Tal Walk Ars

7/31/2019 Tal Walk Ars

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Anil Nandyala (B11005)

Asish Ghosh (B11011)

Binayak Das (B11014)

Somaditya Baral (B11044)

Presented by


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Assumptions

Balance Sheets

Profit & loss Account

Revenue Drivers

CAPM

WACC

FCFF

AGENDA


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ASSUMPTIONSThe Red coded figures are the actual values from previous years and the projected values are in blue c

All the figures are in lakhs

Balance SheetIncrease in Gross block is projected based on increase in number of health clubs

Increase in Debt is taken as 80% of increase in gross block

Profit & Loss Account

Operating Margin is taken as 40%

Revenue Drivers

2012 income projected based on first 3 quarters

The ratio of Owned : subsidary : Franchise i.e 73: 9:18 remains constantAll HIFI Gym's are franchise woned

CAPM

Market Returns are found by taking 15 years annual returns from Sensex

Risk Free taken as 8.24%, 10 years Govt bonds coupon rate

Cost of equity is found by CAPM

Returns from HIFI Gym's was projected based on franchise fees of health clubs

FCFF

Terminal value is taken as 10%


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lour


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2008-09 2009-10

Sources Of Funds

Share Capital 196.69 1806.57

Reserves And Surplus 1859.2 2398.89

2055.89 4205.46

Deffered Tax Liability 0 482.09

Loan Funds

Secured Loans 5092.77 6285.56

Unsecured Loans 3033.39 3434.52

Total Debt 8126.16 9720.08

19.61%

Increase in Debt 1593.92

Total 10182.05 14407.63

Application Of Funds

Fixed Assets

Gross Block 11088.62 13219.23

Growth % 19.21%

Growth in Rs 2130.61

Less: Accumulated Depreciation/Amortisation 1009.72 1608.16

Depreciation as % of assets 9.11% 12.17%

Net Block 10078.9 11611.07

Capital Work In Progress 176.06 1301.87

10254.96 12912.94

Investments 409.75 494.02

Current Assets, Loans And Advances

Sundry Debtors 59.65 328.73

Cash And Bank Balances 75.94 1248.71

Loans And Advances 884.34 1087.21

1019.93 2664.65

Less: Current Liabilities And Provisions

Current Liabilites 1262.62 1182.3

Provisions 239.97 562.15

1502.59 1744.45

Net Current Assets -482.66 920.2

Working Capital Required -558.6 -328.51Working Capital as % of sales -4.86% -2.23%

Miscellaneous Expenditure 0 80.47

Additional W.C Required

Total 10182.05 14407.63


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2010-11 AVERAGE EXPECTED 2011-12 2012-13

2411.57

10066.43

12478

1048.42

10211.59

926.47

11138.06 15510.94368 19009.28768

14.59%

1417.98 4372.88368 3498.344

24664.48

18904.01 24370.1146 28743.0446

43.00%

5684.78 5466.1046 4372.93

2416.12 2766.187681 3262.547477

12.78% 11.35% 11.35%

16487.89

2742.54

19230.43

969.14

1443.74

2795.13

2224.07

6462.94

881.68

1116.35

1998.03

4464.91

1669.78 1148.856276 1470.45042319.30% 4.07% 10%

0

-520.9237245 321.5941472

24664.48


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2013-14 2014-15 2015-16

25131.3584 33177.5024 44377.5024

6122.07072 8046.144 11200

36395.633 46453.313 60453.313

7652.5884 10057.68 14000

4131.172681 5272.793513 6861.896731

1862.353311 2496.65299 3531.744172

391.9028881 634.2996787 1035.091183


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Income

Income From Operations

Other Income

% increase in profit

Expenditure

Personal Cost

Administrative and Other expenses

Selling And Marketing Cost

Service Tax Collected And Paid

Total Expendiature

Expendiature as percent of income

Profit before Interest , Deprecistion , Extraordinary Items and Taxes

Finance Cost

Interest rate for Total Debt

Profit Before Depreciation, Extraordinary Items And Taxes

Depreciation/ Amortisation

Profit Before Extraordinary Items And Taxes

Profit/ Loss on sale of asset

Compensation for loss of Business Received

Profit Before Tax

Taxation

Defferd Tax Liability / AssetTotal Tax

Income tax %

Profit After Tax

Balance Brought Forward

Profit Available for Appropriation

Appropriations

Effects on Change in AS 11

Effect on Previous Year's DTL

Proposed Dividend on Equity Shares

Tax On DividendDebenture Redemption Reserve

Balance carried To Balance Sheet


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2008-09 2009-10 2010-11 AVERAGE

