TALWALKARS BETTER VALUE FITNESS LTD : FITS THE BEST AS VALUE PLAY !!!

Scrip Code: 533200 / TALWALKARS

CMP:  Rs. 118.95; Buy at Rs. 113 - 119 levels.

Short Term Target : Rs. 150.00; Medium to Long term Target: Rs. 190; STOP LOSS – Rs. 110.40; Market Cap: Rs. 314.17 Cr; 52 Week High/Low: Rs. 223.70 / Rs. 109.05;

Total Shares: 2,61,80,888 shares; Promoters : 1,43,40,923 shares –54.78 %; Total Public holding : 1,18,39,965 shares – 45.22 %; Book Value: Rs. 77.25; Face Value: Rs. 10.00; EPS: Rs. 10.69; Dividend: 15.00 % ; P/E: 11.19 times; Ind. P/E: 13.09; EV/EBITDA: 5.58

Total Debt: Rs. 139.97 Cr; Enterprise Value: Rs. 430.34 Cr.

TALWALKARS BETTER VALUE FITNESS LTD: The Company was founded in 1932 and is based in Mumbai, India.  Talwalkars Better Value Fitness Limited (TBVF) was formerly known as Talwalkars Better Value Fitness Private Limited. The company operates a fitness chain in India. The company offers a suite of services, including gyms, spas, aerobics, nutrition counseling, physiotherapy guidance, yoga classes and health counseling under the ‘Talwalkars’ brand.  The Company has an 8,000 square feet residential training academy at Thane. The training academy offers about 4 to 6 weeks of training program for its staff joining at the new centers.  It has 128 health clubs comprising 15 franchised gyms under HiFi brand and in 68 cities and had more than 75,000 members. Its health clubs/training centers are located in Andhra Pradesh, Gujarat, Karnataka, Kerala, Maharashtra, Madhya Pradesh, Punjab, Rajasthan, Tamil Nadu, Uttar Pradesh and West Bengal. In April 2012, Talwalkars through its subsidiary opened a health club in Gandhinagar. In April 2013, it opened its six new health club one each in Ahmedabad, Hyderabad, Kolhapur, Kalwa, Mira Road and Surat. As of June 2013, it operated 144 gyms in 75 cities in India. The company is globally compared with Misonoza Theatrical Corporation of Japan, Media Create Company Ltd of Japan, Social Ecology project Company Ltd of Japan and with Kaquetsuenkanko Co.,Ltd which is also based in Japan.

Investment Rationale:

The management stated that as of August 2013 it had 102 owned Talwalkar centers, 15 through subsidiaries, 7 through franchise and 6 through trade marks , it also had 15 Hifi centers. Talwalkars has alliance with Zumba fitness - a latin dance inspired fitness plan has 1.4 Cr people taking weekly Zumba classes in more than 1,40,000 location across more than 151 countries. Talwalkar in the current quarter has expanded its presence in different segments like weight loss brand name “Reduce”, alternate form of fitness Zumba and NuForm. The company has extensively increased the number of “Reduce” centres to 44 from 17 in the last quarter, increasing administrative expenses this quarter. Zumba centres have increased to 31 from 29 on a QoQ basis with over 300 certified Zumba trainers. The new initiatives with premium pricing have helped the company to leverage on its current asset and enhance its member base without incurring any major capex. Some of these activities can also be developed as standalone services outside the fitness centre. Currently, large corporates, including MNCs, are availing the Zumba programme and NuForm. The company is actively looking at other avenues like schools, colleges, home based services, etc. TBVF has also extensively increased the number of “Reduce” centres to 44 from 17 in the last quarter. “Reduce” is also offered as “Home based Reduce”, primarily catering to HNI and corporates at their door step. This is an minimal capex required model. Hence, it has an incremental positive impact on the profitability of the fitness centre. These new initiatives have helped the company to leverage on its current asset and enhance the member base without incurring any major capex. Pricing for new initiatives is at a significant premium. This would help the company to improve its margins, going forward. Talwalkars has also tied up with David Lloyd Leisure: which has over 30 years of unmatched experience in the development and operation of leisure and sports clubs. The very same insights and know-how will now be available to Talwalkars for starting and consulting for sports and leisure clubs in India. TBVF’s HiFi gyms capex requirement is about half of a full service gym and their membership rates are 60 % of those for regular gyms. The company is rolling out HiFi gyms through the franchisee route thereby eliminating funding needs for roll out. In return for gym management, TBVF will earn royalty income at the rate of 6 % of revenues for first three years and 8 % thereafter. Talwalkars would also receive a one-time royalty income and equipment supply charge to the tune of Rs.10,00,000 each. HiFi gyms offer faster roll out since each roll out usually takes 8-10 weeks compared to 14-16 weeks for typical Talwalkars gym.

