But whatever you do, here, everybody gets a little closer. The same has been true for its established parks e.g. In order to benefit the maximum from this article, an investor should focus on the process of analysis instead of looking for good or bad aspects of the company. In his article Prof. Bakshi inverts the problem and suggests four elements of dumb behavior they are as follows: Let us now apply these to the management of Wonderla Holidays Ltd and see where they stand: Looking above one can say that the promoters of Wonderla Holidays Ltd are intelligent fanatics. Wonderla Holidays is not owned by hedge funds. Even if the companies in such businesses are not able to expand in terms of new parks, they can always show a decent growth only from incremental additions in the existing parks and inflation-linked price hikes provided they keep on managing their operations efficiently. inability to delegate, thereby curtailing growth. Many investors like to check how much of a company is owned by insiders. The growth of footfalls in parks across the world is 2-3%. Sources of revenues for the parks are entry fees, food & beverages (F&B), retail products, sponsorship and advertisements, resorts and other miscellaneous rentals. [12] Wonderla Bangalore has been ranked 1st in India and 7th best in Asia by Tripadvisor for 2014, the highest for any Amusement park in India. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions. 1,00,000 from his father to set up a small manufacturing facility for stabilisers. It is also important for an investor to identify companies where they can deploy incremental capital at higher rates of return.   Throughout his career since 1974, he had worked in professional field except for initial 4 years in manufacturing industry (Tata Steel, Jamshedpur).  He had retired as a partner of S.B. He is also a Director in TVS & Sons Ltd, the holding Company, and on the Board of several Group Companies. Sustainable and growing competitive advantages create massive shareholder wealth, provided the investor has bought the business at a right price. In the case of Wonderla Holidays Ltd, it is a good characteristic of the business that the sales of the company are on advance/cash payment basis and do not involve credit sales. If we look at the prevailing P/E ratio (56) of Wonderla Holidays Ltd, from the approach to valuation that we follow while assessing the investable P/E ratio of stocks, then we realize that the P/E of 56 is at a very high level than what we would have been willing to pay for the company. the worth of internal accruals (assuming 45% OPM) over next 3 years to fund the development of Chennai park. These are two most important ratios an investor must understand and spot what are driving these. The US is followed by Asia pacific (27%) and Europe (20%), Canada and Latin America form a small portion of the global market. Depreciation is added back as it is a non-cash charge, I am calculating the pretax owner’s earnings and hence I start with the EBIT. Read: 5 Simple Steps to Analyse Operating Performance of Companies. After the Chennai park has been set up the management intends to set up one new park every 2-3 years. He was the Chairman & Managing Director of Syndicate Bank. [2] Wonderla holidays is currently planning to open its 4th amusement park in Chennai. [9], Wonderla Kochi is the first park in India to get ISO 14001 certificate for eco-friendliness and OHSAS 18001 certificate for safety. The company is reporting healthy cash flows, also indicating that any future expansions can be done with internal accruals. Therefore, the declining profitability margins of recent quarters are a cause of concern and need to be tracked closely by investors. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. This will help her in improving her stock analysis skills. The Indian amusement park industry is 2600 Cr and there are 150 amusement parks in the country. According to the management, it takes 3-4 years for a new park to be profitable at the PAT level. The strength in the business model of any company is measured by way of its self-sustainable growth rate and the free cash flow generating the ability of the company. [10] In July 2018, Wonderla Kochi was ranked eleventh in the TripAdvisor 'Travellers' choice awards for amusement parks and water parks in Asia. It is difficult for a lot of parks to survive and thrive in the same area, hence the companies that have set up parks in a particular area have a first mover advantage. wonderla holidays is currently working on its 4th amusement park in Chennai and the park is expected to be open by the end of 2018. Charlie Munger has to say this about intelligent fanatics: “If you get an opportunity to get into a wonderful business that’s being run by an intelligent fanatic and if you don’t load up, it’s a big mistake”. When an insider holds a sizeable amount of a company’s stock, investors consider it as a positive sign because it suggests that insiders are willing to have their wealth tied up in the future of the company. Mr. M. Ramachandran is the Chairman of Wonderla Amusement Parks & Resort. The