MOSL: PHOENIX MILLS (Buy)-Performance in line-clear vision equals on-track execution
Phoenix Mills: Performance in line; clear vision equals on-track execution
(PHNX IN, Mkt Cap USD1.3b, CMP INR587, TP INR708, 21% Upside, Buy)
- In-line performance; PAT grows 9%: PHNX's revenues grew 6% YoY to INR4,404m (in line with our est. of INR4,409m), primarily driven by the Retail segment (+7% to INR2,899m). EBITDA margin expanded 90bp YoY to 50.5% (v/s our est. of 49.3%). EBITDA stood at INR2,225m, as against our est. of INR2,173m, up 8% YoY. We note that other comprehensive income for 9MFY19 includes realized gain of INR622m (INR182m for 3QFY19) on sale of 0.8m equity shares (0.3m for the quarter) of Graphite India. Interest expense stood at INR917m (v/s our est. of INR927m), up 4% YoY. Consequently, PAT rose 9% YoY to INR708m, higher than our est. of INR680m.
- For 9MFY19, net revenue/EBITDA/PAT grew 6%/10%/29% to INR12,583m/INR6,159m/INR1,926m. EBITDA margins expanded 150bp YoY to 49% in 9MFY19 and PAT margins expanded 270bp to 15% in 9MFY19.
- Concall highlights: (1) Expect PMC Lucknow operations to commence during 2HFY20; already leased about 60% of the leasable area. (2) Expect to receive Kessaku residential project OC in 4QFY20. (3) On-track to achieve 11-12 msf of operational retail portfolio target by FY23; it currently has 5.9msf of operational assets, under development portfolio of 4.6msf and plans to add 1-2 new assets.
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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