Talwalkars: Strengthening Performance In Q4FY13

Talwalkars Better Value Fitness (TBVF) announced its Q4FY13 numbers post market hours on May 8. The company announced robust growth across all fronts and an upward movement can be expected in its stock prices.

In Q4FY13, the revenues of TBVF were at Rs 40.73 crore as against Rs 28.36 crore in Q4FY12, making for a healthy 43.62% growth. The number of fitness centres the company operates has also gone up to 144 in Q4FY13 from 128 in the previous year.

Its performance for the quarter was equally robust on the margins front. On a year-on-year basis, its EBITDA jumped by 43.93% to Rs 22.87 crore and its net profit by 49.86% to 11.06 crore.The EBITDA margin expanded by 12 basis points to 56.15% and its net profit margin grew by 113 basis points to 27.15%.

The company’s performance for the fiscal as a whole has also shown strength. In FY13, TBVF witnessed revenue growth of 30.54% to Rs 131.69 crore, EBITDA growth of 37.23% to Rs 63.77 crore and net profit growth of 44.11% to Rs 27.67 crore. Its EBITDA margin and net profit margin expanded by 236 basis points and 198 basis points respectively.

In December 2012, TBVF raised Rs 42.37 crore via qualified institutional placement (QIP). The company said that as of March 2013, it has utilised Rs 1.87 crore of this amount towards meeting issue-related expenses.

Expansion of its fitness centres, same store growth and new service offerings like Nuform, Zumba and Reduce have been boosting the company’s revenues. At the same time, there has been improvement in its margins, which shows that TBVF has been carrying on such rapid expansion in a sustainable and profitable manner.

Considering the organic, inorganic and geographic expansion that TBVF has seen and the strategy that it has embarked upon, the outlook for the company seems favourable. Moreover, this growth being profitable makes its prospects all the more bright. We, at DSIJ, thus have a positive outlook on this counter.