PINC Research is bullish on Phoenix Mills (PHNX) and has recommended buy rating on the stock with a target price of Rs 265 in its September 14, 2011 research report.
“Phoenix Mills (PHNX) is strategically poised to benefit from investments in subsidiaries/associate companies FY12 onwards. Triggers for re-rating the stock:(a) Reduction in debt in all the Marketcity projects supported by rental income and monetization of commercial assets, especially the operational Pune project, Kurla and Bangalore Marketcity projects; (b) Increase in stake in the Kurla and Bangalore Marketcity projects transforming these entities from associate to subsidiary; (c) Associate companies for Kurla and Bangalore Marketcity to contribute to the profit from FY12. The mall and Phase-I of the Kurla commercial assets are likely to start in Q3FY12; (d) Another subsidiary, BARE, has kick-started operations with the commercializing of the Lucknow mall and Bareilly project is expected to commence operations in Q4FY12.”
“Phoenix holds 73.5% stake in BARE, which has already commenced operation of the Lucknow project in FY11 and may commence operations at the Bareilly project in Q4FY12 . We also expect repayment of debt in this SPV to commence soon which would help reduce consolidated debt. Majority hospitality projects on hold: PHNX has put on hold all the hotel projects except the Agra project. Further, the company infused Rs200mn in FY11 in the hotel projects, taking total investment to Rs3bn until date. We maintain a ‘BUY’ on the stock and upgrade our target price from Rs240 to Rs265 after assigning 15% discount (from 20% earlier) to NAV ,” says PINC Research report.
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