v-17 v-17 Dec-17 Jan-18 Jan-18 Feb-18 Mar-18 Mar-18 Apr-18 May-18 May-18 Jun-18 Jul-18 Aug-18 Aug-18 Sep-18 Oct-18 Oct-18 Q2FY19 Result Update Q2FY19 Result Update BUY CMP (Rs) 282 Target Price (Rs) 321 Potential Upside 13.7% Sensex 34,416 Nifty 10,376 Key Stock data BSE Code 538268 NSE Code WONDERLA Bloomberg WONH:IN Shares o/s, Cr (FV 10) 5.7 Market Cap (Rs Cr) 1,603 3M Avg Volume 36,987 52 week H/L 425/259 Shareholding Pattern (%) Mar-18 Jun-18 Sep-18 Promoter 71.0 71.0 71.2 FII 11.2 10.5 10.3 DII 5.5 5.8 5.6 Others 12.3 12.7 12.9 1 Year relative price performance 115 105 95 85 Missed the ride Wonderla Holidays posted disappointing numbers for Q2FY19, below our expectation. Its net revenue decreased by 16.4%, led by decline in footfalls. Company s EBITDA and PAT declined by 16.5% and 60% yoy respectively due to increase in overall expense and depreciation. Going forward, footfalls are expected to improve across Bangalore and Hyderabad, however Kochi would face some near term pressure. We have revised our estimates and target price to Rs 321. We maintain a Buy on the stock. Q2FY19 Result Update: Wonderla s net revenue de-grew by 16.4% yoy to Rs 41.3 cr in Q2FY19, impacted by 6.3% decrease in overall footfalls. Footfalls in Bangalore Park increased by 4%, however Hyderabad witnessed de-growth of 6% due to heavy rainfall in the region while Kochi Park footfall de-grew by 61% because of outcome of Nipah virus and floods in Kerala, during the quarter. Going forward, it is expected that Bangalore Park and resort would continue to report strong growth (grew by 9% yoy and 18.5% yoy in Q2FY19). The company posted EBITDA of Rs 9 cr, decline of 18.4% yoy, while EBITDA margin contracted 54bps YoY to 21.9%. Its PAT de-grew by 60% yoy, with decline in PAT margins by 243bps yoy to 2.3%. Sharp fall in margins was mainly due to drop in revenue & footfall and at the same time increase in overall expense & depreciation. Concall Highlights: 1) Management expects an improvement in both revenue and footfalls across all the three parks with an increase in marketing and promotional activities. Also it has maintained its EBITDA guidance of 40% in FY19. 2) Bangalore and Hyderabad parks are expected to continue its strong growth, however, near term concern would continue in Kochi Park. 3) Construction of its fourth park in Chennai is well on track. 4) Introduction of Wonder pass would help to increase footfalls and also generate F&B revenue. 5) There are no plans to add new rides but management would refurbish its existing rides, if required. Outlook & Valuation: Wonderla Holidays is well placed in leisure segment with its three parks operational in Bangalore, Hyderabad and Kochi and one resort in Bangalore. Further, the company s plans to open park in Chennai is well on track. Going forward, we believe higher discretionary spending by consumers, pickup in footfalls, promotional and marketing activity by company and more food & beverage offerings would help drive revenues of Bangalore and Hyderabad Park. Also festive season demand would add to the growth. twithstanding the near term pressures, we expect a healthy revival in revenue and footfall from Kochi Park going ahead. We remain positive on the company s growth prospects and expect its Revenue, EBIDTA and PAT to grow at CAGR of 11%, 16.8% and 22.2%, respectively over FY18-FY20E. We have revised our estimates and target price to Rs 321. We maintain a Buy on the stock. 75 65 Financial Summary - standalone Particulars, Rs cr FY17 FY18 FY19E FY20E Wonderla Nifty Midcap 100 Net revenue 262.8 270.5 248.9 261.3 EBITDA 67.0 89.1 84.6 90.1 EBITDAM (%) 25.5 32.9 34.0 34.5 APAT 33.9 38.5 37.8 42.1 APATM (%) 12.9 14.2 15.2 16.1 Research Analyst EPS (Rs) 6.0 6.8 6.7 7.5 Nirvi Ashar, MBA nirvi.ashar@religare.com PE (x) 47.0 41.4 42.1 37.8 RoE (%) 4.6 5.0 4.7 5.0 vember 1, 2018
