Promising Growth Ahead

Torbit- May 26, 2024

With its mall and hotel verticals putting up a strong show, residential segment boosting revenue, and office rentals set to scale up in FY25, Phoenix Mills has promising times ahead.

Phoenix Mills Ltd. Residential ’ strong growth is aided by the opening of new malls. Further, due to higher contribution by the residential segment, the company’s FY 24 revenue jumped 51 percent YoY to INR 39.7 billion and its Adj PAT (Profit After Tax) stood at INR 11 billion, up 37 percent YoY.The sound financial health of the company? can also be gauged from Operating Cash Flow (OCF- Post Interest) rising by 27 percent to INR 17.8 billion and net debt declining by INR 1 billion to INR 15.6 billion.

According to a? latest report by Motilal Oswal Financial Services Ltd , new malls have been driving? strong consumption and rental growth.? Consumption across company’s mall portfolio was up 23? ?percent? YoY in FY 24 to INR 113.4 billion .? ? ? ??

FY24 retail rental income grew 27 percent YoY (in line with consumption growth) to INR16.6b as new malls contributed 18 percent to the overall revenue. Leased occupancy stood at 97 percent in March 2024. With the company expecting to reach trading occupancy of over 95 percent by the end of FY 25, up from 88 percent in March 24, there will be 30 percent upsurge in retail rental income in FY 25. However, with no new malls expected to be commissioned over the next two years, rental CAGR is likely to subside to 15 percent over FY25-27.

Hospitalty segment? has also been a driving factor with total income growing 11 percent YoY to? INR 1.6 billion and EBITDA was up 15 percent YoY to INR 0.75 billion in 4QFY24 as both? Marriott Agra and? St. Regis reported? strong occupancy and around 10-11 percent growth in ARR (Average Room Rent). The company has also shown healthy? performance by commercial segmment , with total income rising by over 22 percent to INR 480 million and EBITDA rising 14 percent to INR 300 million . As Phoenix Mills is likely to deliver 1.6 msf of office assets across Bengaluru, Pune and Chennai over the next 6-9 months, office rental income? is expected to register a CAGR of 39 percent to reach INR 4.7 billion over FY 24-27.On the retail front, the company is well on track to deliver mall space of? 1msf? each year.

Check out Motilal Financials' recent report here: https://bit.ly/3VaeHSC

Sanjeev Kathuria Vinod Behl Chandra Rijwani Motilal Oswal Financial Services Ltd Amarjeet Pandey Prashant Pandey Jagriti Chaudhary Swati Pandey ?