Wonderla Holidays
BSE SENSEX
25,838
S&P CNX
7,899
22 April 2016
Update
| Sector:
Others
CMP: INR390
TP:INR370 (-5%)
Downgrade to Neutral
Multiple headwinds ahead
Cutting estimates; downgrading to Neutral
Stock Info
Bloomberg
Equity Shares (m)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
M.Cap. (INR b)
M.Cap. (USD b)
Avg Val ( INR m)
Free float (%)
WONH IN
56.5
430/242
2/37/48
21.8
0.3
34.3
29.0
Post our recent conversation with the management, we surmise that footfall growth
at WONH’s recently launched Hyderabad Park would be slower than we had
anticipated.
Footfalls at its Bangalore and Kochi Parks have been impacted by the ongoing heat
wave and forecasts of an above-average monsoon do not portend well.
Launch of new park coupled with lower than average price hikes (~5% against
historical levels of ~10%) in existing parks will lead to EBITDA margin decline of
450bp in FY17.
We are cutting our estimates and downgrading our stock rating to Neutral in light of
the near-term challenges.
Financials Snapshot (INR b)
Y/E Mar
2016E 2017E 2018E
Sales
2.0
2.8
3.6
EBITDA
0.8
1.1
1.4
NP
0.6
0.6
0.8
EPS (INR)
9.9
11.3
14.2
Gr. (%)
10.1
14.3
25.9
BV/Sh. (INR)
70.6
78.9
90.2
RoE (%)
14.7
15.1
16.8
RoCE (%)
21.0
21.4
23.9
P/E (x)
39.6
34.6
27.5
P/BV (x)
5.5
4.9
4.3
Shareholding pattern (%)
As On
Promoter
DII
FII
Others
Dec-15 Sep-15 Dec-14
71.0
3.2
10.4
15.4
71.0
3.3
9.1
16.5
71.0
2.1
7.9
19.1
Management expects footfalls of 0.7m for the Hyderabad Park in FY17
The Hyderabad Park had a pre-launch in the first week of April, followed by an
official launch on April 20, 2016. Within the first 10 days, the park achieved
footfalls of ~50,000. WONH targets footfalls of 0.7m in FY17, which it expects to
ramp up to 1m/year in three years. The management highlights that footfalls in the
second year are usually flattish; the ramp-up happens post that due to word of
mouth publicity. We now factor in footfalls of 0.7m in FY17, with growth of 15% in
FY18 (v/s 30% estimated earlier).
Guides revenue of INR650m from Hyderabad Park, with margins at 25-30%
The management expects F&B realization to be INR150, net ticket realization (net
of tax) to be INR650 and other realizations to be INR100. Overall, it targets gross
revenue of INR600m-650m from the Hyderabad Park in FY17. It expects margins of
25-30%, which could expand to 30-35% in FY18, if annual footfalls are close to 1m
then. WONH targets ad spends of INR80m for the Hyderabad Park in FY17, close to
13% of revenue, higher than the normal 10% annual target, given first year of
operations.
FII Includes depository receipts
Stock Performance (1-year)
500
425
350
275
200
Wonderla Holiday
Sensex - Rebased
Bangalore and Kochi Parks seeing slowdown in footfalls due to extreme
weather
The management highlighted that footfalls might get impacted due to early onset
of summer in 4QFY16 (4Q is also the weakest quarter, usually) and the ongoing
heat wave across India in 1QFY17. Temperatures are soaring above 40 degrees in
Kochi and Bangalore. At such temperatures, people prefer indoor alternatives like
malls to open air theme parks. The Indian Meteorological Department as well as
SkyMet have predicted above average monsoon in 2016. This too could adversely
impact footfalls; historically, heavy rainfall has deterred footfalls. We now factor in
a footfall growth of 3% for FY17, as against our earlier estimate of 4%.
Niket Shah
(Niket.Shah@MotilalOswal.com); +91 22 39825426
Chintan Modi
(Chintan.Modi@MotilalOswal.com); +912239825422/Kaustubh
Kale
(Kaustubh.Kale@MotilalOswal.com); +912230102498
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.

