Phoenix Mills Ltd's results were ahead of our estimates led by improvement in consumption and rental revenues. Rental growth was driven by the strong operational performance of Market City malls - PMC Pune & PMC Mumbai as well as High Street Phoenix & Palladium. Commercial and hospitality segment also registered 5%/6% YoY growth respectively led by improvement in rentals and ARRs. Growth going ahead is likely to be led by improvement in rentals as well as uptick in residential segment revenue booking.
- Retail segment revenues are likely to witness healthy improvement going forward with rental renegotiations and consumption improvement. Residential segment revenues are likely to improve with improvement in market activity in its key regions.
- Average interest rate of debt has come down YoY with refinancing as well as rating improvements but sequentially it has now started to move up.
- Company's retail portfolio expansion of 5 new malls is progressing well and is on track to increase its retail portfolio size to 11-12 mn sq ft by FY23.
Valuation and outlook
- At current price of Rs 601, stock is trading at 33.6x and 29.3x P/E and 14.4x and 13.4x EV/EBITDA on FY19/20 consolidated estimates respectively. We continue to remain positive on the company and maintain our price target of Rs 707 on FY20 estimates. Maintain BUY.
Shares of The Phoenix Mills Ltd was last trading in BSE at Rs.609 as compared to the previous close of Rs. 602.6. The total number of shares traded during the day was 2079 in over 203 trades.
The stock hit an intraday high of Rs. 616.9 and intraday low of 599.75. The net turnover during the day was Rs. 1262022.