Outlook and Valuation:

Talwalkars Better Fitness Value ltd is a play on the growing healthcare market in India. It has a strong brand name and is now capitalizing, with rapid expansion. Gym is a highly localized business in the sense it needs to be easily accessible to local population at an affordable price (at least from a mass market perspective). Talwalkars has managed to break away from its peers and now leads the scale pack with 145 gyms on consolidated basis. There is a vast opportunity exists for further scale building considering the fragmented nature of industry. For instance, market share of the top 5 players by no. of clubs is just 16 % compared to global top 5 average of about 40 %. Talwalkars has a decent spread-out across the North, West and South regions which together accounts for 94 % of the total gyms. It is also targeting different price segments with roll out of both regular as well as ‘low cost’ HiFi gyms especially in those tier II/III cities which may not support a full service Talwalkars’ gym. Talwalkars Better Value Fitness (TBVF) performed better than the market expectations on the topline front in Q1FY14. The Operating revenues grew by 31 % YoY to Rs. 37.4 crore mainly attributable to new initiatives such as NuForm, Zumba® and Reduce, accounting for around 18-22 % of the turnover. The Operating margins were in line with the markets estimates while the employee costs moderated to 2 % during the quarter. However, one-time administration expenses incurred on the launch of Reduce kept the EBITDA flat YoY. Though finance costs increased 18 % YoY, PAT has increased 22.6 % YoY to Rs. 3.2 crore due to various cost efficiencies. Despite the bad monsoons taking a hit on member additions the company was able to meet expectations and it is expected that there will be a renewed stimulus in demand from the next quarter for both its value-added and flagships products. There are not any listed comparable players and thus its closest comparable peers are the consumption companies like Jubilant Food works, Page Industries, Titan Industries etc which trades at an average PE of 28x to 36x, internationally the firms owning sports and fitness centers have been valued at an Ev/EBITDA of 6 to 9 times, while Talwalkars enterprise value stands at 5.39 times its EBITDA. At the current market price of Rs. 118.95, the stock is trading at 7.43 x FY14E and 5.53 x FY15E respectively. Earnings per share (EPS) of the company for FY14E and FY15E are seen at Rs. 16.00 and Rs. 21.50 respectively. It is expected that the company will keep its growth story intact in the coming quarters also. One could BUY TALWALKARS BETTER VALUE FITNESS LTD with a target price of Rs. 190.00 for Medium to Long term investment and for the SHORT TERM PLAYERS it should be Rs. 150.00 

KEY FINANCIALS	FY12	FY13	FY14E	FY15E
SALES (₹ Crs)	130.50	168.80	212.30	267.80
NET PROFIT (₹ Cr)	22.00	30.10	42.00	56.40
EPS (₹)	9.10	11.50	16.00	21.50
PE (x)	14.20	11.30	8.10	6.00
P/BV (x)	2.20	1.60	1.40	1.10
EV/EBITDA (x)	8.50	6.50	5.10	4.00
ROE (%)	15.30	14.40	16.80	18.40
ROCE (%)	14.60	15.50	17.70	20.20

I would buy TALWALKARS BETTER VALUE FITNESS with a price target of ₹ 150 for Short term and for the Medium to Long term the target would be ₹ 190. As I always say, I am a long term believer in markets & I do respect the markets and will keep a strict stop loss of 8 % or ₹ 110.40 on every purchase. (Why Strict stop loss of 8 % ?) - Click Here

READ HERE TO KNOW MORE ON LONG TERM INVESTING - CLICK HERE

VIEW THE POWER POINT PRESENTATION ON

RETURN ON CAPITAL

TALWALKARS BETTER VALUE FITNESS LTD : Spreading Fitness !!!

