Buy Phoenix Mills; target of Rs 707: Axis Direct

Axis Direct's research report on Phoenix Mills

Malls: Rental income at its malls grew 10% YoY on improved consumption growth of 8% YoY (vs. 4% YoY in Q2 which was impacted by refurbishment at High Street Phoenix (HSP). Management expects rental growth to sustain over FY19-20, driven by rental renewals (~1.8 msf/~35% of its leasable area up for renewal over FY18-20) and uptick in consumption at its malls.

Outlook

Development business can generate net cash flow of Rs 25-30 bn over next 5-6 years, which could be used to fund growth/ deleveraging. Maintain BUY. For all recommendations report, click here

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