Talwalkars Better Value Fitness Ltd. share price target

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EBITDA margin declined 67 bps YoY to 59.3% (vs. I-direct estimate of 58.0%) in Q4FY16 due to increase in service tax & employee cost For FY16, revenues increased 13.3% YoY to | 286.2 crore. EBITDA...

Background: TBVF is one of the India's largest fitness chain and holds ~10% market share. TBVF has over 163 health clubs and gyms across 83 cities and towns of India and Sri Lanka with members base of over 166,000. They have 96 owned gyms, 27 gyms under subsidiary, 17 Franchisee gyms, 20 HI-FI format gyms and 3 Zorba. Geographic distribution of gyms: West (45%), North (25%), South (25%) and East (5%). Urban, semi-urban mix's of gym: Tier I (36%), Tier II (39%) and Tier III (25%)....

Background: TBVF is one of the India's largest fitness chain and holds ~10% market share. TBVF has over 156 health clubs and gyms across 82 cities and towns of India and Sri Lanka with members base of over 166,000. They have 96 owned gyms, 14 gyms under subsidiary, 17 Franchisee gyms, 19 HI-FI format gyms and 10 PWG. Geographic distribution of gyms: West (45%), North (25%), South (25%) and East (5%). Urban, semi-urban mix's of gym: Tier I (36%), Tier II (39%) and Tier III (25%)....

Company has indicated that the Talwalkars Leisure club will be operational before 1QFY17. The Company has opened its second premium gym in Churchgate, South Mumbai. The first premium gym was opened in Banjara Hills, Hyderabad on 26 th Jan 2015 and the base fee 30-33,000. Company has reported 80% of its existing clients of Banjara Hills have shifted to this premium gym....

Building a healthy market leadership position: Talwalkars is maintaining itsmarket leadership in the organized sector with almost 12.3% of the market share. The organized sector constitutes almost 28% of the total market where as the unorganized sector constitutes 72% which implies a huge potential for growth. The company is offering a wide range of products and services such as Gym, alternative therapies such as Nu form, TranZform, Zumba (dance fitness program) and Nutrition program Reduce.

In 4QFY15, Revenues up 16.6% YoY (+62.7% QoQ) at INR 768mn. Increase in revenue on account of higher share of value added services per gym. Revenue per gym increased by 15.8% YoY to INR 5.12mn. The same store sales (SSS) growth stood at 9-10% YoY. Revenue from value added...

In 3QFY15, Revenues up 29% YoY (-43.6% QoQ) at INR 472mn. Increase in revenue on account of higher share of value added services per gym. Revenue per gym increased by 28.1% YoY to INR 3.15mn. The same store sales (SSS) growth stood at 10.2% YoY and member retention rate stood...

325bps YoY to 48.15% due to cost optimization. Employee cost was down 162bps YoY and administrative cost was down 164bps YoY. Interest expense Increased by 40bps YoY to 3.5% of sales. On a sequential basis, depreciation cost grew marginally at 5.2% to INR 104mn, which is below our estimate; however, we are positive on the management's intent to accelerate depreciation rate, which will reflect the true economic value of the asset....

0.00YoY (-45.9% QoQ). EBITDA margin went up In 1QFY15, EBITDA stood at INR 187mn, up 48.1% 802bps YoY to 41.79% due to cost optimization. Personnel cost was down 249bps YoY and administrative cost was down 551bps YoY. Interest expense increased by 52bps YoY to 8.5% of sales. Depreciation expense is getting closer to reflect...