Scrip Code: 533200 / TALWALKARS

CMP:  Rs. 173.20; Buy at Rs.166 - Rs.170 levels.
Short term Target: Rs. 190; Long term Target Rs.250; STOP LOSS – Rs. 158.00; Market Cap: Rs. 417.68 Cr; 52 Week High/Low: Rs. 265.00 / Rs. 107.00

Total Shares: 2,41,15,672 shares; Promoters : 1,43,45,723 shares –59.49 %; Total Public holding : 97,69,949 shares – 40.51 %; Book Value: Rs. 59.70; Face Value: Rs. 10.00; EPS: Rs. 7.96; Div: 10.00 % ; P/E: 21.75 times; Ind. P/E: 17.77; EV/EBITDA: 15.79

Total Debt: Rs. 111.38 Cr; Enterprise Value: Rs. 529.06 Cr.

TALWALKARS BETTER VALUE FITNESS LTD: The Company was founded in 1932 and is based in Mumbai, India.  Talwalkars Better Value Fitness Limited (TBVF) was formerly known as Talwalkars Better Value Fitness Private Limited. The company operates a fitness chain in India. The company offers a suite of services, including gyms, spas, aerobics, nutrition counseling, physiotherapy guidance, yoga classes and health counseling under the ‘Talwalkars’ brand.  The Company has an 8,000 square feet residential training academy at Thane. The training academy offers about 4 to 6 weeks of training program for its staff joining at the new centers.  As of May o4 2012, it had 102 health clubs and 62 cities and had more than 75,000 members. Its health clubs/training centers are located in Andhra Pradesh, Gujarat, Karnataka, Kerala, Maharashtra, Madhya Pradesh, Punjab, Rajasthan, Tamil Nadu, Uttar Pradesh and West Bengal. In April 2012, through its subsidiary Talwalkars opened a health club in the of Gandhinagar.

Investment Rationale:

The management stated that they have put hold on the plans to roll out clubs which was a different format compared to gym which required much larger investments and a longer gestation periods which would have had a dilutive effect on return ratios (RoE, RoCE) in the near term so the plans has been put on a hold. It would continue to focus on gym expansion where it remains bullish on the opportunity in the market given the low penetration rates for organized players. 

TBVF has rolled out 19 gyms in 9M FY12 and it is slated to launch another 16 gyms in Q4, a traditionally strong quarter for the fitness business. This would take its total gym base to 126 of which about 90 would be owned and rest would be through a combination of subsidiaries, franchisees/JVs and HiFi gyms. Company plans to add 8 HiFi gyms in the current year through franchisee route which would not entail any capex for the company. In order to accelerate roll out in Tier II & Tier III cities, Talwalkars has conceptualized gyms under the ‘HiFi’ brands. These would be rolled out in areas with population of 3,00,000 – 5,00,000 which otherwise may not have supported a fully fledged Talwalkars gym. For instance, company has targeted HiFi gyms roll out in cities like Porbander, Faridabad and Solapur. These are typically ‘no frills’ gyms with area of 2,500 - 2,800 sq ft & about half of that is for a regular gym. HiFi gyms capex requirement is about half of a full service gym and their membership rates are also 60 % more of those of regular gyms. The company would roll out HiFi gyms through the franchisee route thereby eliminating funding needs for the roll out. In return for gym management, TBVF will earn royalty income at the rate of 6 % of revenues for first three years and 8 % thereafter. Talwalkars would also receive a one-time royalty income and equipment supply charge to the tune of Rs.10,00,000 each. HiFi gyms offers faster roll out since each roll out usually takes 8-10 weeks as compared to 14-16 weeks for typical Talwalkars gym and so HiFi gyms is the better road for Talwalkars to go ahead.

Outlook and Valuation:

