Technology

Cravatex Ltd. (Cravatex) is a market leader in providing fitness equipment
distribution under its brand Proline Fitness and represents the 100-year old Italian
brand, FILA, in India. Cravatex has recently acquired sub-license to distribute the
products of FILA in the United Kingdom (UK) and Ireland. The company has also
been forming strategic partnerships with various health club chains in India such as
Talwalkars and Gold Gym in the fitness equipment segment. Cravatex is trading at
an attractive 9.8x PE and 0.5x EV/Sales on FY2014E. We recommend Buy on
Cravatex with a target price of `800, based on target PE of 12x and implied
EV/Sales of 0.6x for FY2014E.

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