Phoenix Mills - Pressing The Growth Pedal: ICICI Securities

ICICI Securities Report

The Phoenix Mills Ltd. has clocked a compound annual growth rate of 14% in consumption and 13% in retail rental across its mall portfolio over the last decade (FY13-23). Further, like-to-like consumption base for FY23 across the company’s operational malls was 19% higher than FY20 levels.

With the company’s Wakad, Pune having opened in September 2023 and Hebbal, Bengaluru also expected to open shortly and Indore/Ahmedabad malls having opened in FY23, the focus now shifts to growth from new assets.

We expect Phoenix Mills to achieve a 17% rental income compound annual growth rate (excluding new Kolkata asset) over FY20-25E, resulting in Rs 22.4 billion of rental income in FY25E versus ~Rs 10.3 billion in FY20.

We maintain our 'Add' rating with a revised target price of Rs 1,928/share (earlier Rs 1,851) based on 25% premium (earlier 20%) to one time March 2024E net asset value of Rs 1,542/share considering opportunities from new offices and malls.

Key risks are fall in mall occupancies and rentals.

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