Buy The Phoenix Mills: target of Rs 1231: ICICI Securities

ICICI Securities is bullish on The Phoenix Mills recommended buy rating on the stock with a target price of Rs 1231 in its research report dated September 14, 2021.

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ICICI Securities research report on The Phoenix Mills

The Phoenix Mills (PHNX) FY21 and Q1FY22 operations have been impacted by mall shutdowns across India owing to successive Covid waves. For FY21, mall consumption of Rs33.3bn was at 69% of FY20 levels while rental income of Rs5.6bn stood at 55% of FY20 levels. To tide over the intermittent Covid related disruptions, PHNX has raised ~Rs26bn of equity capital through QIP route and SPV level stake dilution between Aug’20 to Jun’21 and has access to an additional funding pool of Rs10bn. We assume a 30% LTL rental income loss for FY22E owing to expected rental waivers in H1FY22 and retain our FY23E estimates as we believe that the long-term growth story for Grade A malls in India remains intact.

Outlook

We reiterate our BUY rating with an unchanged Mar-22 SoTP based target price of Rs1,231/share which includes Phoenix Rise office and retail project of 1.3msf and retain our 10% premium to NAV considering growth opportunities from growth capital raised from GIC PE and CPPIB platform deals. Key risks to our call are an extended second Covid wave impacting mall consumption and fall in mall occupancies and rentals.

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