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Motilal Oswal Report
Phoenix Mills Ltd. reported revenue of Rs 8.8 billion, which was up 35% YoY/ 8% QoQ, and was 14% above our estimate. The beat was led by higherthan-expected recognition from residential business in Q2 FY24.
In line with revenue growth, Ebitda grew at 35% YoY to Rs 5.1 (14% above estimate). Ebitda margins remained about flat YoY at 58.7% and declined by 200 basis points QoQ. profit after tax came in at Rs 2.5 billion, up 36% YoY and 31% above our estimate.
Phoenix Mills generated an operating cash flow (post-interest) of Rs 4.9 billion and spent Rs 3.3 billion on capex. Gross debt increased Rs 2 billion to Rs 43 billion, while net debt (Phoenix share) declined Rs 1.3 billion QoQ to Rs 15 billion.
We believe the company's growth trajectory remains intact, but current valuations indicate that near-term growth is priced in.
We roll forward our valuations to September- 25E and also incorporate the upcoming mall in Surat in our valuations, which resulted in an increase in our target price to Rs 2,000 (versus Rs 1,850 earlier), indicating 3% downside potential. Reiterate 'Neutral'.
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