such as roller coasters, ferris wheels, drop towers and water rides for its customers.
During the IPO in fy_2015 we already saw the Footfalls rise to 23 lakhs from the footfalls around 16 lakhs in 2010. This helped them reach a turnover of 192 Cr during IPO in 2016 from the turnover of 70 Cr during 2010. Considering the debt-free status and growing park company we have already recommended this company since that time. The initial public offering (IPO) of Wonderla Holidays for about Rs 180 crores received an overwhelming response. The IPO proceeds were to be used for its upcoming theme park project in Hyderabad.
Year 2020 last quarter was partially covid affected and thereafter the covid wave 1 and wave 2 damaged the business. As this was a touch intensive sector the majority of the time during covid operations were closed. Till the year 2019 we saw a turnover of 292 Cr from 25 Lakh footfalls. Year 2020 we saw the minor fall in sales due to Covid but thereafter the sales were largely damaged for 2 years. During Wave-1 the majority of the year there was strict lockdown for touch intensive sectors and hence the sales were dragged from 283 Cr to mere 45 Cr, we saw them making losses of 50 Cr. This was the time when nation wise other parks were in problems which were already debt burden. Wonderla was a cash rich company and hence they were able to survive this phase. Even during Fy_22 we saw wave-2 where some of the months were affected due to Covid. This year we saw a recovery in footfalls and hence the sales recovered to 128 Cr. Yet this recovery was around 50% less than the pre_covid era. They made losses of just 9.5 Cr this time. Here we saw large improvements from Q4_fy22 itself and hence we again started to increase the weightage from here itself expecting good years for tourism.During Fy_23 results we saw lifetime high footfalls, lifetime high sales, Lifetime high Profits & hence lifetime high prices were also expected.
### Q4 FY24 Highlights:
- **Revenue**: Rs. 997 million, a 1% increase from Q4 FY23 which were Too lesser than estimates.
- **PAT**: Rs. 226 million, a 35% decrease from Q4 FY23 too bad due to low demand.
- **Footfall**: 7.09 lakhs which were 95k lesser v/s previous year quarter. Fall in footfall is not a good indicator.
- **ARPU**: Rs. 1,349, a 14% increase from Q4 FY23. Yes they were able to increase ARPU which is a good point.
- **PAT Margin**: 21.6%. Contracted by 13.5% which was the big hit in margin.
Weak Q4 affected the overall Fy_24 Results which were strong.
FY24 Highlights:
- **Revenue Growth**: 13% increase to Rs. 4,830.4 million. Which was lesser then estimates due to cooling off in Q4.
- **EPS (Earnings Per Share)**: Rs. 28, a 6% growth YoY.
- **Footfall**: Total footfall across parks stood at 32.52 lakhs which were 59k lesser v/s previous year majorly affected due to big fall in Q4. Fall in footfall is not a good indicator.
- **ARPU (Average Revenue Per User)**: Rs. 1,430, a 15% increase YoY. Yes they were able to increase ARPU which is a good point.
- **Profit After Tax (PAT)**: Rs. 1,579.6 million, a 6.1% increase YoY which was again lesser than estimates as profits were affected in Q4.
- **PAT Margin**: 31.2% contracted by 180 basis points.
Results were worse than estimates and can take the stock into mid correction.
### Financial Ratios:
- **PAT Margin (FY24)**: 31.2%. Fall by 180 basis points.
- **PAT Margin (Q4 FY24)**: 21.6%. Fall by 13.5% basis points.
### Sales and Profit Growth:
- **Sales Growth (FY24)**: 13%.
- **Profit Growth (FY24)**: 6.1%.
- **Sales Growth (Q4 FY24)**: 1%.
- **Profit Decline (Q4 FY24)**: -35%.
Moving Further we may see sales growth of 12% next year and Profit growth may decline by 24% if margin does not improve.
Last Year fy_23 from the beginning itself was the boom year for tourism and this year in later quarters saw some cooling off. Government focus on spending on Tourism will be seen this decade. In a vast country like India, there are opportunities for expansion in the amusement park industry. Several states continue to be underserved by well-organized amusement parks. Wonderla is aware of this opportunity and has plans to expand in 10 cities across India in the next few years with 5 more from existing. Chennai could start in q3 Fy26 and the park footfalls are expected like Bengaluru park around 10 lakh. The project in Odisha near Bhubaneswar opened today. This park could contribute 2-5 lakh footfalls.
We may See Wonderla Cross the landmark sales of 500 Cr next year and 1000 Cr in the year 2030, Profits margins of 25-35% should be estimated. Hence buying has already been recommended near 197 2 Years back & happy to see many of you did the SIP during the whole long 2 years of correction. Considering the fall in footfalls we may see stock in the correction mode where New buying again can be done during any fall near 500 while the target for next 4 years should be 1776. A multiyear rally candidate along with a consistent 25% dividend distribution expected every year, till when? till the time people in India will enjoy the amusement parks. Yes, the Stock for wealth.
Disclosure: This document is prepared for education purposes of the Training institute. Before buying or selling you should watch the data on your own.
