Synopsis:
Phoenix Mills is in focus after Motilal Oswal predicts a 35% upside in the stock, citing a strong growth expected from the commissioning of new malls, a strong revamp to increase its trading occupancy, and rental income.
The shares of this leading Indian Mall retail chain is in focus after Motilal Oswal has increased its latest price target by 24 percent. In this article, we will discuss more about this in detail.
Analyst Comments
Leading brokerage house, Motilal Oswal, hiked Phoenix Mills stock target price by 24 percent by fixing a price target of Rs 2,044 per share from Rs 1,646 per share, signalling an upside of 35 percent from its Monday’s closing price of Rs 1,517.10 per share.
The brokerage cited that it is optimistic about Phoenix Mills’ growth trajectory, predicting it will pick up speed beyond FY27 mainly because of the launch of new malls.
Motilal Oswal points out that Phoenix Mills is really ramping up consumption at its established malls while new ones are coming online at a strong pace. By acquiring the remaining 49 percent stake in Island Star Mall Developers, they’re not just enhancing their retail portfolio but also unlocking significant long-term value.
They anticipate the company’s retail rental income will soar at a remarkable 21 percent CAGR from FY25 to FY27, hitting Rs. 2,800 crore by FY27. The recently opened malls in Lucknow, Indore, and Ahmedabad have already achieved an impressive 94 percent trading occupancy within just 6 to 8 quarters, and the company is eager to replicate this success with upcoming projects in Gujarat and Kolkata.
To tackle the flat consumption seen in some of their older malls, Phoenix Mills is giving a facelift to outdated spaces and replacing underperforming anchors with trendy fashion and lifestyle brands. These enhancements, along with strategies to boost trading occupancy, are expected to keep the momentum of strong consumption growth going.
Motilal Oswal also pointed out that the company’s office portfolio is on track to expand nearly fourfold to 7.1 million sq. ft. by FY27, which would elevate rental income to Rs. 600 crore, a staggering 71 percent CAGR over FY25-27.
In the hospitality sector, Phoenix Mills has plans to triple its portfolio to over 1,800 keys, backed by new premium hotels in Bengaluru, Indore, and Thane, as well as the development of the 400-key premium hotel, Grand Hyatt at MarketCity mall in Bengaluru by FY27-28.
In summary, Motilal Oswal is feeling pretty positive about the long-term growth prospects for Phoenix Mills. They see exciting opportunities ahead with new mall openings, expanding their portfolio, and increasing rental income. The stock has the potential for a 35% upside, but to really hit those targets, they must execute well and successfully ramp up their upcoming projects.
Written by Satyajeet Mukherjee
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