Wonderla Holidays
Margins to be impacted by lower than normal price hike and Hyderabad
Park
WONH has been taking an average price hike of ~10% annually and had taken ~25%
price hike in FY16 to cushion the impact of service tax, which it has been providing
for. WONH has now taken price hikes of just 4-5% in FY17 after the steep hike last
year. We believe the price hikes would not cover the increase in costs fully and
margins could be impacted by 100-200bp in FY17 for Bangalore and Kochi Park. We
estimate realization growth at 5% against 10% earlier for FY17. Margins could be
under further pressure due to first year of Hyderabad operations and consequent
higher ad spends. We expect margins to contract by 450bp in FY17 to 38% from
42.5% in FY16. However, we believe with (1) ticket realization growth rebounding to
10% for Bangalore and Kochi, (2) promotional spends for Hyderabad normalizing in
FY18, and (3) operating leverage setting in at Hyderabad, EBITDA margin would
expand 200bp to 40% in FY18, which is still below FY15 margin of 44.3%.
Cutting estimates; downgrading to Neutral
We cut our estimates to factor in subdued growth at Kochi and Bangalore Parks and
slower than expected ramp-up in Hyderabad Park in FY18. We lower our revenue
estimates by 7% for FY17 and by 9% for FY18, building in margin contraction of
450bp in FY17 and expansion of 200bp in FY18, translating into PAT cut of 13% for
FY17 and 14% for FY18. We expect WONH to register 35% revenue CAGR and 20%
PAT CAGR over FY16-18. Negative free cash flows of INR160m are likely over two
years. We believe valuations at 27.5x FY18E EPS are rich and downgrade WONH to
Neutral.
Our target price of INR370 (26x FY18E EPS) implies 5% downside.
22 April 2016
2

Wonderla Holidays
Exhibit 1: Hyderabad Park footfalls trend
Footfalls (m)
15%
15%
10%
Yoy Growth
Exhibit 2: Hyderabad Park ticket realizations
Average ticket realisation (INR)
10%
10%
10%
Yoy Growth
10%
10%
8%
5%
650
715
787
865
952
1,047
0.70
FY17E
0.81
FY18E
0.93
FY19E
1.02
FY20E
1.10
FY21E
1.15
FY22E
FY17E
FY18E
FY19E
FY20E
FY21E
FY22E
Source: Company, MOSL
Source: Company, MOSL
Exhibit 3: Hyderabad Park F&B realizations
F&B Realization Hyderabad (INR)
20%
18%
YoY Growth
Exhibit 4: Hyderabad Park ticket realizations
Total revenue (INR m)
30%
29%
24%
21%
1,586
18%
1,872
Yoy Growth
16%
15%
283
15%
150
FY17E
180
212
246
326
630
817
FY18E
1,058
1,308
FY18E
FY19E
FY20E
FY21E
FY22E
FY17E
FY19E
FY20E
FY21E
FY22E
Source: Company, MOSL
Source: Company, MOSL
Exhibit 5:
Key
assumptions
Absolute
Kochi Footfalls (In m)
Bangalore Footfalls (In m)
Hyderabad Footfalls (in m)
Total Footfalls
Kochi Ticket realization (INR)
Bangalore Ticket realization (INR)
Hyderabad Ticket realization (INR)
Bangalore (no of rooms)
Occupancy rate (%)
Growth
Footfall growth
Kochi
Bangalore
Total Footfalls
Ticket realization growth
Kochi
Bangalore
FY10
0.89
0.72
1.61
327
423
FY11
1.11
0.92
2.03
336
440
FY12
1.18
1.08
2.26
383
489
FY13
1.21
1.13
2.34
423
545
84
34%
FY14
1.10
1.19
2.29
477
598
84
32%
FY15
1.09
1.25
2.34
556
672
88
45%
FY16E
1.02
1.18
2.20
656
787
88
45%
FY17E
1.06
1.21
0.70
2.97
689
826
650
88
50%
FY18E
1.10
1.27
0.81
3.17
758
908
715
88
55%
-1%
14%
5%
10%
-3%
24%
28%
26%
3%
4%
6%
18%
11%
14%
11%
3%
5%
4%
10%
11%
-9%
5%
-2%
13%
10%
-1%
5%
2%
17%
12%
-6%
-6%
-6%
18%
17%
3%
3%
35%
4%
5%
7%
5%
10%
5%
10%
Source: Company, MOSL
22 April 2016
3

Wonderla Holidays
Story in charts
