BUY CMP (Rs) Target Price (Rs) Potential Upside Sensex Nifty 378 430 13.7% 31,159 9,625 Future looks promising Wonderla Holidays Ltd's Q4FY17 result was a mixed bag as the company reported healthy growth on sales front; however, margins were under pressure, much on expected lines. Net sales increased by 37.6% yoy while EBITDA and PAT declined by 1% and 54.4% respectively over Q4FY16. The management has guided steady growth in footfalls and realisation. We expect Chennai Park to be operational in H2FY19E, which will further aid revenue growth. Maintain BUY. Key Stock data BSE Code NSE Code Bloomberg Shares o/s, Cr (FV 5) Market Cap (Rs Cr) 3M Avg Volume 52 week H/L 538268 WONDERLA WONH :IN 5.6 2,116 40,101 419/316 Shareholding Pattern (%) Sep16 Dec16 Mar17 Promoter FII DII 70.9 5.1 12.8 70.9 1 5.7 11.1 70.9 5.8 1 1 Year relative price performance 140 Q4FY17 Result Update: The company reported net sales at Rs 61.2crs, a growth of 37.6% yoy led by 26% yoy increase in footfalls and 9% yoy increase in realisation. Banglore reported marginal revenue decline of 2% while Kochi Park reported 12% increase in sales. Higher occupancy at Banglore resort helped sales to inch up by 3% yoy. Hyderabad Park continued to show traction in terms of both footfalls and ticket pricing. Land acquisition for Chennai park is complete and work will commence in 1HFY18. EBITDA for the quarter stood at Rs 9.9crs. Increase in direct operating expenses, employee expenses and advertising & marketing expenses primarily on account of Hyderabad Park dented EBITDA margins by 860bps yoy to %. The company reported net profit of Rs 3.5crs, down by 54.4% yoy as depreciation and finance cost increased while other income declined by 44% yoy. Net profitability was lower by 1140bps yoy to 5.7%. Outlook & Valuation: has well planned expansion plans to expand footprints in tier II cities. The company has strong management, healthy balance sheet, superior margins and inhouse ride manufacturing plant at Kochi. Hyderabad Park has achieved breakeven at operating level within 1 year of operation and further growth in footfalls and ticket price will aid net profitability of the company. We estimate revenue, EBITDA and PAT to grow at a CAGR of 20.9%, 54.5% and 64.8% respectively over FY1719E. We maintain BUY on the stock with a price target of Rs 430. 120 100 80 60 May16 Jul16 Aug16 Oct16 Nov16 Jan17 Feb17 Apr17 May17 Financial Summary Particulars, Rs cr Net sales EBITDA EBITDAM (%) PAT FY15 FY16 FY17 FY18E FY19E 181.9 205.4 27 321.1 394.9 8 84.2 72.6 112.2 173.4 44.3 41.0 26.9 34.9 43.9 5 59.8 33.1 51.9 89.9 Wonderla Ni y PATM (%) 27.8 29.1 12.2 22.8 EPS, (Rs) 13.5 1 5.9 9.2 15.9 PE, (x) 41.6 35.6 64.0 41.0 23.7 Research Analyst RoE (%) 2 15.8 8.0 1 17.6 Archana Gude archana.gude@religare.com May 31, 2017
P&L Account Quarterly Particulars, Rs cr Q4FY17 Q4FY16 YoY % Q3FY17 QoQ % Net sales Direct operating expenses Purchase of stock in trade Changes in inventories of stock in trade Employee cost Advertising and marketing expenses Other expenses Total expenditure 61.2 15.4 6.6 9.9 4.8 14.8 5 44.5 11.4 8.1 7.7 33.5 37.6 35.2 96.1 61.9 21.8 45.3 92.0 5 70.1 14.9 5.8 9.7 1 15.7 56.7 1 1 138.1 1.6 53.2 5.2 9.5 EBITDA 9.9 1 13.4 25.9 EBITDAM (%) 24.8 19.1 Other income 2.4 43.9 1.4 Depreciation and amortisation expenses 6.5 2.8 133.2 7.9 18.6 EBIT 4.8 1 55.2 6.8 29.5 Finance cost 6 4.9 PBT 4.4 1 57.9 6.4 31.1 Tax 0.9 2.8 67.4 57.1 Net profit 3.5 7.6 54.4 4.2 18.2 NPM (%) 5.7 17.1 6.1 EPS, Rs 0.8
