Wonderla Holidays: Chennai Takes The Baton As Mature Parks Plateau - Company Update

We upgrade Wonderla Holidays to BUY from HOLD, as we revise earnings estimates upward by ~5% and roll forward our valuation to Q3FY28E. The company continued to deliver ARPU-led growth at mature parks during the quarter, while footfall growth remained muted; however, the newly commissioned Chennai park, the largest in its portfolio, reported encouraging early footfalls and a positive EBITDA contribution in its first month, positioning it as a key growth catalyst in the coming quarters. With mature parks likely to see low single-digit growth, incremental growth will increasingly hinge on Chennai’s ramp-up and timely addition of new parks, and given the healthy cash balance post-QIP, accelerating expansion plans will be critical to sustain long-term growth visibility and support current valuation. We remain cautiously optimistic.

ARPU drives growth:

Wonderla Holidays reported 11% YoY revenue growth to Rs.1,345mn in Q3FY26, primarily driven by an 8% YoY increase in ARPU to Rs.1,377, while overall footfalls remained flat YoY. Bengaluru Park (~34% of revenue) posted 9% YoY revenue growth to Rs.461 mn, supported by 6% ARPU growth and 3% YoY footfall growth. Kochi Park (~21% of revenue) saw 11% YoY revenue decline, largely due to a 19% YoY drop in footfalls following government regulations, despite 10.4% YoY ARPU growth. Hyderabad Park (~28% of revenue) reported a 5% YoY revenue decline, driven by an 7% YoY fall in footfalls, partly offset by 3% YoY ARPU growth. Bhubaneswar Park (~2% of revenue) witnessed a 24% YoY revenue decline, with a 29% YoY drop in footfalls, though ARPU increased 10% YoY. The newly commissioned Chennai park saw a strong first month, recording ~75k footfalls, Rs.119 mn revenue, and ARPU of Rs.1,596. Meanwhile, the Bengaluru resort delivered 71% YoY revenue growth to Rs.82 mn, driven by higher occupancy. OPM stood at 29.9%, down 68 bps YoY, impacted by higher other expenses. EBITDA for the quarter stood at Rs.402mn, a growth of 8% YoY. PAT for the quarter stood at Rs.144.8mn, a decline of 29% YoY, the decline is largely on account of higher deprecation charge (+44% YoY), and an exceptional item relating to the new labor code

Chennai Park, key catalyst for growth:

The Chennai Park has made a strong and encouraging debut, highlighting Wonderla’s execution capability in commissioning large-format parks. In its first month of operations, the park recorded ~75,000 footfalls, generated Rs.119 mn in revenue with an ARPU of Rs.1,596 and delivered a positive EBITDA contribution despite launch-related costs. Early traction has been healthy despite weather-related disruptions and initial teething issues, pointing to robust demand in a large, underpenetrated catchment. Management’s North Star for Chennai is to scale the park to Bengaluru-like levels over the next 3–4 years, and with ramp-up tracking ahead of expectations, Chennai is well placed to emerge as a key growth engine.

Outlook:

The ramp-up of the Chennai park is expected to be the key near-term catalyst for growth, providing incremental revenues as operations stabilizes over the coming quarters. Beyond Chennai, footfalls across mature parks have largely plateaued, implying that growth will increasingly rely on ARPU enhancement rather than volume expansion. With the current 67:33 ticketing to non-ticketing revenue mix, scope for further mix-led upside appears limited, as non-ticketing expenditure is already approaching saturation at certain parks. While management remains in discussions for new park additions, with 1–2 parks potentially materializing, timelines remain contingent on regulatory approvals and land acquisition. Over the longer term, management aspires to expand the portfolio to ~6–7 parks over the next 5–8 years, subject to execution and approvals. Given the healthy cash balance post-QIP and limited near-term reinvestment avenues, timely execution on expansion plans will be critical to sustain growth momentum and prevent dilution of return ratios (ROCE/ROE) from idle cash and slower asset turnover.

Valuations & rating:

We value the stock at 18x CEPS of Rs.33 on Q3FY28, post which we arrive at our target price of Rs. 610 and upside of 18% from current levels. Key Risk- Lack of new park announcement and further drop in footfalls at mature park.

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

*CMP is as per report published date

Click to download the full Wonderla Holidays Ltd Q3FY26 Company Update

Analyst:

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

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FAQs on Wonderla Holidays Ltd Q3FY26 Company Update

These FAQs summarize key insights from MNCL’s institutional equity research on Wonderla Holidays, highlighting performance trends, growth drivers and key risks.

1. What is MNCL’s rating and target price for Wonderla Holidays?

MNCL has upgraded the stock to BUY with a target price of ₹610, implying ~18% upside from the current market price.

2. What is currently driving the company’s growth?

Revenue growth is primarily driven by higher ARPU across mature parks, while the newly launched Chennai park is expected to contribute incremental growth as it ramps up.

3. Why is the Chennai park important?

The Chennai park delivered strong early traction with ~75,000 footfalls, ₹119 million revenue and positive EBITDA in its first month, positioning it as the key growth catalyst over the next few years.

4. What is the outlook for existing parks?

Footfalls at mature parks have largely plateaued, and future growth is expected to be driven mainly by pricing (ARPU) rather than volume expansion.

5. What are the key risks to monitor?

Delay in new park announcements, regulatory or land acquisition challenges, and further decline in footfalls at mature parks could impact growth visibility.

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