amusement park business is capital intensive. Warren Buffett has to say this about people who focus: “The difference between successful people and really successful people is that really successful people say no to almost everything”. We should be cognizant of the difference between maintenance capex and the total capex of the company. The proposed park at Chennai, as per management, is expected to cost about ₹300 cr. This is a very good sign. I will cover the ROE & ROIC in detail ahead of this report. Wonderla Kochi is situated on 93.17 acres of land, and currently, only 28.75 acres is being occupied for 56 water and land based rides. The other thing that we did is we targeted heavily for schools and colleges because this being the first year we need to be marketing a little more to the schools and colleges because we have essentially new player there, so as part of that we are giving free costumes to school kids who come to use our water parks and things like that, so that has also added to cost a little bit, but we consider it as a marketing kind of spend. The company could maintain a strong balance sheet as it funded the gap in the capex for Hyderabad park through IPO proceeds rather than going for debt funding. Companies that operate in this space need to spend money for setting up new parks, spend for new rides every 2-3 years to attract customers and get repeat footfalls and spend money for maintenance aka maintenance capex every year. We hope your memories of this visit bring you back for more exciting experiences because we’ll only be glad to meet you again. Wonderla Announces Limited Period Offer at Rs 790. Global parks get about 35% from ticket collection compared to 75-80% for Indian parks. At the end of FY16, 72% of the assets that the company held were noncurrent. While going through the conference call of February 2017 (page 13), the investor would notice that the company has got its pricing wrong in Bangalore Park as well. Global footfalls in 2011 were 196.3 million for the top 25 parks. Posted by Owner | Property Sale Price - 4 Cr Rate/Sq-yrd Rs 907.0 4900 Sq-yrd Mr. Lakshminarayanan is the Non-Executive Vice-Chairman of Wonderla Amusement Parks & Resort. Return on equity = Net income/owner’s equity, The above is the formula for calculating the ROE, However, an investor must use DUPONT analysis as to check what is driving the ROE. Promoted If you decide to trade Wonderla Holidays, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. The Reported earnings (PAT) of Wonderla vs Owners earnings (factoring the working capital changes) are as follows: Now in case of Wonderla why is the owners earnings lesser than reported earnings? [3], In the year 2000, Kochouseph Chittilappilly started the flagship amusement water themed park under the name Veegaland in Kochi, Kerala. Total revenues that it reports currently. Wonderla Holidays is not owned by hedge funds. at Bangalore as well as the newly launched park at Hyderabad. The total footfalls at both the Kochi and Bangalore parks were 22.37 lakhs. The company has no debt, strong balance sheet, growing its topline at a respectable pace, the growth is profitable as evident from the healthy ROIC’S and ROE’S. The average revenue per user (ARPU) for both the parks was 917 Rs. This article by Simply Wall St is general in nature. [11], The park features a wide variety of attractions including 55 land and water rides, a musical fountain and laser shows, and a virtual reality show. These are my views about Wonderla Holidays Ltd. Shaji has become a wayside vendor during the pandemic to take care of his family. It is then very important that the investor buys a wonderful company at a fair price. I also assume that the ending multiple at the end of 10 years would be 15X. After studying the company, I believe Wonderla Holidays Ltd has the below competitive advantages. Other players usually do not come up with competing parks within the catchment area of an existing park. Apart from being passionate about theme parks, his other interests include music, cars, reading, traveling, adventure sports and swimming. The Bangalore park is ranked #8 and the Kochi park # 15 in top 25 parks in Asia. To register for the “Peaceful Investing” workshop to be held in Mumbai on July 29, 2018: To know about the stocks in our portfolio, you may subscribe to the premium service: To learn our stock investing approach “Peaceful Investing” by videos, you may subscribe to, To download our customized stock analysis. As value investors, we need to figure out the intrinsic value of the company. So I think we will definitely try our best to make sure that we increase our non-ticket revenue and whatever you see as a result of that effort. How to do Management Analysis of Companies. The company has current investments and cash & cash equivalents to the tune of 112 Cr at the end of FY16. The EBIT and PAT at the end of FY16 were 70 Cr and 60 Cr respectively. from the IPO proceeds of ₹180 cr. The company has had nine accidents in its parks which have resulted in legal proceedings against the company.

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