Phoenix Mills edges higher on 'buy' rating from Morgan Stanley after strong Q1 biz update

Phoenix Mills stock has zoomed over 140 percent, more than doubling investors' money. In comparison, Nifty delivered returns of 26 percent during this period.

Shares of Phoenix Mills edged higher on July 9 after Morgan Stanley issued an overweight call with a target price of Rs 3,400 per share. Despite a slower-than-expected consumption growth in Q1FY25, the company has shown promising signs, the brokerage noted.

At 11.25 am, shares of Phoenix Mills were trading 1.3 percent higher at Rs 3,803.30 on the National Stock Exchange (NSE). So far this year, the stock has soared 68 percent, beating Nifty's returns of 11 percent during this period.

Phoenix Marketcity in Mumbai and Palassio in Lucknow experienced double-digit growth during this period, demonstrating the strong performance of these established malls.

The overall growth was further supported by the contribution from new malls, indicating a balanced expansion strategy, said Morgan Stanley. When examining the Q4 moving average numbers, Phoenix Mills has consistently achieved a 23-24 percent on-year growth over the last four quarters.

This sustained performance underscores the company's resilience and potential for continued growth in the retail sector, the brokerage said.

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In its Q1FY25 business update, Phoenix Mills recently said that its consumption (retailer sales) stood at Rs 3,214 crore in the June quarter growing by 25 percent from the corresponding quarter of FY24.

The retail space provider’s gross retail collections grew 28 percent YoY to Rs 794 crore in Q1FY25. The company’s weighted average trading occupancy stood at 90 percent and weighted average leased occupancy across major malls was 97 percent in the June quarter.

Phoenix Mills’ newly launched malls continued to see a ramp-up in trading occupancy. The company mentioned in the business update that the trading occupancy of Phoenix Mall of Asia (launched in October 2023) stood at 72 percent, up from 57 percent in the March 2024quarter.

The trading occupancy of Phoenix Mall of the Millennium (launched in September 2023) grew to 80 percent in Q1FY25 from 76 percent in the previous quarter.

Phoenix Mills’ commercial offices vertical saw strong leasing traction in Q1FY25, with gross leasing of 1.51 lakh sqft in the company’s operational assets at Kurla, Mumbai, and Viman Nagar, Pune.

The company said that occupancy in the commercial offices vertical for operational assets improved to 71 percent in June 2024 compared to 70 percent in the quarter before.

Phoenix Mills posted an improvement in its sales trajectory from the residential segment in Q1FY25. The company informed the bourses that Q1 sales have improved due to strong demand and faster conversions.

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In Q1FY25, Phoenix Mills posted gross residential sales of Rs 50 crore, collections stood at Rs 60 crore. In the same period, the Average Selling Price stood at Rs 26,000 per sqft.

In the last one year, the stock has zoomed over 140 percent, more than doubling investors' money. In comparison, Nifty delivered returns of 26 percent during this period.

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