5951.85 6611.55 8652.04

22.41 38.29 189.42

5974.26 6649.84 8841.46

11.31% 32.96%

1601.84 1568.32 1775.72

1717.35 1731.12 2169.96

272.45 146.69 271.95

623.58 605.82 786.31

4215.22 4051.95 5003.94

70.82% 61.29% 57.84% 63.31%

1759.04 2597.89 3837.52

799.96 808.76 735.95

9.84% 5.61% 6.61% 7.36%

959.08 1789.13 3101.57

458.29 608.9 833.36

500.79 1180.23 2268.21

270.35 -21.32 -36.44

10 0 0

781.14 1158.91 2231.77

108.1 212.31 447.2

0 152.9 261.88108.1 365.21 709.08

13.84% 31.51% 31.77% 25.71%

673.04 793.7 1522.69

852.12 1522.86 1822.44

1525.16 2316.56 3345.13

0 23.86 0

0 329.19 0

1.97 120.58 241.16

0.33 20.49 40.0322.6

1522.86 1822.44 3041.34


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EXPECTED 2011-12 2012-13 2013-14 2014-15 2015-16

11488.56276 14704.50423 18623.53311 24966.5299 35317.44172

234.4604644 300.091923 380.0721043 509.5210183 720.7641168

11723.02322 15004.59615 19003.60521 25476.05091 36038.20584

7033.813932 9002.75769 11402.16313 15285.63055 21622.9235

60%

4689.209288 6001.83846 7601.442085 10190.42037 14415.28234

1140.839977 1398.145449 1848.427725 2440.226839 3263.99411

7.36%

3548.369311 4603.693011 5753.01436 7750.193526 11151.28823

350.0676813 496.3597954 868.6252039 1141.620833 1589.103218

3198.30163 4107.333216 4884.389156 6608.572694 9562.185007

3198.30163 4107.333216 4884.389156 6608.572694 9562.185007

1012.027766 1299.669556 1545.550739 2091.128303 3025.729856

31.64%

2186.273864 2807.66366 3338.838418 4517.444391 6536.455151

3041.34 0 0 0 0

5227.613864 2807.66366 3338.838418 4517.444391 6536.455151


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Projections are based on the following data

FICCI E&Y 35% Growth rate for the next 5 years, 2009

As per current Census there are 39% of the population between the ages 20 -44

By 2016 40% of the population will be aged between 20 - 44


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2011-12 2012-13

Health Club's 126 150

Owned 73% 91.98 109.5

Joint Venture 9% 11.34 13.5

Franchise 18% 22.68 27

HIFI Gym's 10 45

2008-09 2009-10 2010-11

Gross income 5724.86 6356.26 7779.17

No of health clubs 40 52 77

Round off values

Franchise fee 129.8 641.18

No Of Franchise 6 19

Round off values

No of HIFI Gym's

Gross income

2011-12 2012-13

Gross Fees 10356.786 12566.17114

Franchise Fess 863.0655 1084.951

Franchise Fess for HIFI Gym 38.94 759.292

Input Credit 2% 229.7712551 294.0900845

Total Income 11488.56276 14704.50423

Talwalkars Health & Fitness Centres

HEALTH CL

HIFI GYM


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2013-14 2014-15 2015-16

180 225 300

131.4 164.25 219

16.2 20.25 27

32.4 40.5 54

75 150 250

2011-12 2012-13 2013-14 2014-15 2015-16

10356.786 12566.17114 15512.018 19685.301 27049.91819

97.65 116.25 139.5 174.375 232.5

98 116 140 174 234

863.0655 1084.951 1362.307875 1861.55025 2582.678125

22.68 27 32.4 40.5 54

23 27 32 41 54

10 45 75 150 250

38.94 759.292 1376.736571 2920.348 4978.496571

2013-14 2014-15 2015-16

15512.018 19685.30105 27049.91819

1362.307875 1861.55025 2582.678125

1376.736571 2920.348 4978.496571

372.4706622 499.3305979 706.3488344

18623.53311 24966.5299 35317.44172

UB

'S


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S.No No.of Health Clubs (x) Income (y) xy

1 77 7779.17 598996.09

2 98 10356.786 1014965.028

Total 175 18135.956 1613961.118

n 2

X 87.5

Y 9067.978

b 122.743619

a -1672.088667

S.No No of Franchises (x) Income (y) xy

1 19 641.18 12182.42

2 23 863.0655 19850.5065

Total 42 1504.2455 32032.9265

n 2

X 21

Y 752.12275

b 55.471375

a -412.776125

S.NO No of Franchises (x) Income (y) xy

1 10 38.94 389.4

2 45 759.292 34168.14

Total 55 798.232 34557.54

n 2X 27.5

Y 399.116

b 20.58148571

a -166.8748571

HIFI Gym's Franchises

Regression AnalysisHealth Clubs woned

Health Clubs Franchises


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x^2

5929

9604

15533

x^2

361

529

890

x^2

100

2025

2125


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Month OPEN CLOSE % (GAIN/LOSS)

