Buy Phoenix Mills; target of Rs 297: Firstcall Research

Firstcall Research is bullish on Phoenix Mills and has recommended buy rating on the stock with a target of Rs 297 in its January 30, 2013 research report.
 
“Phoenix Mills Ltd is poised to carve a niche in the booming Indian real estate sector. The Phoenix Group is set to take on the challenge of redefining life style in Indian cities. Be it mega retail malls, entertainment complexes, commercial space or hospitality units, the Group are determined to make its presence felt in India. It has become the model for development of shopping & entertainment hubs across the country. The plan includes retail units, entertainment complexes, commercial units, hotels, parking and residential complexes. The Group has been a pioneer in converting mill land into modern, multi-use integrated property. High Street Phoenix was the first consumption center developed in India. The complex has been developed on 1.5 million square feet of space and houses retail and entertainment, commercial and residential complexes. The Group plans to foray into developing real estate in eight cities measuring a total of 214 lakh square feet. These include Mumbai, Bangalore, Chennai, Pune, Raipur, Agra and Indore.The Phoenix Group relies on its team's strengths, which include exceptional project management capabilities; project planning and aggressive rollout plans.”
 
“The Phoenix Mills Ltd is poised to carve a niche in the booming Indian real estate sector, reported its financial results for the quarter ended 31st Dec, 2012. The third quarter witnesses a healthy increase in overall sales as well as profitability of the company. The company’s net profit jumps to Rs.341.41 millions against Rs.269.02 millions in the corresponding quarter ending of previous year, an increase of 26.91%. Revenue for the quarter rose 37.32% to Rs.693.39 millions from Rs.504.93 millions, when compared with the prior year period. Reported earnings per share of the company stood at Rs.2.36 a share during the quarter, registering 26.91% increase over previous year period. Profit before interest, depreciation and tax is Rs.599.76 millions as against Rs.486.09 millions in the corresponding period of the previous year.”
 
“At the current market price of Rs 263, the stock P/E ratio is at 28.77 x FY13E and 23.53 x FY14E respectively. Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs.9.14 and Rs.11.18 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 23% and 21% over 2011 to 2014E respectively. On the basis of EV/EBITDA, the stock trades at 17.31 x for FY13E and 14.40 x for FY14E. Price to Book Value of the stock is expected to be at 2.11 x and 1.94 x respectively for FY13E and FY14E. We expect that the company surplus scenario is likely to continue for the next three years, will keep its growth story in the coming quarters also. We recommend ‘BUY’ in this particular scrip with a target price of Rs 297 for medium to long term investment,” says Firstcall Research report.

Shares held by Mutual Funds/UTI

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