P&L Account - standalone Particulars (cr) Q2FY19 Q2FY18 Y-o-Y % Q1FY19 Q-o-Q % Sale of services 31.3 38.9-19.5 81.3-61.5 Sale of products 10.0 10.5-4.9 22.6-55.6 Net Sales & Other Operating Income 41.3 49.4-16.4 103.9-60.2 Cost of Raw Materials 2.1 2.4-14.2 4.2-51.1 Purchase of Finished Goods 2.0 2.5-21.0 5.8-65.9 (Increase) / Decrease In Stocks 0.4 0.3 26.7-0.1 - Gross Margins 36.9 44.2-16.5 94.0-60.7 Gross Margins % 89.3 89.5-16bps 90.4-115bps Employee Cost 8.7 10.4-16.0 10.7-18.2 Other Expense 19.1 22.7-15.9 25.8-25.9 Total Expenditure 32.3 38.3-15.8 46.4-30.5 EBITDA 9.0 11.1-18.4 57.5-84.3 EBITDA Margins (%) 21.9 22.4-54bps 55.3-3,345bps Depreciation 9.9 8.9 10.5 9.9-0.1 EBIT -0.8 2.1-139.3 47.6-102.9 Other Income 2.1 1.8 17.6 2.2-7.1 Interest 0.0 0.3-100.0 0.4-100.0 PBT 1.2 3.6-65.5 49.5-97.5 Tax 0.3 1.3-76.5 16.5-98.2 PAT 0.9 2.3-59.7 33.0-97.2 PAT Margin (%) 2.3 4.7-243bps 31.7-2,947bps EPS 0.2 0.4-59.7 5.8-97.2
P&L Account - standalone Net sales 262.8 270.5 248.9 261.3 Expenditure Raw material consumed 9.6 12.4 11.1 11.6 Purchase of stock in trade 14.7 16.2 14.4 15.1 (Increase) / Decrease In Stocks -0.7 0.7 0.6 0.7 Employee cost 39.2 41.4 37.3 37.9 Other expenses 133.1 110.6 100.8 105.8 Total expenditure 195.8 181.4 164.2 171.2 EBITDA 67.0 89.1 84.6 90.1 EBITDAM (%) 25.5 32.9 34.0 34.5 Other income 12.2 7.9 7.5 7.8 Depreciation 29.3 36.5 32.4 31.4 PBIT 49.9 60.5 59.7 66.6 Interest expenses 1.3 1.2 1.5 1.8 PBT 48.5 59.3 58.2 64.8 Tax 14.6 20.7 20.4 22.7 Reported PAT 33.9 38.5 37.8 42.1 PATM (%) 12.9 14.2 15.2 16.1 EPS 6.0 6.8 6.7 7.5 Balance sheet - standalone Share Capital 56.5 56.5 56.5 56.5 Reserves & Surplus 684.2 716.1 748.3 784.8 Total Shareholder's Fund 740.7 772.6 804.8 841.3 Long term borrowings 9.0 0.0 30.0 40.0 Short term borrowing 4.9 0.0 0.0 0.0 Total Debt 13.9 0.0 30.0 40.0 Deferred tax liabilities 71.4 75.9 56.9 42.7 Long term provision 0.8 1.1 1.0 1.1 86.0 77.0 87.9 83.8 Current Liabilities Trade payables 12.4 9.9 8.9 9.3 Short term provisions 39.7 54.3 37.3 39.2 Other current liabilities 17.1 14.1 12.9 13.6 69.2 78.3 59.2 62.1 Total liabilities 895.9 928.0 951.9 987.2 Application of Assets Net Block 708.2 833.7 851.3 870.0 Current work in process 58.5 15.5 15.8 16.2 Other non-current assets 23.0 5.4 5.0 5.2 789.7 854.6 872.1 891.4 Current Assets Current investments 75.1 12.2 12.2 12.1 Inventories 9.0 7.1 6.4 6.7 Trade receivables 1.0 1.2 1.1 1.1 Cash & Bank 8.5 24.9 32.4 46.6 Short term loans and advances 0.5 0.5 0.5 0.5 Other current assets 12.2 27.6 27.4 28.7 106.2 73.4 79.8 95.8 Total assets 895.9 928.0 951.9 987.2
Cash Flow statement - standalone Profit before tax 48.5 38.5 37.8 42.1 Add: Depreciation 29.3 36.5 32.4 31.4 Add: Interest cost 1.3 1.2 1.5 1.8 Others -0.4-7.9-7.5-7.8 Operating profit before working 78.7 68.4 64.2 67.5 Changes in working capital 13.1 13.3-17.7 1.0 Direct taxes -20.7-20.7-20.4-22.7 Cash flow from operating 71.1 61.0 26.1 45.8 Net cash used in Investing Purchase of fixed assets -113.4-28.4-50.0-50.0 Others 8.9 7.9 7.5 7.8 Cash flow from investing -104.4-20.6-42.5-42.2 Cash flow from Financing Net proceeds from borrowings 12.2-13.9 30.0 10.0 Dividend (Incl dividend tax) -3.3-3.3-5.7-5.7 Interest cost -1.3-1.2-1.5-1.8 Cash flow from Financing 7.6-18.4 22.9 2.6 Net cash Inflow/Outflow -24.8 22.0 6.4 6.2 Opening Cash & Cash Equivalents 27.2 2.4 24.4 30.9 Cash with Bank 6.1 0.4 1.5 9.6 Closing Cash & Bank 8.5 24.9 32.4 46.6 Key Financial ratios - standalone Per share Data EPS (Rs) 6.0 6.8 6.7 7.5 Book value per share (Rs) 131.1 136.7 142.4 148.9 Dividend per share (Rs) 1.5 1.0 1.0 1.0 Dividend Yield (%) 0.5 0.4 0.4 0.4 Payout (%) 58.4 8.6 14.9 13.4 Profitability Ratios EBITDAM(%) 25.5 32.9 34.0 34.5 PBTM (%) 18.5 21.9 23.4 24.8 NPM (%) 12.9 14.2 15.2 16.1 RoCE (%) 5.0 6.8 6.3 6.7 RoE (%) 4.6 5.0 4.7 5.0 Efficiency Data Debt-Equity Ratio - - - - Interest Cover Ratio 28.3 43.5 34.8 32.7 Fixed Asset Ratio 0.4 0.3 0.3 0.3 Debotors (Days) 1.3 1.6 1.6 1.6 Inventory (Days) 138.4 88.6 89.0 89.0 Payable (Days) 191.6 123.5 124.0 124.0 WC (Days) -51.9-33.3-33.4-33.4 Valuation P/E 47.0 41.4 42.1 37.8 P/BV 2.2 2.1 2.0 1.9 EV/EBITDA 23.9 17.6 18.8 17.6 EV/Sales 6.1 5.8 6.4 6.1
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