Indian amusement park industry still at nascent stage
Exhibit 6: Total footfalls of India’s amusement parks is less than individual global amusement parks
Visitors in 2013 (in m)
18.6
17.2
16.2
14.1
11.2
6.0
Magic Kingdom, US
Tokyo Disneyland
Disneyland
California, US
Tokyo DisneySea
Walt Disney World
Resort, US
Total India
Source: Company, MOSL
Wonderla has a first-mover advantage with rich operating experience
Exhibit 7: Kochi park footfall trend
Kochi Park Footfalls (m)
24%
10%
-1%
6%
YoY growth
Exhibit 8: Bangalore park footfall trends
Bangalore Park Footfalls (m)
28%
14%
2%
18%
5%
5%
5%
1.18
-6%
3%
5%
YoY growth
3%
-9%
-1%
3%
-6%
4%
0.82 0.90 0.89 1.11 1.18 1.21 1.10 1.09 1.02 1.06 1.10
0.62 0.63 0.72 0.92 1.08 1.13 1.19 1.25
1.21 1.27
Source: Company, MOSL
Source: Company, MOSL
Exhibit 9: Average ticket realization in Kochi park
Average Ticket Realisation Kochi (INR)
YoY Growth
14%
10%
3%
298
327
336
383
423
477
556
656
10%
13%
10%
5%
689
758
17%
18%
Exhibit 10: Average ticket realization in Bangalore park
Average Ticket Realisation Bangalore (INR)
YoY Growth
17%
11% 11%
4%
-3%
437 423 440
10%
12%
5%
10%
489
545
598
672
787
826
908
FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16E FY17E FY18E
Source: Company, MOSL
FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16E FY17E FY18E
Source: Company, MOSL
22 April 2016
4

Wonderla Holidays
Financials and Valuations
Income Statement
Y/E Mar
Net Sales
Change (%)
EBITDA
EBITDA Margin (%)
Depreciation
EBIT
Interest
Other Income
Extraordinary items
PBT
Tax
Tax Rate (%)
Min. Int. & Assoc. Share
Reported PAT
Adjusted PAT
Change (%)
2011
896
30.2
459
51.2
118
341
0
124
0
465
128
27.6
0
337
337
122.1
2012
1,131
26.2
558
49.3
116
442
0
14
0
456
144
31.6
0
312
312
-7.4
2013
1,378
21.9
625
45.4
119
507
22
15
0
500
164
32.8
0
336
336
7.8
2014
1,536
11.4
703
45.8
132
571
16
24
0
579
180
31.1
0
399
399
18.7
2015
1,819
18.4
805
44.3
162
643
17
102
0
729
223
30.6
0
506
506
26.9
2016E
1,965
8.0
835
42.5
189
646
17
190
0
819
262
32.0
0
557
557
10.1
2017E
2,850
45.0
1,083
38.0
287
796
22
162
0
936
300
32.0
0
637
637
14.3
(INR Million)
2018E
3,554
24.7
1,422
40.0
357
1,064
22
137
0
1,180
378
32.0
0
802
802
26.0
Balance Sheet
Y/E Mar
Share Capital
Reserves
Net Worth
Debt
Deferred Tax
Total Capital Employed
Gross Fixed Assets
Less: Acc Depreciation
Net Fixed Assets
Capital WIP
Investments
Current Assets
Inventory
Debtors
Cash & Bank
Loans & Adv, Others
Curr Liabs & Provns
Curr. Liabilities
Provisions
Net Current Assets
Total Assets
2011
420
290
710
168
36
915
1,685
755
931
77
0
57
15
3
3
37
150
54
96
-93
914
2012
420
518
938
216
34
1,188
2,078
868
1,210
44
0
143
18
2
25
98
208
105
104
-65
1,189
2013
420
780
1,200
210
37
1,446
2,420
981
1,440
57
0
163
28
5
29
102
213
86
128
-50
1,447
2014
420
1,079
1,499
239
33
1,772
2,553
1,099
1,455
201
0
348
33
3
200
111
231
90
141
116
1,772
2015
565
2,999
3,564
151
-11
3,705
2,695
1,302
1,394
398
1,943
232
41
5
83
102
261
91
169
-29
3,705
2016E
565
3,424
3,989
250
-11
4,228
4,175
1,491
2,685
39
1,500
307
45
6
76
180
303
99
203
4
4,228
(INR Million)
2017E
565
3,895
4,460
250
-11
4,699
5,375
1,777
3,598
57
1,000
446
72
8
169
198
403
159
244
44
4,699
2018E
565
4,531
5,096
250
-11
5,336
6,525
2,134
4,391
71
1,000
356
86
10
42
218
482
190
293
-127
5,336
22 April 2016
5

Wonderla Holidays
Financials and Valuations
Ratios
Y/E Mar
Basic (INR)
EPS
Cash EPS
Book Value
DPS
Payout (incl. Div. Tax.)
