Talwalkars Better Value Fitness (TALWAL) - ICICI Direct

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Financial summaryProfit and loss statement(| Crore)(Year-end March) FY12 FY13 FY14E FY15ETotal operating Income 130.5 168.8 210.5 265.2Growth (%) 27.6 29.3 24.7 26.0Employee Expenses 24.8 31.2 38.9 49.0Marketing Expenses 4.1 47.0 53.5 66.1Administrative Expenses 36.2 0.0 0.0 0.0Rent 0.0 0.0 0.0 0.0Other Exp 11 18 25 32Total Operating Expenditure 76.2 96.1 117.6 146.9EBITDA 54.3 72.7 92.9 118.3Growth (%) 35.5 33.9 27.7 27.4Depreciation 11.8 14.6 18.3 20.9Interest 9.1 10.8 11.4 11.7Other Income 1.6 1.3 1.6 1.8PBT 34.9 48.6 64.7 87.5Others 2.5 2.7 1.9 2.5Total Tax 10.4 15.8 21.3 28.9PAT 22.0 30.1 41.5 56.1Growth (%) 37.5 36.4 37.9 35.4EPS (|) 9.1 11.5 15.8 21.4Source: Company, ICICIdirect.com ResearchBalance sheet(| Crore)(Year-end March) FY12 FY13 FY14E FY15ELiabilitiesEquity Capital 24.12 26.2 26.2 26.2Reserve and Surplus 120.0 182.1 223.6 279.7Total Shareholders funds 144.1 208.3 249.7 305.9Total Debt 141.2 156.6 163.6 167.0Deferred Tax Liability 14.3 19.2 20.5 21.7Minority Interest / Others 5.0 8.1 9.9 12.4Total Liabilities 304.8 392.2 443.9 507.0AssetsGross Block 261.5 377.4 422.4 487.4Less: Acc Depreciation 37.0 51.6 70.0 90.8Net Block 224.5 325.8 352.5 396.6Capital WIP 27.4 27.4 32.4 32.4Total Fixed Assets 251.9 353.2 384.9 429.0Intangibles 4.6 4.6 4.6 4.6Investments 18.4 22.7 26.7 30.7Long term Loans and Adv 0.0 0.0 0.0 0.0Debtors 20.1 17.8 26.0 32.7Loans and Advances 22.6 29.3 35.4 44.1Cash 19.8 22.9 29.1 35.2Total Current Assets 62.5 69.9 90.5 112.0Creditors 22.6 42.8 46.1 50.9Provisions 10.1 15.5 16.7 18.4Other current liabilities 0.0 0.0 0.0 0.0Total Current Liabilities 32.7 58.3 62.8 69.3Net Current Assets 29.9 11.7 27.6 42.7Application of Funds 304.8 392.3 443.9 507.1Source: Company, ICICIdirect.com ResearchCash flow statement(| Crore)(Year-end March) FY12 FY13 FY14E FY15EProfit after Tax 22.0 30.1 41.5 56.1Add: Depreciation 11.8 14.6 18.3 20.9(Inc)/dec in Current Assets 1.9 -4.4 -14.3 -15.5Inc/(dec) in CL and Provisions 4.1 25.5 4.6 6.4CF from operating activities 39.8 65.9 50.1 68.0(Inc)/dec in Investments -9.8 -4.3 -4.0 -4.0(Inc)/dec in Fixed Assets -62.4 -116.0 -50.0 -65.0Others 6.2 8.0 3.2 3.7CF from investing activities -65.9 -112.3 -50.8 -65.3Issue/(Buy back) of Equity 0.0 2.1 0.0 0.0Inc/(dec) in loan funds 20.1 15.3 7.0 3.4Dividend paid & dividend tax 0.0 0.0 0.0 0.0Inc/(dec) in Sec. premium 0.0 27.2 0.0 0.0Others -4.8 4.8 0.0 0.0CF from financing activities 15.3 49.4 7.0 3.4Net Cash flow -10.8 3.0 6.2 6.1Opening Cash 30.6 19.8 22.9 29.1Closing Cash 19.8 22.9 29.1 35.2Source: Company, ICICIdirect.com ResearchKey