Gym is a highly localized business in the sense it needs to be easily accessible to local population at an affordable price (at least from a mass market perspective). Talwalkars has managed to break away from its peers and now leads the scale with 109 gyms on consolidated basis. There is a vast opportunity exists for further scale building considering the fragmented nature of industry. For instance, market share of the top 5 players by number of clubs is just 16 % as compared to global top 5 average which is about 40 %. Talwalkars has a decent spread-out across the North, West and South regions which together accounts for 94 % of the total gyms. It is also targeting different price segments with roll out of both Regular as well as ‘Low Cost’ HiFi gyms especially in those tier II/III cities which may not support a full service Talwalkars’ gym. Membership growth too has kept pace with volume additions as seen from a 31 % membership CAGR over FY07-12 as compared to 29 % CAGR in gym base. Talwalkars is likely to incur about Rs. 1.8 Cr in capex per gym roll out while it would have shouldered about half the needs in case of a subsidiary. Since HiFi gym expansion would be largely through franchisee route, Talwalkars would not have to incur the capex for these gyms. Talwalkars is expected to add about 96 gyms in FY13-14 with 77 % of the gyms added under owned and HiFi brands. Accordingly, it is expected that the Capex/Sales ratio to decline to 21 % in FY13 from 45 % in current fiscal. On the pricing front, company intends to hike membership fees by 8 % for new gyms (<1 year of ops) from April’ 12. Given the largely fixed nature of costs it is expected that the operating leverage benefits to kick in over FY13/14, factoring in OPM of 44.9 % /45.2 %. Given that roll outs in next 2 years would be more through subsidiaries and HiFi franchisees (63 % share of incremental gym adds), it is expected that the capex intensity to decline to 21 % in FY14 from 45 % in current fiscal. This would help generate free cash flow in FY14. TBFV is a play on the growing healthcare market in India. It has a strong brand name and is now capitalizing, with rapid expansion. There are not any listed comparable players and thus its closest comparable peers are the consumption companies like Jubilant Food works, Page Industries, Titan Industries etc which trades at an average PE of 30 x FY13. At the current market price of Rs. 173.20, the stock is trading at 15.46 x FY13E and 11.47 x FY14E respectively. Earnings per share (EPS) of the company for FY13E and FY14E are seen at Rs. 11.20 and Rs. 15.10 respectively. It is expected that the company will keep its growth story intact in the coming quarters also. One could BUY TALWALKARS BETTER VALUE FITNESS LTD with a target price of Rs. 190.00 for Medium to Long term investment and for the SHORT TERM PLAYERS it should be Rs. 250.00 

KEY FINANCIALS	FY11	FY12	FY13E	FY14E
SALES (Rs. Crs)	92.80	117.20	160.50	202.20
NET PROFIT (Rs. Crs)	16.00	20.50	26.90	36.50
EPS (Rs.)	6.70	8.50	11.20	15.10
PE (x)	23.50	18.40	14.00	10.30
P/BV (x)	3.00	2.26	2.20	1.90
EV/EBITDA (x)	11.70	9.30	7.00	5.50
ROE (%)	19.10	15.20	17.30	19.80
ROCE (%)	16.40	15.00	18.00	18.70

I would buy TALWALKARS BETTER VALUE FITNESS LTD with a price target of Rs. 190 for the short term. As I always say, I am a long term believer in markets & I do respect the markets and will keep a strict stop loss of 8 % or Rs. 158.00 on every purchase.

READ HERE TO KNOW MORE ON LONG TERM INVESTING - CLICK HERE

TALWALKARS BETTER VALUE FITNESS LTD :Spreading Fitness !!!

Scrip Code: 533200 / TALWALKARS

CMP:  Rs. 166.00; Buy at current levels. Short term Target: Rs. 210, 6 month Target – Rs. 250; STOP LOSS – Rs. 152.75; Market Cap: Rs. 400.32 cr; 52 Week High/Low: Rs. 306.80 / Rs. 157.70

Total Shares: 2,41,15,672 shares; Promoters : 1,43,45,856 shares –59.49 %; Total Public holding : 97,69,816 shares – 40.51 %; Book Value: Rs. 51.74; Face Value: Rs. 10.00; EPS: Rs. 6.21; Div: 10.00 % ; P/E: 26.73 times; Ind. P/E: 26.33; EV/EBITDA: 19.00

Total Debt: Rs. 111.38 cr; Enterprise Value: Rs. 511.70 cr.

TALWALKARS BETTER VALUE FITNESS LTD: The Company was founded in 1932 and is based in Mumbai, India.  Talwalkars Better Value Fitness Limited (TBVF) was formerly known as Talwalkars Better Value Fitness Private Limited. The company operates a fitness chain in India. The company offers a suite of services, including gyms, spas, aerobics, nutrition counseling, physiotherapy guidance, yoga classes and health counseling under the ‘Talwalkars’ brand.  The Company has an 8,000 square feet residential training academy at Thane. The training academy offers about 4 to 6 weeks of training program for its staff joining at the new centers.  As of May 11- 2011, it had 102 health clubs in 52 towns and had more than 75,000 members. Its health clubs/training centers are located in Andhra Pradesh, Gujarat, Karnataka, Kerala, Maharashtra, Madhya Pradesh, Punjab, Rajasthan, Tamil Nadu, Uttar Pradesh and West Bengal.

