Active Stocks
Fri May 24 2024 15:59:27
  1. Tata Steel share price
  2. 174.80 -0.37%
  1. NTPC share price
  2. 374.85 0.68%
  1. State Bank Of India share price
  2. 828.60 -0.45%
  1. ITC share price
  2. 436.10 -1.16%
  1. Power Grid Corporation Of India share price
  2. 318.50 -0.39%
Business News/ Markets / Stock Markets/  Phoenix Mills a best play on India retail story, says JM Financial; raises target price
BackBack

Phoenix Mills a best play on India retail story, says JM Financial; raises target price

Over the past three months, The Phoenix Mills shares have appreciated over 28%, while the stock has delivered an impressive return of more than 66% during the current calendar year of 2023.

JM Financial maintained its ‘Buy’ rating on The Phoenix Mills and raised the SOTP-based target price to ₹2,520 per share from ₹2,270 earlier.Premium
JM Financial maintained its ‘Buy’ rating on The Phoenix Mills and raised the SOTP-based target price to 2,520 per share from 2,270 earlier.

The Phoenix Mills is well-positioned to capitalize on the burgeoning growth within India’s retail sector, coupled with robust rental revenue expansion emanating from its retail portfolio, analysts said.

Over the past three months, The Phoenix Mills shares have appreciated over 28%, while the stock has delivered an impressive return of more than 66% during the current calendar year of 2023. Analysts believe the The Phoenix Mills share price holds considerable potential for further substantial upside.

JM Financial maintained its ‘Buy’ rating on the stock and raised the SOTP-based target price to 2,520 per share from 2,270 earlier.

Also Read: Sterling and Wilson share price jumps 5% to hit 52-week high on raising 1,500 crore via QIP

India’s retail industry is expected to grow at a FY22-27E CAGR of 14% to 120.59 trillion. Phoenix Mills has a presence in 5 of the top 8 cities and is well-placed to benefit from the underlying growth in the retail industry. 

The brokerage expects its rental revenue from the retail portfolio to grow at 30% CAGR over FY23-26E. 

“We ascribe a 20% premium to the Retail segment March 2025E NAV as the small portfolio is expected to deliver a higher earnings growth compared to its tenant base (majorly consisting of discretionary consumer companies)," JM Financial said.

(Exciting news! Mint is now on WhatsApp Channels :rocket: Subscribe today by clicking the link and stay updated with the latest financial insights! Click here!)

JM Financial compared Phoenix Mills with a sample comprising its tenants on three parameters and found that the company stands out on earnings growth and margin profile. However, as with all real estate development companies, the company’s returns are at the lower end. This is primarily because of a sizable amount of capital being employed in land bank or development assets.

Additionally, its unique portfolio of brands is the best proxy to play across the entire spectrum of the discretionary wallet spends of an average Indian consumer, it said. 

Meanwhile, key risks include the potential delay in stabilisation of malls, a delay in the commissioning of new malls, and threat of OTT platforms and e-commerce, according to the brokerage firm.

Also Read: PNB market cap surpasses 1 lakh crore; third PSU bank to achieve feat

During the quarter ended September 2023, The Phoenix Mills’ net profit grew 36.92% to 303.82 crore from 221.89 crore in the same period last fiscal. 

The company’s net consolidated total income in Q2FY24 was at 906.64 crore, registering a growth of 32.65% from 683.49 crore in the similar quarter last year.

At 11:40 am, The Phoenix Mills shares were trading 0.34% lower at 2,350.50 apiece on the BSE.

Catch Live Market Updates here

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.

You are on Mint! India's #1 news destination (Source: Press Gazette). To learn more about our business coverage and market insights Click Here!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 15 Dec 2023, 11:41 AM IST
Next Story footLogo
Recommended For You
GENIE RECOMMENDS

Get the best recommendations on Stocks, Mutual Funds and more based on your Risk profile!

Let’s get started