Buy Wonderla Holidays Ltd for the Target Rs.613 by Geojit Investments Ltd
Chennai Park Ramp-up to Drive Future Growth
Wonderla Holidays Ltd. (WHL) is a leading chain of amusement parks in India, operating five major parks in Kochi, Bengaluru, Hyderabad, Bhubaneswar, and Chennai. The company offers a wide range of land and water rides and provides food and beverages through its restaurants and food courts inside the park
* Revenue from operations increased 10.7% YoY to Rs. 135cr, driven by a 8% YoY improvement in ARPU to Rs. 1,377 despite flat footfall growth.
* The Chennai park launch in December 2025 saw strong initial traction with ~75,000 footfalls in its first month, positioning the unit to reach EBITDA-positive status early.
* EBITDA grew 8.3% YoY to Rs. 40cr, though margins contracted 70bps YoY primarily due to non-recurring launch expenses associated with the Chennai expansion.
* Footfalls were pressured by rainfall across Bhubaneswar, Hyderabad, and Chennai locations. Additionally, the Kochi park saw lower attendance following a Kerala government health advisory regarding Amoebic Meningoencephalitis, which triggered temporary consumer caution toward water-based attractions.
* Reported PAT declined 28.7% YoY to Rs. 14cr, primarily impacted by one-time provisions for new labour code regulations and higher depreciation from recently commissioned projects.
Outlook & Valuation
While Wonderla’s Q3FY26 earnings were impacted by one-time regulatory costs and adverse weather, the underlying 8% ARPU growth and the premium performance of "The Isle" resort demonstrate the brand's sustained pricing power. The medium-to-long-term outlook remains positive, supported by the ramp-up of the Chennai park with margins similar to those of Bengaluru and Hyderabad, alongside an expected recovery in footfalls across mature locations as temporary headwinds subside. While management remains conservative regarding specific timelines for the next large-format park, new announcements are expected over the next 2-3 years. Increased depreciation from recent project commissioning and footfall disruptions driven by upcoming elections in Kerala and Tamil Nadu will weigh on near-term earnings. However, the recent fall in stock prices has factored in these headwinds, and we expect a substantial acceleration in the bottom line in subsequent years. Therefore, we assign a BUY rating on the stock with a target price of Rs. 613 based on 12.5x FY28E EV/EBITDA
Key concall highlight
* Management expects the Chennai park to achieve margin parity with the Bengaluru and Hyderabad units by FY27, with revenue scaling to mature park levels within 3–4 years.
* ARPU grew 8% YoY to Rs. 1,377, driven by a 6% increase in ATP (Rs. 923) and a 14% rise in ANTP (Rs. 455), while footfalls remained stagnant at 9.17 lakhs.
* The company continues to focus on large-format parks and expects to announce at least one new location within the next 2 –3 years.
* The resort business recorded its strongest quarter with revenue rising 71% YoY to Rs. 8cr, supported by 68% occupancy and a 25% YoY jump in ARR to Rs. 7,227, reflecting the premium positioning of the new boutique resort, "The Isle".
* Wonderla executed the Chennai project in ~21 months with a total investment of Rs. 611cr and secured a full exemption from local body taxes for 10 years.
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