Wonderla Holidays Limited (WONDERLA) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Wonderla Holidays Limited Q2 and H1 FY '26 Earnings Conference Call hosted by AMBIT Capital. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Shamit Ashar from AMBIT Capital. Thank you, and over to you, sir.

Yes. Good afternoon, everyone. On behalf of AMBIT Capital, I would like to welcome you all to the Second Quarter and First Half FY '26 Earnings Conference Call for Wonderla Holidays Limited. From the management, we have with us Mr. Arun Chittilappilly, Managing Director; Mr. Saji Louiz, CFO; and Mr. Dheeran Choudhary, COO of the company. We would now like to begin the call with opening remarks from the management, post which we will have the forum open for an interactive Q&A session. Thank you, and over to you, Arun and Saji.

Thank you. Good afternoon, everyone. This is Arun. On behalf of Wonderla Holidays, I would like to extend all of you a warm welcome to our Q2 and H1 FY '26 earnings conference call. Joining me today is our CFO, Mr. Saji Louiz; and our COO, Dheeran Choudhary. I trust all of you had the opportunity to go through our results and accompanying investor presentation. This quarter marks a defining moment in Wonderla's journey. We have achieved our best ever Q2 performance, footfalls and as well a sharp improvement in profitability, a 25% year-on-year growth in total income and an 8x jump in EBITDA. This highlights the resilience of our business model and the power of our brand. Our multiple footfall and branding campaigns along with enhanced right sales strategies with digital channels are now driving almost half of our bookings. This reflects our success of our integrated digital strategy and the growing adoption of online channels by our guests. Isle by Wonderla, our new resort in Bangalore continues to deepen guest engagement and broaden revenue base. The resort business has delivered best ever Q2 as well with revenue upside of about INR 2 crores and EBITDA improvement of about 2%. On the non-ticketing front, we have sustained double-digit growth on our spend, driven by a mix of volume and value proposition. Our fifth park in Chennai is progressing rapidly towards completion, and we expect to commence commercial operations from next month, December 2025. Looking ahead, we remain focused on innovation, guest experience and discipline in capital allocation. With a strong brand, diversified portfolio and a robust balance sheet, we are confident of sustaining growth and delivering long-term value to our investors. With that now I hand over to Saji, our CFO, for a detailed analysis of our financial performance. Over to you, Saji.

Thank you, Arun. Good afternoon, everyone. So let me take you through the financial highlights for Q2 and H1 FY '26. Our revenue from operations for Q2 FY '25 stood at INR 80.1 crore as compared to INR 6.8 crore, reflecting a growth of about 19% Y-o-Y basis. EBITDA for the quarter stood at INR 74.84 crores up by 8x on Y-o-Y basis. EBITDA margin for the quarter stood at 9% approximately. And during the quarter, our reported PAT is negative INR 1.75 crore, which improved by INR 7.62 crore on Y-o-Y basis without considering the exceptional items. Moving on to the half year performance. Our revenue from operations for H1 FY '26 stood at INR 248.4 crores as compared to INR 240.3 crores, reflecting a growth of about 3% on Y-o-Y basis. The EBITDA for the period stood at INR 84.16 crore, and then profit after tax for the period stood at INR 50.8 crore. Now let me take you through the park wise footfall. In Q2 Fy '26 our Bangalore Park received a footfall of 1.96 lakh, Kochi Park 1.92 lakhs, Hyderabad about 93,000, and Bhubaneswar 24,000. In H1 FY '26, Bangalore recorded a footfall of 5.19 lakhs, Kochi 4.28 lakhs, Hyderabad 3.55 lakhs, and Bhubaneswar with 1.20 lakhs. With this, I conclude my speech and open the call forum for Q&A session. Thank you.

[Operator Instructions] The first question is from the line of Harsh Gupta from Ionic Wealth.

Arun and team congratulations on a very good set of numbers. I had a couple of questions. First is, I believe Wonderla has been making some of the rides or designing some of the rides around 1/3 of the rides on their own. Could you please explain the process of how you're benefiting from this economy scale-driven indigenization? Do you design and then send the rides to be made by a contractor or a subcontractor and the other 2/3 of the rides are you just buying secondhand from Europe or East Asia? How do we benefit from being a multiple chain -- multiple park chain in terms of designing and manufacturing your parks to reduce costs while remaining safe? So that's my first question.

