Buy Phoenix Mills; target of Rs 1845: Motilal Oswal

Motilal Oswal's research report on Phoenix Mills

We initiated coverage on Phoenix Mills (PHNX) in Mar’23 with a positive view on the back of a healthy ramp-up in new malls in Indore and Ahmedabad and the scheduled completion of malls in Pune and Bengaluru (est. 34% EBITDA CAGR over FY23-25). The company has progressed well on ramping up occupancy in Indore and Ahmedabad and is on track to deliver Pune and Bengaluru malls in 2QFY24. Thus, we continue to estimate a 31% EBITDA CAGR over FY23-25E. However, with a 30% runup in the stock price since our initiation, we believe a large part of earnings growth over the next two years is already priced in and see limited upside potential in the near term. Hence, we downgrade PHNX to Neutral.

Outlook

Hence, we downgrade the stock to Neutral with our SOTP-based revised TP of INR1,845 (10% upside potential).