Shares of Phoenix Mills jumped 5.71% on Monday’s early trades to reach an intraday high of ₹ 1355.00 apiece on the National Stock Exchange, after Morgan Stanley initiated coverage on the stock with an overweight rating. Last week, Motilal Oswal Financial Services had also initiated coverage on the stock. At 12:27 PM, the stock was trading at ₹ 1307.00 apiece.
Phoenix Mills is a leading retail-led mixed-use asset developer that operates seven malls across eight cities in India. Currently, three malls are under construction.
Morgan Stanley has an overweight rating on the stock with a price target of ₹ 1700. This translates to an upside of 30.07% as compared to its current share price of ₹ 1307.00 apiece.
The brokerage said that the company has a portfolio of well-located, mixed-use destination malls and is set to benefit from India’s consumption growth. It added that the company is in an expansion phase and aims to more than double its rental portfolio over the next three to four years.
Phoenix Mills has planned expansion of rental assets from 9 million square feet in 2021-22 to 21 million square feet in 2026-27 and this is expected to drive its operating profit higher.
Last week, Motilal Oswal initiated coverage on the stock. It has given a SOTP-based target price of ₹ 1,700, indicating an upside potential of 30.07%. However, the brokerage’s two-year forward scenario indicates a target price of ₹ 2,000 on the shares of Phoenix mills, representing an upside of 53.02% as compared to its current share price.
The brokerage said that the company is expected to report 34% CAGR in its commercial (retail + Office) EBITDA, driven by a recovery in leasing in existing assets and the commencement of rentals from new assets. In fact, the company’s upcoming retail assets are 90% leased out.
Phoenix mills is a mid-cap stock with a market capitalization of ₹ 22,894 crores. It has a low return on equity of 4.08% and an ideal debt-to-equity ratio of 0.56. The company’s promoters hold a 47.31% stake in the company followed by foreign institutions with 29.27%, mutual funds with a 17.55% stake and retail investors that hold a 5.31% stake in the company.
The company reported a 60.90% increase in its revenue to ₹ 683.85 crores in the October to December quarter of 2022, against ₹ 425.01 crores reported in the corresponding quarter last year. Its net profit surged 107.71% from ₹ 102.26 crores to ₹ 212.4 crores in the corresponding quarter last year.
Written by Simran Bafna
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