Valuation(x)
P/E
Cash P/E
Price / Book Value
EV/Sales
EV/EBITDA
Dividend Yield (%)
Profitability Ratios (%)
RoE
RoCE
Turnover Ratios (%)
Asset Turnover (x)
Debtors (No. of Days)
Inventory (No. of Days)
Creditors (No. of Days)
Leverage Ratios (%)
Net Debt/Equity (x)
0.2
0.2
0.2
0.0
-0.5
-0.3
-0.2
-0.2
1.0
1
6
18
1.0
1
6
31
1.0
1
7
23
0.9
1
8
21
0.5
1
8
18
0.5
1
8
18
0.6
1
9
20
0.7
1
9
19
56.3
50.5
37.8
44.8
31.4
40.7
29.6
37.8
20.0
27.4
14.7
21.0
15.1
21.4
16.8
23.9
41.1
30.9
10.9
14.4
31.4
0.5
43.6
33.0
6.2
12.2
27.4
0.4
39.6
29.5
5.5
11.3
26.6
0.5
34.6
23.9
4.9
7.8
20.4
0.6
27.5
19.0
4.3
6.3
15.6
0.6
8.0
10.8
16.9
1.5
21.7
7.4
10.2
22.3
1.5
23.5
8.0
10.8
28.6
1.5
21.9
9.5
12.6
35.7
2.0
24.9
9.0
11.8
63.1
1.5
19.7
9.9
13.2
70.6
2.0
23.8
11.3
16.3
78.9
2.5
26.0
14.2
20.5
90.2
2.5
20.6
2011
2012
2013
2014
2015
2016E
2017E
2018E
Cash Flow Statement
Y/E Mar
Adjusted EBITDA
Non cash opr. exp (inc)
(Inc)/Dec in Wkg. Cap.
Tax Paid
Other operating activities
CF from Op. Activity
(Inc)/Dec in FA & CWIP
Free cash flows
(Pur)/Sale of Invt
Others
CF from Inv. Activity
Inc/(Dec) in Net Worth
Inc / (Dec) in Debt
Interest Paid
Divd Paid (incl Tax) & Others
CF from Fin. Activity
Inc/(Dec) in Cash
Add: Opening Balance
Closing Balance
2011
459
123
-33
-108
-114
328
50
378
0
7
56
0
-303
-41
-49
-392
-8
11
3
2012
558
14
18
-139
-4
447
-392
55
0
4
-388
0
46
-11
-73
-37
22
3
25
2013
625
16
-2
-151
-2
486
-374
112
0
3
-371
0
-15
-23
-73
-111
4
25
29
2014
703
21
-19
-198
-6
502
-270
232
0
11
-259
0
29
-27
-74
-71
172
29
200
2015
805
99
-23
-252
-67
562
-369
193
-1,943
139
-2,173
1,700
-88
-21
-99
1,493
-179
200
21
2016E
835
190
22
-262
0
785
-1,122
-336
443
0
-679
0
99
-17
-133
-51
55
21
76
2017E
1,083
162
53
-300
0
998
-1,218
-220
500
0
-718
0
0
-22
-166
-187
93
76
169
(INR Million)
2018E
1,422
137
43
-378
0
1,225
-1,164
60
0
0
-1,164
0
0
-22
-166
-187
-127
169
42
22 April 2016
6

Wonderla Holidays
NOTES
22 April 2016
7

Disclosures
Wonderla Holidays
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MOSt and/or its affiliates and/or employees may have interests/positions, financial or otherwise of over 1 % at the end of the month immediately preceding the date of publication of the research in the securities mentioned in this
report. To enhance transparency, MOSt has incorporated a Disclosure of Interest Statement in this document. This should, however, not be treated as endorsement of the views expressed in the report.
