Phoenix Mills Ltd. share price target

Phoenix Mills (PML) is a market leader and owner of prime malls in India. It started the real estate business with its iconic High Street Phoenix mall. Sailing on its retail-led mixed-use development model, PML has an operational asset portfolio of eight operational retail assets aggregating 5.9 msf and four operational commercial assets aggregating 1.16 msf. Going ahead, PML plans to almost double its retail portfolio and triple its commercial asset portfolio. Consequently, we expect its rental income to almost double to | 1702 crore in FY18-23E. We also highlight that PML is...

6 November 2018 PHNXs revenue increased 9.2% YoY to segment (+11% to INR2,839m). EBITDA grew 11% YoY to INR1,981m (our 2QFY19/1HFY19 includes a realized gain of INR358m on the sale of investments of 0.5m equity shares of Graphite India. Interest expense of INR917m (+7% YoY) came in higher than our estimate of INR865m. Consequently, PAT of INR620m (48.5% YoY) missed our estimate of INR664m. Revenues grew by 7% YoY to INR8,179m, EBITDA by 11% YoY to INR3,935m and PAT by 44% YoY to INR1,217m. investment of INR18b, ISML has already invested INR12.8b on acquisitions (including Indore asset, PMC 2 at Wakad in Pune, PMC 2 at Hebbal in Bangalore), which also includes land cost and initial expenses. (2) Lucknow retail asset to begin operations by Diwali next year. We believe that PHNX provides a unique way to play Indias retail growth story.

On a standalone basis ( only High Street Phoenix (HSP)and Palladium, Mumbai), income from operations increased 6% YoY toINR3,972m in FY18 from INR3,759m in FY17. On a consolidated basis, income from operations decreased by 11 % to INR16,198m in FY18 from INR18,246min FY17. The decrease in revenues was on account of the Classic Mall Development Company (PMC Chennai) being classified as an associate against a subsidiary previously. Total retail income from malls stood at INR10,595m,down 11% YoY. Hospitality and other revenue came in at INR3,429m, up 12%YoY. Revenue from residential projects stood at INR1,562m, while commercial revenue was INR611m. Consolidated EBITDA decreased by 8% to INR7,774m inFY18 from INR8,469m in FY17; however, consolidated margins have increased to 48% in FY18 from 46% in FY17

Performance of the company during Q1FY19 was in line with our estimates. Rental growth was driven by the strong operational performance of Market City malls PMC Chennai, PMC Pune & PMC Mumbai as well as High Street Phoenix & Palladium. Commercial and hospitality segment also registered 35%/6% YoY growth respectively led by improvement in rentals and ARRs. High Street Phoenix performance was led by rental improvements as North Sky zone and new F&B; outlets which has an area of 50,000 sq ft comprising of nearly 13 retailers has started contributing towards improvement in rental income....

9 August 2018 PHNXs revenue grew 4% YoY to INR4,132m (est. EBITDA grew 11% YoY to INR1,953m (est. INR2,207m), with the margin expanding 280bp YoY to 47.3% (est. Interest expense declined 6% YoY to INR846m (est. PAT, thus, increased 40% YoY to INR597m (est. of INR656m), led by a strong operational performance from the Retail and Commercial segments, along with lower finance costs. Consumption was up only 5% YoY to INR17b off a high base (advancement of sales in the run up to GST rollout, with sales rising 19% YoY in 1QFY18). Retail rental income increased 15% YoY to INR2,419m in 1QFY19, driven by a strong operational performance of PMC Pune, Mumbai, Chennai, and HSP and Palladium, Mumbai. Commercial office income increased 35% YoY to INR149m due to increased contribution from Art Guild House, PMC Kurla.

We met the management of Phoenix Mills (PML) to understand the company, its business model and future growth prospects. PML is a market leader and owner of prime malls in India. Sailing on its retail-led mixed-use development business model, PML has a portfolio diversified into retail (mall), commercial, hospitality & residential segments. Key takeaways are: -i) To double mall portfolio to ~11-12 msf over the next few years ii) to expand its commercial portfolio from 1.6 msf to 3.1 msf (1.12 msf under construction and remainder under planning stage) and iii)...

PHNX's revenue declined 4%YoY to INR4,366m (est. of INR4,410m) in 4QFY18 due to reclassification of its subsidiary. Thus, on a like-to-like (L2L) basis, revenue was up 9% YoY toINR4,962m. EBITDA margin expanded 550bp YoY to 49.5% (est. of 48.7%). PAT rose 102% YoY to INR1,037m, higher than our estimate of INR690m due to lower tax and interest. For FY18, revenue fell 11% to INR16.2b (+1% on L2Lbasis), EBITDA margin expanded 150bp to 48% and PAT grew 28% to INR2.6b

PHNX - a pioneer in developing and operating malls - has become a partner of choice for retailers in India due to its impressive track record of consumption-led growth and strong portfolio of eight malls (6msf) spread across the top cities in India. This apart, the company specializes in mall management, an area where its competitors lag. Thus, we believe that it offers a unique opportunity for any retailer (both domestic and global) looking to expand rapidly in India. All this makes PHNX a 'specialist' play on India's promising consumption growth story, in our view. CPPIB has recently infused equity capital of INR16.6b (in tranches) in its subsidiary, Island Star Developers, and with leverage of 1:1, it will create a war chest of INR32b, gearing up the company for the next leg of growth. PHNX plans to acquire and build up to four new malls.

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 r

Stable operations; Chennai Mall back on track Phoenix Mills (PHNX)'s 3QFY18 profit increased 46% YoY as reduction in interest cost and improving operations across assets improved profitability. Consumption and trading density of its retail assets grew 8% and 6% YoY, respectively. While Kurla and Bangalore malls recorded consumption increases, Chennai and High Street Phoenix (HSP) saw muted consumption growth during the quarter. In HSP, 11% of leasable area became operations in Dec'17; Chennai consumption has stabilised on completion of category changes introduced in the mall. Rentals continued to improve across malls (10% YoY) and hotel revenues...