Wonderla Holidays - Chennai on Track; Expansion Visibility Low | MNCL Research Update

We reiterate our HOLD rating on Wonderla Holidays Ltd while revising our target multiple downwards to 18x (from ~20x) and rolling forward our valuation to Q2FY28E. In a seasonally weak quarter, the company delivered a better-than-expected topline, primarily led by strong growth in Kochi Park (on a low base) and a steady increase in non-ticketing ARPU across parks. Footfalls in mature parks — Bengaluru and Hyderabad — grew modestly by ~1% YoY, while Kochi posted a sharp 38% YoY growth, and Bhubaneswar, the newly launched park, grew by only 3% YoY. Overall footfalls rose ~12% YoY to 5 lakh, while ARPU improved ~5% YoY, driven by higher in-park spends. The revenue mix currently stands at 69% ticketing and 31% non-ticketing. Looking ahead, while the Chennai park (slated for launch by December 2025) will serve as the key growth driver, the lack of visibility on subsequent park announcements remains a concern. The company continues to engage with several state governments; however, execution timelines remain uncertain. With footfalls at mature parks largely plateauing, sustained growth now hinges on timely commissioning of new parks. Furthermore, with a healthy cash balance post-QIP, accelerating park additions or expansion plans becomes critical for maintaining long-term growth visibility and justifying current valuations.

Footfalls drive overall growth:

The company reported 19% YoY revenue growth to Rs. 802 mn in Q2 FY26, largely led by a 5% increase in total footfalls to 5.05 lakh and a 3.9% YoY rise in ARPU to Rs. 1,478. Park-wise, Bengaluru Park (contributing ~38% of revenue) posted an 8% YoY revenue increase to Rs. 306 mn, driven by 8% ARPU growth, while footfalls remained flat YoY. Kochi Park (~34% of revenue) delivered a strong 37% YoY growth to Rs. 271 mn, aided by a 37% jump in footfalls to 1.92 lakh (vs. 1.39 lakh YoY, compared to ~1.84 lakh historically), on a low base, with ARPU remaining stable YoY. Hyderabad Park (~18% of revenue) registered 8% YoY growth to Rs. 146 mn, supported by 7% ARPU growth and 1% increase in footfalls. The Bhubaneswar Park (~4% of revenue) saw 9% YoY growth to Rs. 28 mn, driven by 5% ARPU growth and 3% higher footfalls. Meanwhile, the Bengaluru Resort delivered 53% YoY growth to Rs. 56 mn, backed by higher occupancy and the contribution from the newly launched premium wing.  OPM for the quarter stood at 9.3%. EBITDA for the quarter stood at Rs. 74.8mn as against a loss of Rs.11mn YoY. The company reported a net loss of Rs.17.5mn as compared to net profit of Rs.147.2mn YoY (one time tax adjustment in base).

Chennai Park and upcoming development:

The company’s upcoming Chennai Park remains the key near-term growth catalyst, with commercial operations targeted for December 2025. Developed at an estimated capex of ~Rs. 6bn it will be a large-format destination park comparable to Bengaluru and Kochi and is expected to ramp up to 10–12 lakh annual footfalls within 3–4 years. Beyond Chennai, management reiterated its long-term vision of operating 10–12 parks across India, evaluating locations in Tier-1 cities such as Mumbai, Delhi, and Ahmedabad, along with select Tier-2 markets following the Bhubaneswar lease-based model. The timing of new park announcements, however, remains dependent on state-government approvals and land-acquisition progress.

Outlook:

While Wonderla’s medium-term growth visibility is anchored by the upcoming Chennai Park (launch targeted for Dec 2025), the absence of new park announcements remains an overhang on the company’s long-term expansion strategy. Footfalls across mature parks have largely plateaued, indicating that growth will increasingly rely on ARPU enhancement rather than volume gains. The company’s current revenue mix stands at 70:30 between ticketing and non-ticketing, and beyond this level, further mix improvement could prove challenging, as non-ticketing spends are already approaching saturation in certain parks. Meanwhile, with a healthy cash balance post-QIP and limited near-term reinvestment avenues, timely announcement and execution of new parks becomes essential to sustain growth momentum and avoid dilution of return ratios (ROCE/ROE) due to idle cash and slower asset turnover.

Valuations & rating:

We value the stock at 18x CEPS of Rs.33 on Q2FY28, post which we arrive at our TP of Rs.600 and upside of 6% from current levels. Key Risk- Delay in new park commissioning, further drop in footfalls

Company website: https://www.wonderla.com/

Click to download the full Wonderla Holidays Company Update

Analyst:

• Rahul Dani - Research Analyst, Institutional Equities (NISM-201500034725)
• Riya Shah - Research Associate, Institutional Equities (NISM-201800191080)

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