ratios(Year-end March) FY12 FY13 FY14E FY15EPer share data (|)EPS 9.1 11.5 15.8 21.4Cash EPS 14.0 17.1 22.8 29.4BV 59.8 79.6 95.4 116.8DPS 0.5 0.0 0.0 0.0Cash Per Share 9.5 14.0 17.1 22.8Operating Ratios (%)EBITDA Margin 41.6 43.0 44.1 44.6PBT / Total Operating income 16.9 17.8 19.7 21.2Asset Turnover 0.5 0.5 0.5 0.6Debtor days 56.2 38.4 45.0 45.0Creditor days 63.2 92.5 80.0 70.0Return Ratios (%)RoE 15.3 14.4 16.6 18.4RoCE 14.6 15.5 17.6 20.1RoIC 10.5 10.6 12.0 13.8Valuation Ratios (x)P/E 17.3 13.8 10.0 7.4EV / EBITDA 9.8 7.5 5.9 4.6EV / Net Sales 4.1 3.2 2.6 2.1Market Cap / Sales 3.2 2.5 2.0 1.6Price to Book Value 2.6 2.0 1.7 1.4Solvency RatiosDebt/EBITDA 2.6 2.2 1.8 1.4Debt / Equity 1.0 0.8 0.7 0.5Current Ratio 1.9 1.2 1.4 1.6Quick Ratio 1.3 0.8 1.0 1.1Source: Company, ICICIdirect.com ResearchICICI Securities Ltd | Retail Equity Research Page 4
Company DescriptionTalwalkars Better Value Fitness (TBVF) is a fitness chain offering a suite ofsolutions, including gyms, spa therapy, nutrition counselling,physiotherapy guidance, aerobic activity classes and yoga sessions underthe brand Talwalkars. Its other products and services include spinningstudio, pilates and weight loss regimen. The company has an 8,000 sq ftresidential training academy at Thane. The training academy offers atraining programme of four to six weeks for its staff joining at the newcentres. As of December 2012, it operated 137 health dubs in 73 citiesand has more than 132,000 members. Its health clubs and training centresare located in Andhra Pradesh, Gujarat, Karnataka, Kerala, Maharashtra,Madhya Pradesh, Punjab, Rajasthan, Tamil Nadu, Uttar Pradesh and WestBengal. In April 2012, the company, through its subsidiary, opened ahealth club in Gandhinagar.Exhibit 7: Recommendation History250200150100500May-12Jun-12Aug-12Sep-12Nov-12Dec-12Feb-13Mar-13May-13PriceTarget PriceSource: ICICIdirect.com ResearchExhibit 8: Recent ReleasesDate Event CMP Target Price Rating13-Feb-12 Initiating coverage 157 190 BUY24-May-12 Q4F12 Result update 163 190 BUY14-Aug-12 Q1F13 Result update 156 190 BUY19-Oct-12 Q2F13 Result update 195 219 BUY11-Feb-13 Q3FY13 Result update 168 219 BUYSource: ICICIdirect.com ResearchExhibit 9: AssumptionsYear FY12 FY13 FY14E FY15ENew Gym additions 20 13 29 23Members per Gym 1011 1083 1080 1000Revenue per member (|) 13813 14227 14938 15835Average revenue per gym (| cr) 1.3 1.5 1.2 1.3Source: ICICIdirect.com ResearchICICI Securities Ltd | Retail Equity Research Page 5
Page 1 and 2: Result UpdateRating matrixRating :
Page 3: Exhibit 6: Members growth trendTota

Talwalkars Better Value Fitness (TALWAL) - ICICI Direct

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