Market mid-caps are at attractive to valuation but we have to select few out of the pool. One of them after Dena Bank amd Adani Power which we recommend is Talwalkars Fitness. Why??? Looking first into some basic fundamentals. Sales Turnover has been gradual increasing from 66 crores on March 2010 to 145 crores in March 2013 (rounded off). Earning per share (EPS) for the same period has been up from 4.39 to around 10.5. Talking about Book value than its currently at Rs. 77. One safe thing about talwalkars is that it has secured loans of around 125 crores while has reserves of 176 crores. Looking at listed peers for the stock than its only COSCO India with EPS at 0.70 and Book value at 32. Indias demographic says we have most population of the age between 18-35 and i guess they are now more health conscious. Firstly, Gym is like a trending fashion amongst high school kids and College teens. Secondly, Going for a branded title is also a must for them. Both the conditions are favorable for Talwalkars.
Coming to charts. Talwalkar has given a breakout to strong resistance line with Huge volume as seen in the charts. Secondly now its taking support at new line. Stock has given a double bottom support around 109 level after listing in 2011. Currently it is resisting near to its 200 EMA at 141 but looking at indicators and volumes its a buy on Dip for long term
Our Strategy:We recommend to go Long at CMP at 137 tgts 179/320 Sl: 117 for a long term view