Talwalkars Better Value Fitness (TALWAL) - ICICI Direct

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Exhibit 2: Consolidated revenue and QoQ growth trend6056.155.8120Net sales for Q4FY13 grew 35.6% YoY driven by 7-8% risein fees, increase in number of gyms and launch of newservices(| crore)5040302041.228.528.4100806040200(%)10-20-400-60Q4FY12 Q1FY13 Q2FY13 Q3FY13 Q4FY13RevenueQoQ GrowthSource: Company, ICICIdirect.com ResearchExhibit 3: EBITDA & PAT margin trend60The EBITDA margin declined 70 bps YoY due to a sharprise in employee and marketing cost owing to newservice offerings(%)50403050.632.345.036.349.92023.221.721.7109.210.40Q4FY12 Q1FY13 Q2FY13 Q3FY13 Q4FY13EBITDA MarginPAT MarginSource: Company, ICICIdirect.com ResearchExhibit 4: Number of health clubsExhibit 5: Number of health clubs by ownership250200150175205Licensed/Franchised9%HiFi10%Nos1005094128130130137144Subsidiaries10%Owned71%0FY11FY12Q1FY13Q2FY13Q3FY13Q4FY13FY14EFY15ESource: Company, ICICIdirect.com ResearchSource: Company, ICICIdirect.com ResearchICICI Securities Ltd | Retail Equity Research Page 2
Exhibit 6: Members growth trendTotal gyms for the quarter increased marginally QoQ.However, on a YoY basis, it grew over 10% to 1,33,000members(In '000)200180160140120100806040200185162125 126 130 132 1338359.0FY10 FY11 FY12 Q1FY13 Q2FY13 Q3FY13 Q4FY13 FY14E FY15ESource: Company, ICICIdirect.com ResearchRecent initiatives taken by companyIn the current quarter, the company has widened its presence in differentsegments of fitness like weight loss (Reduce), alternate form of fitness(massage & Zumba). These initiatives are earnings accretive for thebusiness due to its low dependence on capex. Some of these activitiescan also be developed as standalone services outside the fitness centre.TBVF has increased the Zumba centres to 29 from 15 since the lastquarter result. The company currently has over 150 certified Zumbatrainers. Currently, large corporates, including MNCs, are availing Zumbaprogramme and NuForm. The company is actively looking at otheravenues like schools, colleges, home based services, etc.TBVF has also increased the number of Reduce centres to 17 from five inthe last quarter. The member base has widened to over 500 members.Reduce is also offered as “Home based Reduce”, primarily catering to HNIand corporates at their door step. This requires minimal capex. Hence, ithas an incremental positive impact on the fitness centre’s profitability.These new initiatives have helped the company to leverage on its currentasset and enhance the member base without incurring any major capex.Pricing for new initiatives is at a significant premium that we believewould help the company in improve its margins, going forward.ICICI Securities Ltd | Retail Equity Research Page 3
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Talwalkars Better Value Fitness (TALWAL) - ICICI Direct

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