Fw: Company Report - Talwalkars Better Value Fitness

 

Talwalkars Better Value Fitness: Best Fit – BUY CMP Rs180, Target Rs235, Upside 30.6% Talwalkars Better Value Fitness (TBVF) offers a unique opportunity to play the growing importance of fitness combined with increased penetration of organized players. TBVF itself has been on a strong growth momentum as reflected in 1) ~2x jump in owned gym base and 2) robust revenue/PAT cagr of 36%/68% over FY10-12. In addition, company has unveiled fresh initiatives like 'HiFi' gyms (for rural reach), 'NuForm Studios' (standalone high street studios aimed at upper end of consumer strata) and 'Zumba' (aerobics) which would increase penetration and raise brand awareness. We project consolidated gym base of 199 by end of March 2014 of which 13%/17% would be housed in subsidiaries/HiFi gyms. Stock currently trades at the lower end of its historic 1-yr fwd PE range; valuations are supportive at ~11x FY14 PE given an estimated 35% PAT cagr over FY12-14. We retain our BUY rating with a revised 9-mth target of Rs235 (earlier Rs190). Click here for the detailed report on the same. Warm Regards, Amar Ambani