Wonderla Holidays - Chennai drives growth, expansion pipeline remains key | Company Update

Wonderla Holidays Ltd. reported a better-than-expected Q4FY26 performance, with revenue growth ahead of estimates driven by the newly commissioned Chennai park. EBITDA margins came in stronger at 29.6% (vs. our estimate of 25.3%), aided by better operating leverage and improving scale-up at the Chennai property. While we broadly maintain our FY27E/FY28E revenue and EBITDA estimates, we cut our earnings estimates to factor anticipated increase in depreciation charge. We expect margins to gradually improve as the Chennai park ramps up further. However, the lack of announcement of a new park pipeline continues to remain a key monitorable for long-term growth visibility. We assign an 18x multiple to FY28E Cash EPS to arrive at our target price of Rs 615 and retain our BUY rating on the stock.

Chennai Park drives growth:

Wonderla Holidays reported strong revenue growth of 40% YoY to Rs 1,358mn, primarily driven by a 30% YoY increase in footfalls, led by the newly commissioned Chennai park (~22% of overall footfalls), along with 7% YoY growth in ARPU. On a park-wise basis, Bengaluru Park (~26% of revenue) reported 7% YoY growth, largely driven by 7% YoY improvement in ARPU, while footfalls remained flat during the quarter. Hyderabad Park (~22% of revenue) posted 3% YoY growth, supported by 5% YoY growth in ARPU despite a 1% YoY decline in footfalls. Bhubaneswar Park (~4% of revenue) reported healthy 13% YoY growth, driven by 12% YoY increase in footfalls, while ARPU remained largely flat. The newly opened Chennai Park (~22% of revenue) reported footfalls of 191k during the quarter with an ARPU of Rs 1,539, reflecting encouraging initial traction. Additionally, the Bengaluru resort business (~5% of revenue) delivered robust 25% YoY growth during the quarter.

Margins beat on operating leverage:

The company reported an OPM of 29.6% in Q4FY26 vis-à-vis 20.4% in Q4FY25, largely driven by improved operating leverage following the commencement of operations at the Chennai park. Management expects margins to improve further as the Chennai park scales up and utilization levels improve over the coming quarters. We also expect operating leverage benefits to continue, leading to margin expansion towards ~34% over the coming years.

Outlook:

The ramp-up of the Chennai park is expected to remain the key near-term growth catalyst, driving incremental revenues as operations stabilize and utilization improves over the coming quarters. However, footfalls across mature parks have largely plateaued, indicating that the future growth will increasingly depend on the ARPU expansion rather than footfall-led growth. With the current ticketing to non-ticketing revenue mix already at ~68:32, the scope for further mix-led upside also appears relatively limited, as non-ticketing spends are nearing saturation levels at certain parks. While management continues to evaluate opportunities for new park additions, with discussions underway for 1–2 potential projects, timelines remain dependent on regulatory approvals and land acquisition. Over the longer term, the company aims to expand its portfolio to ~five parks over the next three–five years, subject to execution and approvals. Given the healthy cash position post the QIP and limited near-term reinvestment opportunities, timely execution of expansion plans will remain critical to sustaining growth momentum.

Valuations, rating and Risk:

Though Q4FY26 results were ahead of our estimates, our revenue and EBITDA estimate largely remain unchanged, as our FY27E/FY28E assumptions already factor in the benefits from the Chennai park ramp-up. However, we have marginally reduced our earnings estimates to factor in the anticipated increase in depreciation charges. We value the stock at 18x FY28E Cash EPS of Rs.34, arriving at our target price of Rs.615, implying an upside potential of 21% from current levels. Key risks to our thesis include delay in announcement/execution of new parks and further decline in footfalls across mature parks.

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

*CMP is as per report published date

Click to download the full Wonderla Holidays Ltd Q4FY26 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 Q4FY26 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 drove Wonderla Holidays’ Q4FY26 growth?

The newly commissioned Chennai park was the primary growth driver, supported by strong footfalls, higher ARPU and improving operating leverage.

2. Why did margins improve significantly?

Margins improved due to better scale efficiencies, higher utilization levels and operating leverage benefits from the Chennai property.

3. What is the key long-term growth monitorable for Wonderla?

The announcement and execution of new amusement park projects remain critical for sustaining long-term growth momentum.

4. How are mature parks performing?

Mature parks are witnessing relatively stable footfalls, with future growth increasingly dependent on ARPU expansion and customer spending.

5. What are the major risks for Wonderla Holidays?

Key risks include delays in expansion projects, softer discretionary spending and lower-than-expected footfalls at existing parks.

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