Buy Wonderla Holidays, target Rs 415: ICICI Direct

ICICI Direct has a buy call on Wonderla Holidays Ltd. with a target price of Rs 415. The current market price of Wonderla Holidays Ltd. is Rs 344.5. Time period given by the brokerage is 12-18 Months when Wonderla Holidays Ltd. price can reach defined target.

Wonderla Holidays Ltd., incorporated in 2002, is a mid-cap company with a market cap of Rs 1946.45 crore.

Investment rationale by ICICI Direct


Introduction of new rides and a new park at Hyderabad will continue to keep footfall growth healthy in coming years. This, coupled with lower GST rates (from 28% to 18%) will not only boost footfall growth but also act a lever to boost margins (led by operating leverage benefit). Also, the company’s focus on increasing non-ticket revenues is expected to drive margins. In addition, a healthy balance sheet (debt free in FY18) and revenue & EBITDA CAGR of 13.5% and 19.1%, respectively, in FY18-20E demand premium valuations. Hence, we have positive view on the stock. We arrive at a DCF based target price of Rs 415.