So this is something that we've been doing ever since the company was incorporated in way back in the 90s. The reason why we make a lot of our own rides is prohibitively expensive to buy everything from outside. And as you know, India's amusement park industry is in a nascent state. So there are not too many manufacturers who manufacture rides for us. So consequently, we have built the capability to design, build and operate and maintain a lot of the rides. So when we do that, I think the cost benefit is huge. So like we can build rides for a fraction of the price of what a foreign company would charge. Like we have, for example, the Ferris wheel that we built cost us a few crores, maybe INR 3 crores, INR 4 crores, but the same ride if I had to import from Germany will cost like maybe 3x or 4x as much. So that is the rough calculation. So importing will be about 4x as expensive. Other advantage for us is safety because we are able to like quickly repair if there is any issue because we have designed and built the ride ourselves. It's easier for us to repair it. We use Indian parts. In fact, we use our own parts for a lot of the rides. So these are some of the advantages.

And that makes a lot of sense. But where is the unit? Where is the factory unit where we manufacture some of these rides ourselves?

We are in Kochi, we are in Hyderabad, we are in Bangalore.

Okay. So it happens in situ in all the 3 parks?

Yes, yes.

It happens on the [ indiscernible ].

It happens on the all of the parks we have, the limit. Yes.

Okay. The second question is, after Bhubaneswar and Chennai, there has been no announcement on any future parks so far. In Bhubaneshwar, I believe we got a very multi-decade lease for around INR 6 crore. Is the plan still to [technical Difficulty].

Yes. So I think we are looking at -- yes, we are looking at various cities. We have offers from various state governments. It's just that we are kind of relooking at some of those offers because we feel financially if it's not viable, we will not proceed with some of those, but we will definitely -- we are still exploring, and we will definitely update you when there is an update, when there's a concrete date on when we can start our next project. We are in discussions with various state governments, and we will definitely announce something soon. But we are in -- right now, we are busy with Chennai. So once that is done, I think by that time, we'll be able to announce something.

[Technical Difficulty] QIP in December last year. And the management, you have guided that we'll use a mix of debt equity and internal accruals for future parks. And we'll roughly have 2 -- we'll have roughly have 2 parks every 3 years or so. I'm just back of hand calculation -- back of hand calculation of park like Bhubaneshwar.

Yes, it might get slightly delayed because these are long gestation projects. We may not be able to do 2 parks all the time. Like I said, theoretically, we can do 2 parks simultaneously. That's what I said. But it depends on the land acquisition and government approval. So those things can get delayed. Like, for example, in Bhubaneshwar, everything happened within a few months, whereas in Chennai, it has taken years. So it just depends on every state. We are a business which is dependent on a lot of government approvals. So some of those will factor into some of the time line.

Next question is from Mr. Angad from Shameeksha Capital.

Sir, my first question is regarding -- I just want to understand from a strategic perspective that if I look at the footfalls till FY '24, where we reported the maximum footfalls. Last year, we saw a degrowth and now we are again catching up to FY '24 numbers. But on the other hand, we are seeing that ARPU has seen a drastic growth since the last 2 years, primarily driven by both ATB, but primarily driven by the non-ticket prices growth. Just want to understand, is our strategy going forward to premiumize our mature park offerings as there seems to be limited scope for footfall growth? Is my understanding right? And use the new parks to drive the footfall growth and keep the ticket prices low as we can see in the Bhubaneswar Park ticket prices have seen like a degrowth.

See, every geography will have its own differentiated pricing. Bhubaneswar is a new park and it's in a Tier 2 city. So obviously, the pricing will be different. But our long-term objective is to premiumize the offering. I will give the mic to Dheeran to explain further.

Yes. So I think we understand that there is an opportunity in terms of adding a lot more value to the overall experience of a park in terms of premiumizing F&B, in terms of giving many other products that we've been getting feedback from customers that will enhance their experience. And all of this is an outcome of the ARPU growth. And we feel that if we continue to build on this experience, we will be able to continuously build our ARPU and simultaneously also look at opportunities, especially in the leaner season, which is quarter 2, how we can turn around to bring in some footfall as we have capacity in the past. And that -- and some of our strategies that we've implemented in quarter 2 has paid some leads. So it's good learning, and we hope to continue to improvise on this.