Investment Rationale: Talwalkar Better Value Fitness (TBVF) is the largest health club player in India and amongst top 20 in the world. It is an early entrant into the health club market in India and has been able to build a strong brand name by providing high quality gym equipment and services. The fitness market size in India is estimated to be US$113 mn. The penetration of fitness market in India is 0.4 % taken for top 7 cities which are significantly lower than other nations like China 2.3 % & Japan 3.1 % & 3.7 % in Asia Pacific region. In India - the total number of fitness clubs are around 765 and number of membership are around 23,00,000. The industry is highly fragmented with many standalone gyms. This industry is in the early growth stages with little differentiation and high price sensitivity. A growing economy, growing income, increasing urbanization, improving lifestyle and higher health awareness in India will result in higher penetration of fitness market. As TBVF is the largest player in the market with a strong brand it will be a major beneficiary of this growing market. TBVF has a strong brand name in the health club market in the country. It has been able to provide high quality equipment with good service which has thus enabled it to be a prominent player in the otherwise fragmented market. TBVF is one of the first movers in the industry and has a pan India presence about 50 towns which will enable it to cater to the widespread market. TBVF will increase its owned gyms by double to 143 gyms by FY13. TBVF had raised Rs. 77.40 Cr in 2010 through an IPO to repay its high cost debt of Rs. 20.6 Cr and to fund its expansion plans for 27 gyms for Rs 50.2 Cr. The company has been able to deploy the funds as per expected use and will now require no further dilution for its future growth plans of 35 gyms each by FY13. With no further dilution required and the benefits of expansions to come, the return ratios are going to improve;It is expected that ROE to be around 20 % & ROIC – 13.7 % by FY13. TBVF had a debt-equity ratio of 2.1 x in FY10. Post the IPO the debt-equity has come down to 0.7 x in FY11.

Outlook and Valuation:

In India, as per United Nations the percentage of urban population is going to increase from 30 % in 2010 to 54.2 % by 2050. Increasing urbanization will result in greater usage of fitness club due to higher health awareness and growing lifestyle diseases. India has a young population and it is expected that the population will continue to remain young for the next two decades. Currently 65 % of the population is between the age of 15 - 64 and it is expected that 68 % of the population in 2030 will remain in this age group. It has been globally seen that the people in the age group of 18-54 tend to exercise more. As per TBVF every city/town with a population of 6,00,000 can accommodate one health club of its kind. The growing urbanization will thus increase the number of towns/cities with a population greater than 6,00,000 whereby further expanding the potential market for TBVF. The combination of a young population, higher literacy and increased awareness will result in increased number of people having membership of fitness clubs. As TBVF is one of the major players in the health club market in India with a pan India presence and has a first mover advantage it stands to gain tremendously. TBVF target markets are geographies where the population is greater than 6,00,000. TBVF gets 800-900 members within the first year of operations of the health club and 1,000 members within 18 months. The membership fee is around Rs. 13,000-15,000 p.a. and the payback period for a health club is around 3-4 years. TBVF besides having its own gyms models also has franchisees models. It has 7 franchisees & it charges 6 % - 8 % of revenues as royalty. The company plans to focus on opening more of its own gyms. TBVF in April, 2011 has announced to enter into the Tier III & Tier IV cities with the launch of HiFi Gyms. These gyms will be priced lower than the existing gyms and will have lesser facilities but will have similar operating margins as the current gyms. TBVF is opening 70 new owned gyms during FY12-FY13 across India and these are expected to contribute to the top line and bottom line. TBVF will be able to show CAGR in Revenue/PAT of 41%/38% during FY11-13. TBFV is a play on the growing healthcare market in India. It has a strong brand name and is now capitalizing, with rapid expansion. There are not any listed comparable players and thus its closest comparable peers are the consumption companies like Jubilant Food works, Page Industries, Titan Industries etc which trades at an average PE of 28 x FY13. 

