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http://content.icicidirect.com/mailimages/ICICIdirect_TalwalkarsBetterValueFitness_Q4FY12.pdf
S t r o n g p e r f o r m a n c e b a c k e d b y e x p a n s i o n s …
Talwalkars Better Value Fitness’ (TBVF) Q4FY12 results were better than
our estimates with sales growth of 20% YoY to | 41.2 crore (I-direct
estimate: | 39 crore) and PAT growth of 45% YoY to | 9.5 crore (I-direct
estimate: | 7 crore). Topline growth can mainly be attributed to a
seasonally strong quarter for the business, incremental revenue from new
gym additions & royalty income from franchise gyms. EBITDA margin at
51% (up ~1000 bps YoY) was due to benefit of operating leverage as
employee & admin cost dipped 2% YoY each. In addition, higher royalty
income from franchise gyms also drove margins. Going forward, we
expect FY12-14E net sales CAGR of 28% on the back of 22% and 5%
growth in gyms and membership fees, respectively, on an annual basis.
ƒ Strong EBITDA growth on royalty income from franchise gyms
A seasonally strong quarter for the company supported by
incremental revenue from new gyms during the period drove the
topline upward by 20% YoY (70% QoQ) to ~| 41 crore. Operating
profit reported a sharp jump of 50% YoY (147% QoQ) due to a
decline in admin expenses & employee cost (each 2% YoY). Admin
cost during the quarter declined due to elimination of one-time cost
(software upgradation) that was incurred last year while employee
cost declined on account of reformation of incentive plans.
ƒ New initiative- Nu Form Gym Studio
During the quarter, the company launched Nu Form Gym Studios (a
Germany based technology) with a focus on weight loss. TBVF
opened six Nu Form Studios in Mumbai and Thane with
membership fees of ~2-3x of normal TBVF gyms.
V a l u a t i o n
We expect revenue and PAT CAGR of 28% and 44%, respectively, during
FY12-14E on the back of its aggressive expansion plans. We believe the
industry is still in a nascent stage of growth. Hence, we continue to
remain positive on the stock and maintain our target price of | 190 with a
BUY rating (i.e. at 10x FY14E EPS, 6x FY14E EV/EBITDA)
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
http://content.icicidirect.com/mailimages/ICICIdirect_TalwalkarsBetterValueFitness_Q4FY12.pdf
S t r o n g p e r f o r m a n c e b a c k e d b y e x p a n s i o n s …
Talwalkars Better Value Fitness’ (TBVF) Q4FY12 results were better than
our estimates with sales growth of 20% YoY to | 41.2 crore (I-direct
estimate: | 39 crore) and PAT growth of 45% YoY to | 9.5 crore (I-direct
estimate: | 7 crore). Topline growth can mainly be attributed to a
seasonally strong quarter for the business, incremental revenue from new
gym additions & royalty income from franchise gyms. EBITDA margin at
51% (up ~1000 bps YoY) was due to benefit of operating leverage as
employee & admin cost dipped 2% YoY each. In addition, higher royalty
income from franchise gyms also drove margins. Going forward, we
expect FY12-14E net sales CAGR of 28% on the back of 22% and 5%
growth in gyms and membership fees, respectively, on an annual basis.
ƒ Strong EBITDA growth on royalty income from franchise gyms
A seasonally strong quarter for the company supported by
incremental revenue from new gyms during the period drove the
topline upward by 20% YoY (70% QoQ) to ~| 41 crore. Operating
profit reported a sharp jump of 50% YoY (147% QoQ) due to a
decline in admin expenses & employee cost (each 2% YoY). Admin
cost during the quarter declined due to elimination of one-time cost
(software upgradation) that was incurred last year while employee
cost declined on account of reformation of incentive plans.
ƒ New initiative- Nu Form Gym Studio
During the quarter, the company launched Nu Form Gym Studios (a
Germany based technology) with a focus on weight loss. TBVF
opened six Nu Form Studios in Mumbai and Thane with
membership fees of ~2-3x of normal TBVF gyms.
V a l u a t i o n
We expect revenue and PAT CAGR of 28% and 44%, respectively, during
FY12-14E on the back of its aggressive expansion plans. We believe the
industry is still in a nascent stage of growth. Hence, we continue to
remain positive on the stock and maintain our target price of | 190 with a
BUY rating (i.e. at 10x FY14E EPS, 6x FY14E EV/EBITDA)
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