HDFC Securities is bullish on Phoenix Mills has recommended buy rating on the stock with a target price of Rs 841 in its research report dated November 14, 2020.
HDFC Securities' research report on Phoenix Mills
Phoenix Mills (PHNX) reported revenue at Rs 2.1bn, -48%/+60% YoY/QoQ and 15% ahead of our estimate. However, lower-than-expected EBITDA margin and higher interest costs led to loss of Rs 359mn (vs estimated loss of Rs 137mn). All the retail assets have been operating since the end of the quarter. While consumption had reached to 40-55% across major malls in 2QFY21, it reached to 85% of pre-COVID level during the first week of November-20, aided by longer operational hours, opening of F&B section and festive season. Revenue from commercial was at 94% of 2QFY20. Residential segment also posted strong recovery with sales of Rs 447mn. On the back of QIP in August, net debt reduced to Rs 34bn from Rs 43bn on Mar 20-end with net D/E at 0.72x (vs 1.15x at the end of FY20).
Despite the near term challenges, we maintain BUY on PHNX given its strong positioning and healthy balance sheet. We tweak our FY21/22/23 estimates and raise TP to Rs 841/sh (vs Rs 828/sh earlier).
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