Motilal Oswal Securities Limited is registered as a Research Analyst under SEBI (Research Analyst) Regulations, 2014. SEBI Reg. No. INH000000412
Pending Regulatory inspections against Motilal Oswal Securities Limited:
SEBI pursuant to a complaint from client Shri C.R. Mohanraj alleging unauthorized trading, issued a letter dated 29th April 2014 to MOSL notifying appointment of an Adjudicating Officer as per SEBI regulations to hold inquiry and
adjudge violation of SEBI Regulations; MOSL replied to the Show Cause Notice whereby SEBI granted us an opportunity of Inspection of Documents. Since all the documents requested by us were not covered we have requested to
SEBI vide our letter dated June 23, 2015 to provide pending list of documents for inspection.
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The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the research analyst(s) was, is, or will be directly or
indirectly related to the specific recommendations and views expressed by research analyst(s) in this report. The research analysts, strategists, or research associates principally responsible for preparation of MOSt research receive
compensation based upon various factors, including quality of research, investor client feedback, stock picking, competitive factors and firm revenues
Disclosure of Interest Statement
Analyst ownership of the stock
Served as an officer, director or employee
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Regional Disclosures (outside India)
This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which
would subject MOSt & its group companies to registration or licensing requirements within such jurisdictions.
For Hong Kong:
This report is distributed in Hong Kong by Motilal Oswal capital Markets (Hong Kong) Private Limited, a licensed corporation (CE AYY-301) licensed and regulated by the Hong Kong Securities and Futures
Commission (SFC) pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SFO”. As per SEBI (Research Analyst Regulations) 2014 Motilal Oswal Securities (SEBI Reg No. INH000000412) has
an agreement with Motilal Oswal capital Markets (Hong Kong) Private Limited for distribution of research report in Kong Kong. This report is intended for distribution only to “Professional Investors” as defined in Part I of Schedule 1 to
SFO. Any investment or investment activity to which this document relates is only available to professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these securities,
products and services in any jurisdiction where their offer or sale is not qualified or exempt from registration. The Indian Analyst(s) who compile this report is/are not located in Hong Kong & are not conducting Research Analysis in
Hong Kong.
Motilal Oswal Securities Limited (MOSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under applicable state laws in the United States. In addition MOSL is not a
registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers Act" and together with the 1934 Act, the "Acts), and under applicable state laws in the United States. Accordingly, in the
absence of specific exemption under the Acts, any brokerage and investment services provided by MOSL, including the products and services described herein are not available to or intended for U.S. persons.
This report is intended for distribution only to "Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as "major institutional investors"). This
document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which this document relates is only available to major institutional investors and will be
engaged in only with major institutional investors. In reliance on the exemption from registration provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and interpretations thereof by
the U.S. Securities and Exchange Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., MOSL has entered into a chaperoning agreement with a U.S. registered broker-dealer, Motilal Oswal
Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be executed within the provisions of this chaperoning agreement.
The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S. registered broker-dealer, MOSIPL, and therefore,
may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public appearances and trading securities held by a research analyst account.
For Singapore
Motilal Oswal Capital Markets Singapore Pte Limited is acting as an exempt financial advisor under section 23(1)(f) of the Financial Advisers Act(FAA) read with regulation 17(1)(d) of the Financial Advisors Regulations and is a
subsidiary of Motilal Oswal Securities Limited in India. This research is distributed in Singapore by Motilal Oswal Capital Markets Singapore Pte Limited and it is only directed in Singapore to accredited investors, as defined in the
Financial Advisers Regulations and the Securities and Futures Act (Chapter 289), as amended from time to time.
In respect of any matter arising from or in connection with the research you could contact the following representatives of Motilal Oswal Capital Markets Singapore Pte Limited:
Varun Kumar
Varun.kumar@motilaloswal.com
Contact : (+65) 68189232
Office Address:21 (Suite 31),16 Collyer Quay,Singapore 04931
Kadambari Balachandran
kadambari.balachandran@motilaloswal.com
(+65) 68189233 / 65249115
For U.S
22 April 2016
Motilal Oswal Tower, Level 9, Sayani Road, Prabhadevi, Mumbai 400 025
Phone: +91 22 3982 5500 E-mail: reports@motilaloswal.com
Motilal Oswal Securities Ltd
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