Buy Talwalkars; target of Rs 442: KRChoksey

KRChoksey's research report on Talwalkars
Talwalkars has pioneered the concept of gyms in India and Started in 1932 by Late Mr Vishnu Talwalkar, with first gym in Mumbai. Talwalkars listed itself in May 2010 on BSE. With promoter’s experience over the period of time Talwalkars have been market leader in Indian fitness Industry with market share of 41% of the Indian organized market and 8-9% of the overall market. The company has increased its footprints and become the largest chain in south Asia with over 211 centres presence across 86 cities and Towns. The major brands of the company are Talwalkars, premium gyms, Power World, HiFi and value added services like Personal Training, Nuform, Reduce, Transform, Group-X, Zorba, Spa & Massage.

Outlook

We remain positive on the growth of the company, assuming that more number of people look forward to get fit and enroll with TBVFL brand and also utilize it value added service. We are valuing the company by. At CMP of INR 320, we recommend “BUY” rating on the stock and value the company by taking an average of both the valuation PE (11x multiple) and by EV/EBIDTA (5x multiple) basis and arrive at the target price of INR 442, with potential upside of 38.2%

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