Buy Talwalkars; target of Rs 310:Khambatta Securities

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26 Aug, 2025 12:21

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Khambatta Securities's research report on TalwalkarsIndia’s fitness industry has grown at a CAGR of 22% over the last 3 years, and is expected to continue the growth momentum led by increasing health and fitness awareness, rapid urbanisation, increasing discretionary spending & young population. Talwalkars Better Value Fitness Ltd (TBVF) one of the largest fitness chains in India offers a diverse suite of services in fitness under the brand “Talwalkars” has been a major beneficiary of this growth. TBVF through its network of 156 chains (63 to 156 in 5 years) has recorded phenomenal growth of 24.8% CAGR in its top-line in last 5 years led by aggressive expansion and acquisition. Going forwards, we expect TBVF to continue the current run-rate and register revenue of Rs. 3,413 mn in FY17 as it further tries to consolidate its position in the fitness market. We remain positive over the outlook of India’s fitness industry as fitness industry is highly under penetrated in India with mere 0.4% (taken for top seven cities) membership compared to the US average of 3.7%. The industry, as a whole, is expected to benefit from the rising proportion of the age group between 20 and 44 in India, which is expected to be ~40% of India’s total population by the end of 2016. We believe TBVF’s right mixture of serving one stop shop for fitness will lead to higher foot falls and customers. TBVF’s focus on in-organic model and opening up of leisure centres & premium club will enhance TBVF’s growth & margins. At CMP of Rs 250, we rate TBVF common stock a strong buy with a target price of Rs 310 ~ 24% upside. For valuation purpose we have applied P/E(x) methodology, from P/E(x) we arrive at a target price of Rs 310 (based on 13x FY17E EPS of 23.8), hence we recommend “Strong Buy”. For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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