Okay. My second question is to, Saji sir. With our Chennai Park opening next month, how do you see the upfront cost from the Chennai Park in tackling in our P&L from employee, advertising, et cetera, and other costs?

Mostly the cost structure will be similar to the other parks what we're already having. Only thing is that for the launch purpose, we may be spending some additional amount for creating initial buzz and all. But otherwise, it should be almost equal to the structuring will be same.

Got it. And one clarification. Are we breake-ven on -- at the Bhubaneshwar park on EBITDA and PAT level?

The EBITDA level is mostly we haven't matched the revenue. It's only INR 11 lakhs or something is there in the EBITDA. Otherwise, it's almost match.

[Operator Instructions] Next question is from Prolin Nandu from Edelweiss Public Alternatives.

Slightly similar question on the footfall, right? Now if we -- if I look at your numbers park-to-park basis, right, maybe half yearly or even quarterly, we haven't surpassed...

Can't hear you clearly.

No, I was saying -- my question is around footfall. And if I look at past 4 years trends, right, for each and every park, our footfalls are trending a bit lower, right? So how should one think about this '23, '24 -- FY '23 as well as FY '24 as a year, right? Should we just think about it as an anomaly and there was a pent-up demand of post-COVID and...

That is how it is only. As I explained this before in earlier calls also, '23 was post-COVID, we had that extremely high footfall. Then I think it kind of stabilized for the next couple of years. And now again, we are seeing some growth. So I mean this is expected. This is how we work.

So then it's -- I mean, so what I'm trying to understand is that probably expecting that we will surpass that number anytime soon is probably not the right metric, right? We should probably think about the reset, which happens [indiscernible]?

It keep improving. Every year, I think you can expect some improvement. I mean, it usually doesn't happen in a clockwork fashion. It will be -- you will see spikes and then you will see drop. So sometimes you'll see when we launch a new couple of rides or do some marketing, you'll see a huge spike and then sometimes maybe a couple of other -- next year, you might not see that spike. You might see a slight dip. So it's just the way the business works. So if you look at it over a long period of time, you'll see growth, yes.

Okay. Because see, FY '25 alone was also a slightly muted year for us, right? There were lots of disruption related to election, related to weather condition. So on top of that, we have added some -- we have done some digital initiative as well, added some new rides as well. And despite that, if we look at the footfall for half yearly basis, it's still negative. So I'm just trying to understand whether our understanding, what...

We will keep improving over a period of time. Now exactly how it will happen, it remain -- I mean, we can't predict the future, right? But definitely, over a period of time, it will improve, and that's what we are seeing even for this quarter.

Okay. Just one last point before I probably move to other topics. See, we had an equation in mind, right, that part of the growth will come from footfalls and part of it will come from ARPU. What we are at least witnessing in last couple of years is that there is a stronger growth on ARPU versus the footfall, right? But does that -- is it just again something which is a temporary kind of a thing and we should again revert back to our expectation of how the growth should come from contribution from volume [ indiscernible ]

It will keep changing. So we are focusing more on ARPU growth now because if footfalls are being impacted, then obviously, our efforts will be to maximize ARPU. Whereas if footfalls are coming in more, then obviously sometimes ARPU may get affected. So it's a cyclical thing. Sometimes you'll see both. For example, in Q3, you'll see ARPU may come down a little bit and footfalls will grow, whereas in -- for example, in Q1, where our parks are already running full, the chance of getting footfall growth there is may be limited because there parks are already full as the finite capacity. So then the ARPU growth makes more sense. So it will be a mix and match of both.

Understood. One last point on this expansion plan beyond Chennai, right? So now when last couple of quarters back when we had raised money, we thought that we are in advanced discussion with some of these governments, right? So I mean, where is the delay, right? I mean what is the...

There will be some delays because it's a government thing. So they usually take their own free time sometimes to do where land is involved. So it's easy -- it's not easy for us to conclude that land deal quickly. So sometimes there will be delays. Sometimes we also will reassess some of the locations and then we want to move to a different location. So all that -- all those considerations, I mean, will happen. We will definitely keep you updated where next location will be. We are definitely looking at Tier 1 and Tier 2 cities as well. But we will give you a concrete -- whenever there is some signing or something concrete happens, we'll keep you updated.