At the current market price of Rs. 166.00, the stock is trading at 20.24 x FY12E and 13.07 x FY13E respectively. Earnings per share (EPS) of the company for FY12E and FY13E are seen at Rs. 8.20 and Rs. 12.70 respectively. It is expected that the company will keep its growth story intact in the coming quarters also. One could BUY TALWALKARS BETTER VALUE FITNESS LTD with a target price of Rs. 285.00 for Medium to Long term investment and for the SHORT TERM PLAYERS it should be Rs. 210.00
PEER COMPARISON OF TBVF WITH OTHER GYMS

METRICS	TBVF	GOLD GYM	FITNESS FIRST	FITNESS ONE
No. of Health Clubs	100	55	03	31
Size of Gym (Sq ft)	4,000 - 5,000	6,000 - 8,000	14,000 - 22,000	15,000 - 18,000
Avg.Fees/per annum (appx.)	14,000 - 16,000	16,000 - 18,000	24,000 - 35,000	16,000 - 18,000

KEY FINANCIALS	FY10	FY11	FY12E	FY13E
SALES (Rs. Crs)	66.10	102.30	148.50	203.90
NET PROFIT (Rs. Crs)	8.20	16.00	19.80	30.70
EPS (Rs.)	3.40	6.60	8.20	12.70
PE (x)	48.30	24.50	19.90	12.80
P/BV (x)	9.50	3.10	2.70	2.30
EV/EBITDA (x)	19.00	12.20	9.10	7.00
ROCE (%)	26.40	19.00	14.50	19.40
RONW (%)	11.00	11.10	11.12	13.70

I would buy TALWALKARS BETTER VALUE FITNESS LTD with a price target of Rs. 210 for the short term and Rs. 285 for the 6 month target. As I always say, I am a long term believer in markets & I do respect the markets and will keep a strict stop loss of 8 % or Rs. 152.75 on every purchase. 

Talwalkars Better Value Pvt Ltd : TBVF

Price Band - Rs.123-128, Face Value- Rs.10

Issue opens on - 21th April 2010, Wednesday

Issue closes on - 23th April 2010, Friday

QIB Book - 30,25,000 shares (50% of Net issue)

HNI Book - 9,07,500shares (15% of Net issue)

Retail Book - 21,17,500 shares (35% of Net issue)

Total No. of Shares offered - 60,50,000 shares or 25.09%

Equity Shares outstanding after the Issue - 2,41,15,672 Eq Sh

Equity Shares outstanding prior Issue - 1,80,65,672 Eq Sh

Total Size of the Issue- Rs. 74.42 Crs. - Rs. 77.44 Crs.

Talwalkars Better Value Pvt Ltd (TBVF) - Commonly famous as Talwalkars, is India’s largest chain of health centers. The company established in 1932, it operates 58 health clubs in 28 cities, serves 55,000 clients in India.Hence demands premium. Talwalkars were the Official Fitness Partners for Standard Chartered Mumbai Marathon in 2008 and 2009 and Femina Miss India Contest in 2009.

The proceeds will be used for setting up of 27 additional health clubs about Rs.50.22 cr and repaying certain unsecured loans of Rs. 20.59 cr. The issue will constitute 25.09% of the fully diluted post issue paid-up capital of the company. Promoters’ stake will be reduced to 59.39% and non-promoters to 15.42% post issue.

At upper band of Rs.128 the stock is available at 53.9x the P/E & 2.6x the P/Bv based on FY10 post issue EPS of Rs.2.4 & BVPS of Rs 48.6. For the year ended on 31st March 2009 company reported PAT of Rs.5.687cr on total income of Rs.59.424 crs, For the period ended in April-September 2009 ,Company posted PAT of Rs.31.90 cr on the total income of Rs. 358.82 cr.

CARE has assigned an IPO Grade 3 to Talwalkars Better Value Fitness Ltd IPO. This means as per CARE company has 'Average Fundamentals'. CARE assigns IPO grading on a scale of 5 to 1, with Grade 5 indicating strong fundamentals and Grade 1 indicating poor fundamentals.

TBVF IS AT EXPENSIVE VALUATION: BUT GOOD BUSINESS

The company has set a price band of Rs 123 to Rs 128 per equity share of Rs 10 face value. At the lower band of Rs 123 per share, the P/E would be 51.6 times the annualized EPS of Rs 2.4 for the nine months ended December 2009 (on post-IPO equity) and 82 times the EPS of Rs 1.5 (on post-IPO equity) for FY09. At the upper price band of Rs 128 per share, the P/E would be 54 times the annualized EPS for the nine months ended December 2009 and 85 times the EPS for FY09. There is no comparable listed company. The very high valuation already factors in very high growth rates in future.