Buy Phoenix Mills; target of Rs 2000 : HDFC Securities

HDFC Securities' research report on Phoenix Mills

Phoenix Mills (PHNX) reported strong revenue/EBITDA/APAT at INR 8.1/4.9/2.4bn, beating our estimates by 6/5/11%. Improving ARR in hospitality and pick-up in office leasing also contributed positively to margin improvement. For FY24, PHNX expects to achieve INR 115bn in consumption (a growth of +25%), with INR 25bn contribution coming from new operational malls i.e. Citadel Indore and Palladium Ahmedabad. The overall trading occupancy excluding new malls improved to 94% (90% in Q4FY23). PHNX expects to bring the overall trading occupancy (including new malls) to 95% by Q3FY23. PHNX is also ramping up its office portfolio with an aim to achieve 7.1msf of leased assets by FY26 from 2.5msf of the current operational portfolio. In FY24, 0.9msf of the office assets in Hebbal, Bengaluru, is expected to become operational.

Outlook

Given strong traction in consumption, captive mall expansion, the addition of office space, a strong business development pipeline and lower net debt, we maintain BUY, with an increased SOTP of INR 2,000/sh.

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