Next question is from Navin from ithoughtpms.

Congratulations on a good set of numbers. So I just wanted to ask a couple of quick questions. So the first one is, I completely understand that the approval for new parks or like announcements for new parks that might be a little lumpy. But I remember a few quarters back, like you set a vision to be like India as a 10, 12 park country. Is there any change in that number? Or you have a different number [ indiscernible ].

No, no. Our strategy is to go to all the Tier 1 and some of the Tier 2 cities. So I don't see any change in our strategy. Some delays here and there can happen. Like I said, these are long gestation projects. It's not easy to find land. We need large tracks of land. So it's difficult to find and expensive. So we need to find that right balance. So whenever we will definitely be -- we are constantly on the lookout for new projects. So we'll keep you updated when there is some movement on that front. It will happen soon, but we will keep you updated.

Got it. The second one would be, so I read about the fact that we have started doing this entire QR journey from beginning to end for food as well as the ticketing. So that started this [Technical Difficulty] or I mean, the launch of that.

Yes, that is a part of our digital transformation journey. So we have just launched one part of it, but there's a lot more to be done. I think the whole exercise will take us a couple of years. We are expecting to see a revenue upside because of this as well and a better customer experience and also more control for us to -- in terms of handling quicker turnaround and also giving more options to guests in terms of self-booking or reducing queue times, all these kind of things.

Next question is from Nilesh Doshi from Tree Asset Management.

So see, I understand that the amusement park business is largely depend upon the footfall, the number of the visitors that visits the amusement park. In quarter 2, the company has reported the 12% volume growth. But if we look into the last 3 years quarter 2 data, then there is a no growth because suppose we exclude the Bhubaneswar Park then there is -- absolutely, there is a no growth in quarter 2 '24, already we have reported at 4.96 lakhs visitors. And this year, it is 4.81 lakh if we exclude the Bhubaneswar Park. So why the company is not affecting the higher number of visitors to our park visit because is the character of the amusement park business or we have...

It is a characteristic of the business and Q2 is a weaker quarter usually. So because of that, I think footfalls do fluctuate from time to time. And Q2 is unusually heavy with the rain and all that. So because of that visitor numbers -- that is why Q2 is the lowest quarter for us.

No, I'm not asking about the number for particular quarter because I'm comparing the quarter 2 with the quarter 2 of the previous year. See, I'm comparing the quarter 2 '24 data with the quarter 2 '26. The quarter 2 '24 has reported 4.96 lakhs visitor and in current year, it is 4.81 lakh. Still if we compare the Y-o-Y quarter 2 '25, there is a 12% volume growth. But if we compare with the quarter 2 '24, there is no volume growth. It is the volume degrowth.

I just told you that the '23, '24 was our post-COVID year, so there was a huge growth in footfall. Then after that 1 year, the growth has come down, now it's again growing. So that's how it works.

So for addressing the footfall we have to set up the new park somewhere in the geographically in a new destination. And this is the only way because we maintain such numbers constantly and we are not, say, in other business, there was always the same-store sales growth. Here, can we attract the more number of the repeated visitors or the higher number of the footfall because how much ARPU we can increase because it is ultimately the number of visitors will increase our business. Is there any possibility we can attract the more number of people, the same repeated customer or same repeated visitor?

Difficult to do it in Q2 because Q2 is -- we are a seasonal business. So it's very difficult to get footfall sometimes in Q2. Sometimes it's possible. That's why you're seeing like, for example, this quarter, we have done well. Whereas the same quarter last year, we didn't do well because we had extra heavy rains and we had floods and all that. So all those things will affect our footfall. So that's how it works.

[Operator Instructions] Next question is from Vivek Kumar from Bestpals Research and Advisory.

My first question is regarding what kind of parks do you prefer? Is it going to be Chennai kind of park or is it going to be Bhubaneshwar it going to be asset-light? I'm talking about the size, not about the -- just about the way you go ahead about doing it. So the new parks, what do you prefer? Where do you think...

We want to do large format parks. We will only do large format parks mostly. That's what we -- that's what our brand stands for. And all our parks are pretty big, whether it's Bhubaneswar or Chennai or Kochin or Bangalore, they're all kind of similar in size. All can fill large number of visitors. So that's our strategy.

