Market Price Rs 397 (FV 1) Analyst : Janak Shah(M.B.A. Finance)
Market Cap Rs 2253 crs Date: 8th July 2016
Target : Rs 500 Multibagger
About the Company:
The company is promoted by Kochouseph Chittilappilly. The same promoter has also another listed company called V Guard Limited. The promoters are of excellent quality. Mr Kochouseph donated his kidney to a truck driver when he was 60 years of age. He did not even know him. This tells a lot about the promoter. Wonderla holidays was started in the year 2000 under the name Veegaland there after the name was changed Wonderla Holidays Limited.
First park was opened in Kochi in the year 2000. Arun Chittilappilly joined the company and they opened the second park in the year 2005. The IPO came in 2014 after which the third park opened in the year april 2016. Now the promoters have almost finalized a land in Chennai and plan to open a park in the year 2018. The company has also announced that every 3-4 years after that the company will open a park without taking any additional debt. The big vision is to become pan India player.
The company has an equity of 56.5 crores. The company posted sales of Rs 205 crores for the year end March 2016 and delivered a net profit of Rs 60 crores. The EPS was Rs 10.59 per share. This operation was just derived from 2 water parks and the third one was just operational in April this year. We expect the full year profit to be Rs 80 crores in Fy 2016-17.
The debt is almost nil and due to new water parks added every 3-4 years the growth will be superb in the years to come. Don’t look at high PE just go ahead and invest in this potential blue chip.
Promoters hold about 71% , the public holding is about 29%. Catamaran fund just made an investment of 16.5 crores at a price of Rs 387 per share.
Comparisions to Peers:
The only company it can be compared is to Adlabs. Adlabs is also a good investment but it will take some time as it has debt.
The year 2016 at Wonderla with only 2 parks operational, it saw 23 lac footfalls and 205 crores of revenues and Net profit of 60 crores. 30% margin was earned. The first park opened on a big scale was Esselworld. The size is 2600 crores for amusement parks and there are 150 parks with 6 crore footfalls. Water park is a preferred bet as the weather in India is hot. The company has been a customers delight. Wonderla offers value for money with tickets at Rs 1000 which is reasonable but the food is sold at MRP. It has a first movers advantage with no debt on books. It has inhouse ride manufacturing capacity which leads to low capex & maintenance costs. Out of the 121 rides at Wonderla, 42 rides have been made by Wonderla itself. The inhouse cost is 1/3 of the imported rides. Tickets have seen a rise in rates of 10% every year which will enhance the revenues. In year Fy 17, Hyderabad park will contribute 65 crores to revenues and new Chennai facility will expand them.
The current rate of Rs 397 per share is tipped to touch Rs 500 in the next 1 year time frame. It can be a sure shot multibagger if kept for next couple of years.
( Disclosure: The analyst has no holdings in the company as on date of issue being published) Sebi Registration No: INH000001717