MOSL: PHOENIX MILLS (Buy)-PAT growth impressive; On track to achieve FY23 target
Phoenix Mills: PAT growth impressive; On track to achieve FY23 target
(PHNX IN, Mkt Cap USD1.4b, CMP INR645, TP INR757, 17% Upside, Buy)
- Healthy operational performance: PHNX's revenue grew 4% YoY to INR4,132m (est. of INR4,487m) in 1QFY19. EBITDA grew 11% YoY to INR1,953m (est. INR2,207m), with the margin expanding 280bp YoY to 47.3% (est. of 49.2%). Interest expense declined 6% YoY to INR846m (est. of INR857m). PAT, thus, increased 40% YoY to INR597m (est. of INR656m), led by a strong operational performance from the Retail and Commercial segments, along with lower finance costs.
- Strong growth in rental income: Consumption was up only 5% YoY to INR17b off a high base (advancement of sales in the run up to GST rollout, with sales rising 19% YoY in 1QFY18). Retail rental income increased 15% YoY to INR2,419m in 1QFY19, driven by a strong operational performance of PMC - Pune, Mumbai, Chennai, and HSP and Palladium, Mumbai. Commercial office income increased 35% YoY to INR149m due to increased contribution from Art Guild House, PMC Kurla. The St. Regis, Mumbai reported a strong set of numbers, with EBITDA up 9% YoY to INR242m, higher occupancy of 74% (inched up 2%), and improved ARRs of INR11,295 (+5% YoY).
The Phoenix Mills Limited is an India-based company engaged in the construction of buildings carried out on own-account basis or on a fee or contract basis. The Company is engaged in the development and operation of malls and other real estate properties. It operates through twos segments: Property & Related Services, and Hospitality Services. It specializes in the ownership, management and development of retail-led mixed use properties that include shopping, entertainment, commercial, residential and hospitality assets, aggregating approximately 17.5 million square feet over 100 acres. Its core business includes Retail, Hospitality, Commercial and Residential. Under the Retail segment, it operates seven malls in six cities. Under Commercial and Hospitality segments, it operates five commercial centers in two cities and two completed hotel projects. The upscale mall houses various international brands, such as Gucci, Jimmy Choo, Bottega Veneta and Ermenegildo Zegna, among others.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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