FINSHIKSHA QUICK COMPANY ANALYSIS WONDERLA HOLIDAYS LTD.
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FinShiksha
Quick Company Analysis
Wonderla Holidays Ltd.
Disclaimer
The purpose of this document is purely educational in nature. The idea is to help someone kick-start
their analysis on this company. However, this is not to be construed as a recommendation of any sort
on the company or its stock. All information has been sourced from publicly available data such as
annual reports and news items and the veracity of the sources has not been independently
established. Kindly use your judgement while analysing further or using this document.
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Introduction ........................................................................................................................................ 2
Business............................................................................................................................................... 2
Revenue Drivers .................................................................................................................................. 2
Details on Individual Parks .................................................................................................................. 4
Basic Information on Each Park ...................................................................................................... 4
Financials of Each Park .................................................................................................................... 4
Wonderla Resort (Bangalore) ......................................................................................................... 5
Cost Drivers ......................................................................................................................................... 5
Ratio Analysis ...................................................................................................................................... 6
Management’s Quality........................................................................................................................ 7
Broad Valuation Parameters ............................................................................................................... 8
Introduction
Wonderla Holidays is one of the largest operators of amusement parks in India with strong presence
in South India. Wonderla’s 1st amusement park was launched in 2000 under the name ‘Veegaland’ in
Kochi by promoters of V-Guard industries Ltd – Mr. Kochouseph Chittilappilly and Mr. Arun
Chittilappilly.
Business
• Wonderla Holidays Limited operates three large amusement parks in Kochi, Bangalore and
Hyderabad and the Wonderla resort in Bangalore.
• Wonderla plans to commence a new park in Chennai which is expected to be operational by
2021. It will incur a cost of Rs. 350 Cr. for this new park.
• Company also has an in-house manufacturing facility in Kochi to manufacture amusement
rides and attractions.
Revenue Drivers
• Company’s revenue grew at a CAGR of 16% from 113 Cr. in 2012 to 278 Cr. in 2018.
• In 2018 revenue grew by 1% from 2017. The main reason for the subdued growth in 2018 was
decrease in number of footfalls. This decline was due to increase in ticket price. However the
revenue loss due to fall in footfall was partially compensated by increase in average revenue
per visitor.
Particulars 2016 2017 2018 % change in 2018
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Revenue (Lakhs)* 22,342 27,498 27,835 1%
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Average revenue per visitor (Rs.)* 877 971 1062 9%
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Average ticket revenue (Rs.)* 722 764 802 5%
Average non-ticket revenue (Rs.)* 155 214 263 23%
* Numbers as per company’s annual report and analyst presentation
• It appears that, Company tend to pass on taxes to the customers which compromise a bit on
the footfalls.
• In the past two years, the parks have registered a negative growth because of the service tax
introduced in 2015 and later a high GST slab of 28% (currently revised at 18%). A footfall drop
of 30-35% was noticed after service tax was implemented in June 2015.
• The average non-ticket revenue is continuously increasing which is a positive sign.
• The management expects to increase the share of non-ticket revenue to the global standards
which is ~34%. This will further improve the company’s margin profile. The margins for F&B
are roughly about 40% to 50% on F&B.
• Within non-ticket revenue, income from restaurants and sale of product constitute more than
70% of non-ticket revenue.
Distribution of ticket and non
ticket revenue
120%
100%
21% 23% 27%
80%
60%
40% 79% 77% 73%
20%
0%
2016 2017 2018
Ticket revenue Non ticket revenue
Breakup of non-ticket revenue
100% 5% 7%
20% 16%
80%
60% 39%
41%
40%
20% 34% 39%
0%
2017 2018
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Restaurant Product Resort Other
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Follow YouTube www.finshiksha.com Follow LinkedIn
Join FinShiksha Whatsapp Broadcast• On an average 45% of foot fall are contributed by groups of schools, colleges, corporates all
put together.
• Company is trying to move more towards retail rather than corporate bookings.
Details on Individual Parks
Basic Information on Each Park
Particulars Kochi (Before Bangalore Hyderabad
known as veega
land)
Year of commencement 2000 2005 2016 (Completed
construction in a record of
18 months)
Cost of constructions 65 crore 90 crore 250 crore
Area (Acres) 93 (Developed land 82 (Developed land 50 acres (Developed land
28.75 Acers) 39.2 Acers) 27 Acers)
No of rides 56 (22 water rides) 62 (21 water rides) 44 rides (18 water rides)
Majority footfalls from regions Kerala (>60%) Karnataka (>75%) Telangana (>95%)
Tamilnadu (20%)
The ticket prices on peak days 1100 1300 1100
Financials of Each Park
Particulars Year Kochi (Before Bangalore Hyderabad
known as
veega land)
Number of footfall (in 2016 10.5 11.87 -
lakhs) 2017 9.97 10.44 6.2
2018 8.8 9.64 6.41
CAGR growth in foot falls -5% -2% Started in 2016
from 2012-2018
Contribution to revenue 2016 39.7% 55.2% -
2017 31.2% 43.7% 20.7%
2018 29.8% 42.6% 23.5%
Revenue in lakhs 2016 8200 11400 -
2017 8484 11800 5700
2018 8218 11750 6492
CAGR growth in revenue 8% 11% -
from 2012-2018
Average revenue per visitor 2016 781 960 -
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2017 851 1130 919
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2018 934 1219 1031
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2012-2018
Average ticket revenue 2016 644 790 -
2017 680 907 659
2018 704 936 733
Average non ticket revenue 2016 138 171 -
2017 169 227 262
2018 229 283 278
• Number of footfalls in mature parks is decreasing. However average revenue per visitors in all
the parks is increasing.
