Motilal Oswal has upgraded its rating on Phoenix Mills to "Buy," setting a new target price of Rs 2,044. This upgrade is based on the brokerage's bet in the company's growth, set to be fueled by new malls.
The brokerage's positive outlook is based on three primary factors. A strong pipeline of upcoming mall projects, sustained growth in its retail portfolio, and execution capabilities.
Retail Portfolio To Drive Growth
The report notes that the company is on the verge of a new phase of growth as it commissions a series of new retail properties. The new projects are expected to drive growth beyond the fiscal year 2027.
Motilal Oswal notes that the company's retail portfolio continues to perform well, with healthy consumption trends and strong occupancy rates across its existing malls. This sustained performance provides a stable foundation for the upcoming expansion.
Commercial Portfolio And Execution
The brokerage has factored in the company's demonstrated ability to successfully execute large-scale projects, which gives them confidence in the timely and effective launch of the new malls.
The note also mentions that the company's commercial portfolio is also performing well, with steady growth in rentals and a healthy pipeline of new office spaces. This diversified growth across both retail and commercial segments strengthens the overall investment thesis.
Valuation
In terms of valuation, the target price of Rs 2,044 is based on a blended valuation approach, assigning a value to both the retail and commercial portfolios.
The report anticipates that the successful commissioning and stabilisation of the new malls will significantly boost the company's earnings visibility and drive a re-rating of the stock.
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