Talwalkars Better Value Fitness (Q2 FY14)

India Infoline News Service | Mumbai |

Talwalkars Better Value Fitness (TBVF) reported ~24% yoy rise in net revenues driven by increase in consolidated gym base to 147 from 129 in Q2 FY13 of which 103 are owned gyms

CMP Rs139, Target Rs190, Upside 36.7%

  • Talwalkars Better Value Fitness (TBVF) reported ~24% yoy rise in net revenues driven by increase in consolidated gym base to 147 from 129 in Q2 FY13 of which 103 are owned gyms

  • EBIDTA margin remained largely flat as higher admin expenses (probably due to an enlarged gym base yoy, advt expenses to support August launch etc) were offset by lower staff costs; company indicated that at same store level, revenue generation at August scheme was higher yoy with marginal rise in ad expenses

  • PAT increased ~21% yoy as impact of lower interest cost (due to treasury income and August scheme cash flows) was countered by accelerated depreciation on key assets

  • We expect continued traction from core gym business while newly launched services like Zumba, NuForm and Reduce would drive incremental EBIDTA; retain BUY with unchanged 9-12mth target Rs190. 

Results table (consolidated)
(Rs m)
Q2 FY14
Q2 FY13
% yoy
Revenues
624
502
24.3
Staff
(130)
(109)
19.3
Admin & other expenses
(181)
(139)
30.0
Operating profit
312
253
23.2
OPM (%)
50.1
50.5
(43) bps
Depreciation
(77)
(38)
106.1
Interest
(22)
(31)
(30.6)
PBT
213
185
15.4
Tax
(52)
(56)
(6.8)
Effective tax rate (%)
24.4
30.2
(582) bps
Minority int
(14)
(7)
87.8
Reported PAT
148
122
21.3
Source: Company, India Infoline Research

Financial summary
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BSE 300.40 [4.35] ([1.43]%)
NSE 300.80 [1.90] ([0.63]%)

***Note: This is a NSE Chart

 

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Y/e 31 Mar (Rs m)
FY12
FY13
FY14E
FY15E
Revenues
1,194
1,509
1,864
2,240
yoy growth (%)
28.6
26.4
23.6
20.1
Operating profit
543
726
899
1,080
OPM (%)
45.5
48.1
48.2
48.2
Reported PAT
221
300
355
462
yoy growth (%)
37.5
36.2
18.0
30.2
EPS (Rs)
9.1
12.5
14.7
19.1
P/E (x)
15.2
11.2
9.5
7.3
P/BV (x)
2.3
1.7
1.5
1.3