Second question is, if I go to 3 to 4 years, can we assume other 2 parks apart from Chennai or you don't want to even give 2 parks [ indiscernible ]

Yes, yes. No, no, you want 2 more. We'll definitely be adding a couple more locations at least, maybe even more than that. We will keep you update.

Sir, just a follow-up question on this only, nothing new. So what are -- like you are very sure because you -- you're very sure about the locations and because there are not many locations in India where you can put up large parks, maybe another 5, 6 cities. So do we have the urgency or you don't think anybody is going to put up, we our time? I don't know how to -- am I making sense?

This is not -- this is a -- like I said, these are large gestation projects, not only in India, all over the world. I mean they take years to build parks. In fact, Wonderla builds parks the fastest among any amusement park operator, I think anywhere in the world. We are able to build a park in 2 years, 3 years, so which is very, very small. So yes, so we'll definitely look at larger cities first, like Tier 1 like Bombay, Delhi, Ahmedabad, these are the cities that we'll be looking at. We will also be looking at Tier 2 cities, but we will -- that depends on the government if they are giving us a sweet deal for the land or like how we did in Bhubaneswar. So it depends on the final deal that we are able to do with the government.

So my question was, sir, there are only maximum another 5 cities, at least if I take a 10-year horizon, I don't know, another 5, 6 cities...

No, there are at least 15 cities where we can do this because any city which has more than 2 million population, we can do it.

I'm talking about large park. You can put a large park in another 15 locations?

Maybe 5 to -- large cities, Tier 1 cities, maybe we will have 4, 5 more cities and then Tier 2 cities, we'll have another 10 [ indiscernible ].

That was my question, sir. Is there any urgency so that we can go ahead and put up there faster than -- or yes, we don't bother because we can do it at our own pace because of lack of other players. What do you say about it?

There are other -- this is not a very easy business to master. So I don't think it's not something that -- I don't think we need to be in too much of a hurry because it's also a very capital-intensive business. We will do it whenever we feel that there is a good opportunity for us to enter a market.

Next question is from Harsh Gupta from Ionic Wealth.

My question was, let's just think about the Chennai Park for a second. If the Chennai Park was hypothetically done on a lease land, then just I want to understand instead of INR 600 crores, how much money would we have spent? So basically, what's the rough breakdown of land versus the rides [ indiscernible ]

We would have saved maybe INR 100 crore.

Okay. So you might have saved -- even then INR 600 crores would have been like INR 400 crores, INR 500 crores at least.

Yes, yes. Because like I said, these are large gestation, large CapEx projects. So land is maybe 1/4 the cost of a total -- maybe 1/4 or 1/5 of the cost of the land -- the project.

So land is around 1/4 to 1/5 of the cost of a normal large project.

Yes. For example, in Bhubaneswar, we've not spent on the land. The land was given to us on a long lease by the government. So we didn't spend that whatever INR 50 crores to INR 100.

Bhubaneswar, we spent about INR 6 crores on the land, right, for the 80-year, 90-year lease.

Yes, that's it. This is very less.

So therefore -- which basically means that the Bhubaneswar size is roughly half of Chennai on the ex-land basis, roughly half.

Yes. Yes, a little less than half, yes, if you look at the, this thing. Yes.

Next question is from Vinay from Hathway Investments.

I have just 2 questions. One is on -- when I see Bhubaneswar, you seem to have dropped the average ticket price. And with the same footfalls, you have got a higher non-ticket price. Was that a conscious call to take to attract more visitors?

Yes, yes. Bhubaneswar is a new park and it's a market where we have to create the category because amusement parks don't exist there before Wonderla went there. So I think there is -- we have to give weaker deals in terms of ticket pricing. But what we are seeing there is people are willing to spend more on food and merchandise. So we are getting healthy non-ticket revenue from there. So that's what we're seeing.

But one ticket revenues across your parks are more or less constant in around 500 to 550 bracket. I mean 450 to 500 bracket. So it doesn't matter whether it is a Tier 1 or a Tier 2 city, is it, for non-ticket revenue?

Yes. I think people are willing to spend. So we are a special day outing. We are not -- I think we are not a high frequency visit. So people do tend to spend more when they come to an amusement park. At least that is our experience.