Buy Phoenix Mills; target of Rs 2300: Emkay Global Financial

Moneycontrol • 1 day ago

Original source

Key Investment Pillars

  • Sustained retail consumption growth: Phoenix Mills (PHNX) has seen strong growth in retail consumption, with a 28% yoy increase in 1HFY27, driven by broad-based growth across categories and malls.
  • Asset revamps and lease renewals: The company's asset revamp and lease renewal strategies have led to healthy growth, with all malls delivering double-digit consumption growth.
  • Development pipeline: PHNX has a strong development pipeline, with three under-construction assets expected to commence rentals by FY29 and another three projects expected to be operational by FY31, providing growth visibility beyond FY30.
  • Improving occupancy and rental growth: The company's operational portfolio is expected to drive mid-teens rental growth over the medium term, supported by improving occupancy and lease renewals.

Thesis Validation Checklist

  • Consumption growth: Monitor high-teens like-for-like growth in 2HFY27, adjusted for festive days.
  • Rental revenue growth: Track mid-teens rental growth in the operational portfolio over the medium term.
  • Asset additions: Watch for the commencement of rentals from under-construction assets and the progress of brownfield projects.
  • Lease renewals and occupancy: Monitor improving occupancy and lease renewals, which should drive rental growth.
  • Land acquisitions: Track the company's land acquisition pipeline, which should support future growth.