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ICICI Securities Report
The Phoenix Mills Ltd. clocked Q1 FY24 (April-June 2023) like-to-like consumption across malls at 109% of Q1 FY23 (April-June-22) levels.
Adjusted for store closures in Lifestyle Block of Palladium, Mumbai LTL consumption would have stood at 110% of Q1 FY23 levels.
With an expected ramp up in trading occupancy across operational malls of 5% along with inflation/volume linked consumption growth, the company guides for 12.5% LTL consumption growth in FY24.
We currently factor in LTL rental growth of 10% across operational malls for FY24E and estimate FY24E rental income of Rs 18.0 billion, of which Rs 3.7 billion is likely to be from four new malls (Ahmedabad / Indore /Bengaluru/Pune), and LTL rental income of Rs 14.3 billion (9% LTL growth).
We retain our 'Buy' rating on Phoenix Mills with a revised target price of Rs 1,851/share (earlier Rs 1,712) as we roll forward to March-24E net asset value and retain our 20% premium to NAV of Rs 1,542/share considering opportunities from office capex and new malls.
Key risks are fresh Covid waves impacting consumption and fall in mall occupancies and rentals.
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