• Bangalore parks contribution is highest to the revenue followed by Kochi.
• Average non-ticket revenue is growing at a faster rate than average ticket revenue in all the
parks except Hyderabad.
Wonderla Resort (Bangalore)
• This is the only resort Wonderla have as of now. Rest of the property which Wonderla has
are categorized as parks.
• Wonderla Resort in Bangalore is a three Star leisure resort attached to the amusement park
launched in March 2012.
Particulars FY18 FY 17 FY 16
Total revenue (in 111.1 119.7 106.3
million)-
Occupancy 43% 56% 42%
Average room 5014 4600 4758
rental
• The key drivers for amusement parks is rising income levels among Indian population, which
leads to increase in consumer discretionary spending thus increasing income of amusement
parks and favourable demographics in India, amusement parks have the greatest attraction
for the age group of 0-14 years.
• Another factor which can affect revenues of amusement park is growth in international tourist
arrival. Out of the foreign tourists visiting India, only 3 per cent of people visit amusement
parks compared to this 59 per cent tourists visit amusement parks in countries like the US,
Singapore and Australia.
Cost Drivers
The main cost for the company is employee benefit cost, cost of material consumed, advertising and
depreciation.
Major costs as a percentage of sales 2016 2017 2018
Employee benefit expenses (including sub- 20% 23% 24%
contracting charges)
Cost of material consumed 7% 9% 11%
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Depreciation 7% 11% 13%
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Advertising 8% 11% 9%
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Join FinShiksha Whatsapp Broadcast• Employee benefit expenses is the largest cost for the company which is in line with its peer
companies like Adlabs Imagica and Nicco parks which runs one amusement park in west
Bengal.
Employee benefit expenses as a percentage of
sales in 2018
27%
26%
26%
25%
24%
24%
23%
23%
22%
21%
Adlabs Wonderla Nicco parks
• Cost of material consumed include raw material consumed as well as purchase of stock in
trade like readymade garment, soft drinks and packed foods.
• Company is expected to have a high depreciation as Property plant and equipment along with
capital work in progress forms more than 80% of the balance sheet size. Indicating company
is into a capital intensive business.
• One important thing to note here is Wonderla is increasing its assets without increasing its
borrowings in fact company is paying back its borrowing. This indicates that the company is
using internally generated cash for capital expansion.
• Company spend is roughly 10% of company’s top line on new attractions.
Ratio Analysis
• Profitability margins were primarily affected due to opening of Hyderabad Park in 2016. Due
to the Hyderabad Park the revenue of company increased by 23% in 2017 however total
expenses increased by 66% in 2017.
Profitability Ratio (%) 2016 2017 2018
Operating profit margin 50% 30% 36%
Net profit margin 29% 13% 14%
EBIT/sales 43% 19% 22%
• Company is completely debt free in 2018.
Stability ratio 2016 2017 2018
Debt equity ratio 0.007 0.019 0
Long term debt equity ratio 0.007 0.012 0
• Company’s working capital as a percentage of sales is stable indicating company is effectively
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managing its working capital.
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Follow YouTube www.finshiksha.com Follow LinkedIn
Join FinShiksha Whatsapp Broadcast• Company has a negative cash conversion cycle. It means that the creditors of the company
are funding the working capital requirement of the company.
• The company enjoys a negative CCC as it is into B to C business it receives cash immediately
from the customers and it takes 13 days credit from creditors.
Efficiency ratio 2016 2017 2018
Cash Conversion Cycle -2 -3 -2
Working capital as percentage of sales -1% -1% -1%
• Company’s ROE has declined primarily due to decrease in net profit margin.
Return ratio (%) 2016 2017 2018
ROE 8% 5% 5%
ROCE 14% 11% 13%
• Cash flow from operating profit has been double of net profit indicating that company has
been able to maintain good liquidity in the business.
• Cash flow from investing activity has been negative indicating company is investing in CAPEX.
• Cash flow from financing activity is negative indicating company has been paying back its
loans.
Cash flow 2016 2017 2018
Cash flow from operating activities 7290 6777 8409
Cash flow from investing activities -1888 -9973 -3827
Cash flow from financing activities -2889 711 -2382
Management’s Quality
• Promoter’s holding is at 71.23% as on September 2018.
• Top 5 shareholders as on 31st march 2018
Name Shareholding in 2018
Sheela Kochouseph 12.47%
Mithun Kochouseph Chittilappily 11.1%
K Chittilappilly Trust 4.9%
Steinberg India Emerging Opportunities 2.3%
Fund Limited
Handelsbankens Tillvaxtmarknadsfond 2.2%
*Note the First 3 are included under promoter’s group
• Management’s Remuneration as a percentage of net profit.
Particulars 2015 2016 2017 2018
Remuneration as a percentage of 5% 7% 12% 15%
profit
Year on year change in net profit
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18% -43% 14% 18%
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Year on year change in remuneration 54% -7% 46% 54%
Follow YouTube www.finshiksha.com Follow LinkedIn
Join FinShiksha Whatsapp Broadcast• The board of company comprises of six Directors. Out of these three are Independent
Directors.
Broad Valuation Parameters
• Market capitalisation - 1660 crore (as on 7th Feb 2019)
• P/E Ratio - 35
• Price to sales - 5.6
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