P&L Account Particulars, Rs cr FY15 FY16 FY17 FY18E FY19E Net sales Expenditure Raw material consumed Changes in inventories Employee cost Other expenses Total expenditure EBITDA Other income Depreciation PBIT Interest expenses PBT Tax PAT 181.9 11.8 27.1 63.0 10 8 1 74.6 73.0 22.3 5 205.4 14.4 0.9 31.0 76.6 121.2 84.2 18.1 13.9 88.4 87.0 27.2 59.8 27 24.7 1.1 39.1 74.8 137.4 72.6 6.3 29.3 49.7 48.4 15.3 33.1 321.1 26.4 1.2 43.0 7 146.7 112.2 9.5 43.6 78.0 76.3 24.4 51.9 394.9 27.5 47.5 83.2 156.8 173.4 10.9 49.6 134.7 132.2 42.3 89.9
Balance sheet Particulars, Rs cr FY15 FY16 FY17 FY18E Share Capital Reserves & Surplus Total Shareholder's Fund 299.9 356.4 346.5 403.0 372.8 429.3 414.5 471.0 FY19E 494.2 550.7 NonCurrent Liabilities Long term borrowings 1 5.2 9.5 109.5 159.5 Other long term liabilities Long term provision 2.0 2.8 Deferred tax liability Current Liabilities Trade payables 4.1 3.5 12.4 13.6 Short term provisions 0.9 0.8 4.9 4.9 Other current liabilities 9.8 15.9 17.0 1 Short term borrowing 12.3 14.9 2 44.8 49.2 Total liabilities 397.6 455.2 52 669.5 807.5 Fixed assets 139.4 152.8 322.6 329.0 354.4 Current work in progress 39.8 158.9 5 20 20 Non current investment Long term loans & advances 7.4 1 24.4 26.8 29.5 Other noncurrent assets Deffered Tax assets (Net) 1.1 5.2 Current Assets Current investments 194.3 84.4 75.0 75.0 Inventories 4.1 6.6 9.0 9.8 Trade receivables 0.8 0.9 2.2 Cash & cash equivalents 2 8.3 28.0 Short term loans and advances 2.3 6.7 10.7 12.8 Other current assets 1.8 Total assets 397.6 455.2 52 669.5 807.5
Cash Flow Particulars, Rs cr FY15 FY16 FY17 FY18E Profit before tax Add: Depreciation Add: Interest cost Opt. profit before working capital changes Changes in working capital Direct taxes Cash flow from operating activities 72.9 7.4 83.1 2.3 25.2 55.6 87.0 13.9 15.7 85.9 19.2 30.7 74.4 48.4 29.3 78.9 15.3 72.3 76.3 43.6 121.6 24.4 97.6 FY19E 132.2 49.6 184.3 0.9 42.3 141.1 Net cash used in Investing Activities Purchase of fixed assets 37.1 147.0 199.1 5 75.0 Sale of fixed assets 0.1 10 14 sale of Investment 36 84.0 175.9 209.9 Cash flow from investing activities 222.9 2 9 19 75.0 Cash flow from Financing Activities Proceeds from issuance of shares 17 Net proceeds from borrowings 4.3 10 5 Dividend (incl dividend tax) 9.9 19.9 1 1 1 Interest cost 1.4 19.8 7.6 Cash flow from Financing Activities 149.3 28.9 7.2 88.1 37.3 Net cash inflow/out flow 17.9 25.1 33.6 5.8 103.4 Opening Cash & Cash Equivalents 2 28.0 Closing Cash & Cash Equivalents 28.0 106.2
Key Financial ratios Particulars, Rs cr FY15 FY16 FY17 FY18E Dividend per share Rs Dividend Yield (%) Payout (%) EPS Rs Book Value per share Rs 20.1 9.0 63.1 17.1 1 7 30.8 5.9 76.0 19.7 9.2 83.4 FY19E 1 15.9 97.5 Profitability Ratios EBITDA/Total Income (%) 44.3 41.0 26.9 34.9 43.9 PBT/ Total Income (%) 40.1 42.4 17.9 23.8 33.5 NPM/Total Income (%) 27.8 29.1 12.2 22.8 RoCE (%) 27.6 22.8 1 15.2 20.7 RoE (%) 2 15.8 8.0 1 17.6 Liquidity Ratios Gross Debt Equity ratio Interest Coverage ratio 3 52.8 34.7 4 5 Current ratio 7.2 2.9 1.2 2.3 Turnover Ratios Total Asset Ratio Fixed Asset Ratio 1.4 1.1 1.0 1.2 Debtors Velocity (Days) 1 1 1 3 5 Inventory (Days) 25 18 22 21 20 Creditor Velocity (Days) 108 214 183 188 199
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