Buy Nexus Select Trust; target of Rs 135: ICICI Securities

Buy

ICICI Securities research report on Nexus Select Trust

Nexus REIT clocked 18% LTL (like-to-like) consumption growth across its urban consumption centres (malls) in Q1FY24 with footfalls up 10% YoY and balance growth from high spend per customer. We expect Nexus’ NOI CAGR of 10.4% over FY23-26E to INR18.8bn on expected ramp-up in occupancies in existing assets, annual rental escalations and mark-up of leases that are expiring.

Outlook

Retain BUY with Mar’24E DCF-based TP of INR135/share (earlier INR 126) assuming lower cap rate of 7% (earlier 7.5%) given strong consumption growth. At CMP, we expect NDCF distribution yield of 6.5% in FY24E, 7.0% in FY25E and 7.5% in FY26E. We expect ~65-70% of distribution to be in the form of dividends/principal repayments that are tax free. Key risk: Slowdown in consumption / fall in occupancies and rentals.

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Nexus Select Trust - 17 -08 - 2023 - isc