Talwalkars flexes muscles after announcing demerger of gym business

Talwalkars Better Value Fitness rose 4.36% to Rs 236.95 at 10:29 IST on BSE, after the company's board of directors approved the demerger of gym business into separate company.

The announcement was made after market hours yesterday, 24 November 2016.

Meanwhile, the BSE Sensex was up 134.29 points, or 0.52%, to 25,996.46

On BSE, so far 15,000 shares were traded in the counter, compared with an average volume of 26,386 shares in the past one quarter. The stock hit a high of Rs 239.55 and a low of Rs 232.65 so far during the day. The stock hit a 52-week high of Rs 302.05 on 3 October 2016. The stock hit a 52-week low of Rs 182 on 29 March 2016. The stock had underperformed the market over the past 30 days till 24 November 2016, sliding 16.48% compared with the 7.10% decline in the Sensex. The scrip had also underperformed the market in past one quarter, falling 12.84% as against Sensex's 6.92% decline.

The small-cap company has equity capital of Rs 29.70 crore. Face value per share is Rs 10.

Talwalkars Better Value Fitness said that in order to achieve better management and to have clear focus on business operations, the management of the company has decided to demerge gym business, thereby transferring gym business of Talwalkars Better Value Fitness to Talwalkars Lifestyles, in the interests of maximizing overall shareholder value. The gym business offers a diverse suite of services including gyms, spas, aerobics, yoga and health counseling under the brand Talwalkars. As on 31 March 2016, the gym business has 176 fitness centers in 85 cities across India and Sri Lanka serving over 1.68 lakh members. The turnover of gym business stood at Rs 197.61 crore or 86.21% of total business of Talwalkars Better Value Fitness in the latest financial year.

The shareholders of Talwalkars Better Value Fitness will get one equity share of Talwalkars Lifestyles for each share held of Talwalkars Better Value Fitness. The shares of Talwalkars Lifestyles will be listed on the stock exchanges, after the effectiveness of the scheme, Talwalkars Better Value Fitness said.

On consolidated basis, Talwalkars Better Value Fitness' net profit rose 18.23% to Rs 29.12 crore on 11.38% rise in net sales to Rs 91.59 crore in Q2 September 2016 over Q2 September 2015.

Talwalkars Better Value Fitness is a leading chain of health and fitness centers in India.

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