Talwalkars eyes 35% sales growth in FY13

Anant Gawande, CFO of Talwalkars said the company's performance has been encouraging in the first quarter of FY13. Looking at the good responses to new initiatives, Talwalkars is hoping to maintain 35% sales growth in the current fiscal.

The growing number of members in small towns and cities has given a boost to Talwalkars' business and it is not seeing any slowdown in Tier II and Tier III cities, informed Gawande. Going forward, the fitness chain is planning to open 50 zumba outlets by 2013. Here is the edited transcript of the interview on CNBC-TV18. Q: Numbers look good but this is not your biggest quarter. Do you think the kind of trends you are seeing in the market, Q2 which is a much bigger quarter will be okay?
A: Yes numbers have been quite good. 40% bottom-line growth on consolidated basis is in line with what we were expecting, it is slightly ahead of our expectations. We have just opened our August scheme about 8 days back.
Surprisingly, wherever we have innovated, which is across gyms and product packages including gym with aerobics, fitness, diet or weight loss program, we have been receiving far better responses than what we were at the same time last year. We have opened an August scheme which is in the current quarter, ahead of schedule, ahead of our expectations and June quarter has only assisted us in getting a slightly higher number of members in our kitty.
_PAGEBREAK_ Q: There has been some sluggishness reported from other consumer categories in this current quarter. Are you seeing any kind of weakness in your market?
A: I can only give you the experience of our last two gyms and renewals in our existing gyms. We opened two gyms in last 1-1.5 months. Ichalkaranji which is a town near Kolhapur, we have registered about 350 members within one and half months and I think is a very good number. In Ajmer too, which is a small town in Rajasthan we have got 350 new members in about two months.
In the mid-sized towns we are still completely unaffected. In the top 8 towns of India, we believe people are taking decisions based on innovative products which are offered to them. Luckily for us, over the last 1 year we have been anticipating changes in people's buying decision and have provided them with Zumba, Nuform diet programs etc. Once they combine it with their package, they are happier taking a combined package because that discounts their thinking far more. Q: What progress have you made on some kind of brand extensions that you were trying with spas, diet foods etc?
A: We launched Zumba which is not our brand but, among the biggest aerobics brands in the world. In the last one month, 11 Zumbas were launched. It means we are slightly ahead in terms of how many Zumbas we should have done. I think we should be able to open about 50 Zumba outlets by March 2013. We were earlier guiding about 25-30 Zumbas but, I think we will probably do about 45-50 Zumbas.
As far as diet food goes, we have launched a diet food program. Essentially, you get all the meals of the day and you can reduce a fair amount of weight just by consuming that. This has been launched in Bangalore commercially. It has got a very robust response in Bangalore. We should open it on a pan India basis over the next 2-4 quarters across India, in all the locations.
We have also come out with BMR machines called Nuform. These are successfully opened in 6 studios of Mumbai. Q: You remain on track for the 30-35% sales growth that you have guided for this year?
A: Absolutely. As I said, 40% was slightly ahead of our expectations. We have started the current quarter, which is a critical quarter on a very good note. We are in line for what we had anticipated earlier.