Buy Phoenix Mills; target Rs 265: PINC Research

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Buy Phoenix Mills; target Rs 265: PINC Research

PINC Research is bullish on Phoenix Mills and has recommended buy rating on the stock with a target price of Rs 265 in its November 25, 2011 research report.

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PINC Research is bullish on Phoenix Mills and has recommended buy rating on the stock with a target price of Rs 265 in its November 25, 2011 research report.

"Phoenix Mills, cabinet has cleared 51% FDI in multi brand retail and 100% FDI in single brand retail. Post clearance, MNC retail chains (Walmart, Tesco) are eligible to open shops in Tier I and II Indian cities with population in excess of 1 mn (Presently 42 cities). The move will indirectly benefit Phoenix Mills as its two arms have projects in Tier-I and II cities. 1)BARE ( Big Apple Real Estate) - a 74% subsidiary of Phoenix Mills is a mixed use developer based in North India with a focus in Tier II cities retail malls (1 mall in operation and two under construction).(2) EWDPL( Entertainment World Developers Pvt Ltd) where Phoenix holds 40.3% share has its projects in Tier II and Tier III cities and has 17 projects of which 12 are FDI compliant and 5 are non FDI compliant. Four are already operational and 5 projects are under construction. We believe the FDI clearances will benefit Phoenix in the longer run with enhancement of retail market and consumption."

"Phoenix holds 74% stake with Rs 900mn investment in Big Apple. It has 3 projects in Tier-II cities of which one is operational (Lucknow mall) and other two is under construction. We believe the clearance of 51% FDI in multi-brand retail will further enhance the retail consumption in Tier I and II cities. BARE will be one of the beneficiaries as its one project is operational and the other two projects are likely to be on stream going forward."

"EWDPL is an Indore-based developer which develops townships, retail and residential complexes, and IT parks under the Treasure brand. It has a total developable area of 24.5msf (~17 projects in Tier II cities), of which 4 malls have been completed with total of 1 msf. The company is currently having four operational malls of which two are in Indore and the other two at Nanded and Ujjain. Most of the EWDPL projects are in Tier-II cities which will benefit from multi brand FDI in retail (likely to come in cities where population is over 1 mn). The company has so far invested Rs1.6bn for 40.3% stake. We maintain a BUY on the stock with a target price of Rs 265 after assigning a 20% discount to NAV," says PINC Research report.

FIIs holding more than 30% in Indian cos

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To read the full report click on the attachment