Shares of Wonderla Holidays hit a fresh 52-week high of ₹390.35 on the BSE in today's trade. The stock surpassed its previous high of ₹384.80, hit on August 26, 2022.
Since the beginning of the month, the stock has been moving higher, rising from 240.45 levels to 390, delivering a return of 62.05 percent.
The stock clocked a 20 percent upper circuit at ₹336.05 on August 11 after the company's profit jumped sevenfold to ₹64.4 crore when compared to the March quarter.
Since its Q1 result announcement on August 11, the stock has gone from ₹279 to ₹378 levels in just 11 trading sessions, delivering a return of over 35.48. At current levels, the stock is trading 98.55 percent above its 52-week low of ₹196.6.
The company posted a loss of ₹14 crore in the first quarter of 2020 due to the pandemic, and it posted a loss of ₹15.8 crore in the second quarter of 2020. The losses continued into the second quarter of 2021. But finally, it ended with a profit of ₹4.5 crore in the third quarter of 2021.
In the June 2022 quarter, the revenue from operations nearly doubled to ₹152.3 crore from ₹59.4 crore. In Q1FY23, the operating profit increased from a loss of ₹10.1 crore in the previous quarter of last year to ₹91.3 crore. The EBITDA margin for the June quarter stood at 61.11%. According to data from Trendlyne, the company has zero debt.
The strong earnings were largely supported by the strong recovery in footfalls across parks, which increased by 24% to 1.12 million during the quarter. While the Bengaluru park saw 7% footfall growth over pre-Covid levels, the Hyderabad and Kochi parks both clocked 38–39% footfall growth over pre-Covid levels, according to ICICI securities.
Footfall surpasses the pre-pandemic levels, achieving 26% revenue growth compared to Q1FY20. The blended average revenue per user (ARPU) came in at ₹1,300 in Q1FY23 vs. ₹1,275 in Q1FY20 and operating expenses rose by 18.5% over Q1FY20.
Following a strong first quarter performance, ICICI Securities turned bullish on the stock. The brokerage firm has given a 'buy' call on the stock with a target price of ₹479, implying a 26.71 percent potential upside from the July 26 closing price.
The brokerage firm earlier projected the footfalls across parks to recover to 75% of FY20 levels in FY23E and 100% in FY24E, and EBITDA of ₹0.8 bn in FY23E and ₹1.1 bn in FY24E vs. FY20 EBITDA of ₹1.0 bn. However, with stellar Q1 performance, ICICI Securities increased its total footfall and revenue assumptions by 59 and 43% for FY23 and FY24E, respectively, leading to FY23E EBITDA of ₹1.4bn, which is 37% above FY20 levels, and FY24E EBITDA of ₹1.7bn, which is 61% above FY20 levels.
With a strong Q1FY23 performance, the company has a debt-free balance sheet along with net cash and liquid investments of ₹2.0 billion as of Jun'22, which helps the company to spur future growth plans, said ICICI securities.
The company has recently signed an agreement with the Odisha State Government for the development of an amusement park in Bhubaneshwar for which it has signed a 90-year lease on 50.63 acres of land, which will entail a total Capex of Rs1.3 bn over 24–30 months, which can be funded through internal accruals.
Management estimates ticket pricing for Odisha Park to be 60% of existing parks. Further, the company remains confident of a resolution of the Local Body Tax issue in Chennai for that project to take off, it added.
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