Imagicaaworld growth outlook rests on new parks and scalable Hello Park rollout

Investment View and Revised Estimates

Prabhudas Lilladher retained its BUY recommendation on Imagicaaworld Entertainment in its August 11, 2026 Q1 FY27 result update. The broker reduced its FY27E and FY28E EBITDA estimates by around 3 per cent, as footfalls were about 5 per cent below Q1 FY25 despite the addition of Indore Park. The target price was reduced to Rs 62 from Rs 64.

Q1 FY27 Operating and Financial Performance

Imagicaaworld reported Q1 FY27 revenue of Rs 1,776 million, up 19.9 per cent year on year but 2.2 per cent below Prabhudas Lilladher's estimate of Rs 1,817 million. Parks division revenue increased 22.9 per cent year on year to Rs 1,610 million, while hotel division revenue declined 2.7 per cent to Rs 166 million.

Footfalls rose 21.9 per cent year on year to 1.15 million, aided by a low base because Q1 FY26 was affected by early monsoons, prolonged summer and steady demand across parks. However, footfalls were below the broker's expectation of 1.20 million. Blended ARPU was flat year on year at Rs 1,395, while ARPU in the Mumbai-Pune catchment declined 1 per cent to Rs 1,744.

Q1 FY27 EBITDA increased 24.1 per cent year on year to Rs 901 million but was 16 per cent below the broker's estimate. EBITDA margin improved 170 basis points year on year to 50.7 per cent, versus the estimated 59.0 per cent. The miss was attributed to higher-than-expected other expenses of Rs 584 million, compared with the broker's forecast of Rs 445 million.

Reported PAT was Rs 576 million. After adjusting for a Rs 4 million fair-value gain on NCRPS, adjusted PAT was Rs 571 million, with a 32.2 per cent margin, compared with the broker's estimated PAT of Rs 609 million and margin of 33.5 per cent.

Growth Outlook and New Parks

Prabhudas Lilladher expects a 21 per cent sales CAGR over the next two years. Growth is expected to be supported by the addition of Shanku's Water Park, an operational asset, in FY27E and Sabarmati Park in FY28E.

The broker forecasts EBITDA margins of 43.5 per cent in FY27E and 45.9 per cent in FY28E as the two parks are added. A strategic collaboration with Hello Park, with letters of intent signed for indoor parks in Surat and Hyderabad, introduces Imagicaaworld to phygital family entertainment. The broker considers this model scalable, asset-light and synergistic with the outdoor parks business.

Management Expansion Plans and Operating Parameters

Management aims to expand the portfolio to 12 parks by FY30E and plans to open four to five Hello Parks annually. Management indicated the following operating parameters for the indoor parks:

• Investment of about Rs 80 million to Rs 120 million per indoor park.
• A 5 per cent royalty payable to Hello Park.
• EBITDA margin of 24 per cent to 25 per cent after rental costs.
• Typical payback period of three to four years.
• Expected average ticket price of Rs 800 to Rs 900.
• Ticketing expected to contribute 65 per cent to 70 per cent of revenue.

Management targets net debt to EBITDA of about 2.5 to 3.0 times, although leverage may temporarily rise to 3.0 to 3.5 times to fund growth. Maintenance capex is typically 6 per cent to 8 per cent of revenue, with a further 5 per cent allocated to new rides and attractions. A price increase is expected in Q3 FY27E or Q4 FY27E.

Valuation

The Rs 62 target price is based on a sum-of-the-parts valuation using 15 times FY28E EBITDA for both parks and hotels.

Key Operational Concerns

• Footfall performance was below expectations and remained about 5 per cent below Q1 FY25 despite the addition of Indore Park.
• Elevated other expenses compressed the quarterly EBITDA margin and led to an EBITDA miss versus the broker's estimate.
• Leverage may temporarily rise to 3.0 to 3.5 times net debt to EBITDA while the company funds its expansion plans.