MOSL: PHOENIX MILLS (Buy)-Beat on estimates; outlook positive
PHOENIX MILLS: Beat on estimates; outlook positive
(PHNX IN, Mkt Cap USD1.9b, CMP INR883, TP INR1015, 15% Upside, Buy)
- PHNX’s third-quarter result highlights consistency in its operational performance amidst a subdued macro environment. The traction in its key retail assets is particularly impressive.
- We find comfort in the company’s strong track record of execution/operations, scalability and robust cash generation. This, along with the affirmative guidance around consumption, reinforces our positive stance on the company. Maintain Buy.
Solid consumption growth across retail assets
- Revenue increased 16% YoY to INR5,118m (our estimate: INR4,968m) in 3QFY20. EBITDA was up 17% YoY at INR2,593m (our estimate: INR2,590m), with the margin coming in flat YoY at 50.7% (our estimate: 52.1%). Adj. PAT increased 30% YoY to INR919m (our estimate: INR769m).
- Retail revenue was up 11% YoY at INR3,218m, while Residential revenue surged 142% YoY to INR481m largely driven by revenue recognition at One Bangalore West and Kessaku. Commercial segment grew by 2% YoY to INR334m, while Hospitality revenue increased 11% YoY to INR1,085m driven by higher occupancy at St. Regis (+200bp to 84%) and better average room rent (+12% YoY to INR13,857).
- Retail consumption grew 10% YoY, largely driven by key assets like PMC, Bangalore (+14% YoY), PMC Pune (+10%) and PMC Mumbai (+10%). Category wise, growth was strong in Entertainment (+19%), Beauty & Cosmetics (+8%), Electronics (+13%), Jewelry (+15%) and F&B (+7%).
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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