ICICI Direct recommended hold rating on Talwalkars Better Value Fitness with a target price of Rs 327 in its research report dated February 09, 2018.
ICICI Direct's research report on Talwalkars Better Value Fitness
The fitness industry is highly under penetrated in India with mere 0.4% (taken for top seven cities) membership compared to the Asia Pacific 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 (that has increased at a CAGR of 11% in FY05-15). In addition, we believe growing disposable incomes and rising lifestyle related diseases would lead to pent-up demand for quality health and fitness services.
TBVF’s focus on improving SSS growth is expected to boost topline and margins, going forward. However, the aggressive expansion strategy of the company has led to an increase in leverage, which remains a key concern. Hence, we maintain our HOLD rating on the stock with a revised target price of Rs 327.
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