May-10 138 183.75

Jun-10 182.5 179.45 -1.67%

Jul-10 180 170.8 -5.11%Aug-10 173.4 200.1 15.40%

Sep-10 202 229.25 13.49%

Oct-10 232.9 237.35 1.91%

Nov-10 237 261.4 10.30%

Dec-10 264.9 269.85 1.87%

Jan-11 272.75 225.9 -17.18%

Feb-11 181 192.35 6.27%

Mar-11 194 218.5 12.63%

Apr-11 219.1 224.05 2.26%

May-11 225.65 230.05 1.95%Jun-11 233.15 251.1 7.70%

Jul-11 252 241.3 -4.25%

Aug-11 244.2 191.95 -21.40%

Sep-11 190.15 177.15 -6.84%

Oct-11 177.15 174 -1.78%

Nov-11 172.8 138.5 -19.85%

Dec-11 143 119.05 -16.75%

Jan-12 119 140.55 18.11%

Feb-12 141.75 162.1 14.36%

0.54%

11.94%

COVARIANCE 0.53%

1.283298487Risk free return (Rf) 8.24%

Market Return (Rm) 16.33%

Return on equity (Ke) Rf + (Rm-Rf) 18.62%

covariance/variance of market

Standard Deviation

TALWALKARS

AVG Return


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Month OPEN CLOSE % (GAIN/LOSS)

May-10 17,536.86 16,944.63

Jun-10 16,942.82 17,700.90 4.47%

Jul-10 17,679.34 17,868.29 1.07%Aug-10 17,911.31 17,971.12 0.33%

Sep-10 18,027.12 20,069.12 11.33%

Oct-10 20,094.10 20,032.34 -0.31%

Nov-10 20,272.49 19,521.25 -3.71%

Dec-10 19,529.99 20,509.09 5.01%

Jan-11 20,621.61 18,327.76 -11.12%

Feb-11 18,425.18 17,823.40 -3.27%

Mar-11 17,982.28 19,445.22 8.14%

Apr-11 19,463.11 19,135.96 -1.68%

May-11 19,224.05 18,503.28 -3.75%Jun-11 18,527.12 18,845.87 1.72%

Jul-11 18,974.96 18,197.20 -4.10%

Aug-11 18,352.23 16,676.75 -9.13%

Sep-11 16,963.67 16,453.76 -3.01%

Oct-11 16,255.97 17,705.01 8.91%

Nov-11 17,540.55 16,123.46 -8.08%

Dec-11 16,555.93 15,454.92 -6.65%

Jan-12 15,534.67 17,193.55 10.68%

Feb-12 17,179.64 17,752.68 3.34%

0.01%

6.45%Standard Deviation

SENSEX

AVG Return


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Year OPEN CLOSE % (GAIN/LOSS)

1996 3,114.08 3,085.20 -0.93%

1997 3,096.65 3,658.98 18.16%

1998 3,658.34 3,055.41 -16.48%1999 3,064.95 5,005.82 63.32%

2000 5,209.54 3,972.12 -23.75%

2001 3,990.65 3,262.33 -18.25%

2002 3,262.01 3,377.28 3.53%

2003 3,383.85 5,838.96 72.55%

2004 5,872.48 6,602.69 12.43%

2005 6,626.49 9,397.93 41.82%

2006 9,422.49 13,786.91 46.32%

2007 13,827.77 20,286.99 46.71%

2008 20,325.27 9,647.31 -52.54%2009 9,720.55 17,464.81 79.67%

2010 17,473.45 20,509.09 17.37%

2011 20,621.61 15,454.92 -25.05%

15,534.67 17,503.24 12.67%

16.33%

MARKET RETURNS

AVG Return


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MPS 150

No of Shares 24115672

M Cap 3617350800

M cap Rs in Lakhs 36173.508

Year Debt Interest Kd

2009 8126.16 799.96 9.84%

2010 9720.08 808.76 8.32%

2011 11138.06 735.95 6.61%

Avg Kd 8.26%

Kd(1-t) 5.64%

Ke 18.62%

Tax rate 31.64%

Cost of Debt (Kd)

Cost of Equity (Ke)

Market Capitalization


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WACC=[(D/D+E)*Kd(1-t)]+[(E/D+E)*Ke]

WACC


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15.56%


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2012-13 2013-14 2014-15

PAT 2186.273864 2807.66366 3338.838418

Interest 1140.839977 1398.145449 1848.427725

Interest (1-Taxrate) 779.8478421 955.7350141 1263.535992

NOPLAT 2966.121706 3763.398674 4602.37441

Depriciation 350.0676813 496.3597954 868.6252039

Additional capital through debt 4372.88368 3498.344 6122.07072

CAPEX 5466.1046 4372.93 7652.5884

W.C Requirement -520.9237245 321.5941472 391.9028881

FCFF 2743.892192 3063.578322 3548.579046

Terminal Value 10%

Years 1 2 3

Discount Factor (WACC) 15.56%

Present Value of FCFF 2374.336163 2293.925529 2299.217064

Out standing Debt

Equity Value

No of Shares


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2015-16 2016-17 PERPETUITY

4517.444391 6536.455151

2440.226839 3263.99411

1668.074115 2231.179495

6185.518506 8767.634645

1141.620833 1589.103218

8046.144 11200

10057.68 14000

634.2996787 1035.091183

4681.303659 6521.646681 117198.7498

4 5 6

TOTAL

2624.626242 3163.975294 49201.00336 61957.08365

27568.71961

34388.36404

24115672

142.5975774Fair Value

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