ICICI Securities has given Buy recommendation for The Phoenix Mills recommended buy rating on the stock with a target price of Rs 1231 in its research with a target price of Rs. 1231 in its research report issued on Dec 08, 2021
ICICI Securities research report on The Phoenix Mills
As per company, The Phoenix Mills (PHNX) has clocked mall consumption of Rs6.6bn in Nov’21 which is 116% of Nov’19 levels and Rs6.7bn in Oct’21 which is 91% of Oct’19 levels. While the threat of a fresh round of Covid induced mall closures remains a risk, we expect mall rentals to revert to pre-Covid levels by Q4FY22 as consumption continues to improve. With the company having received an additional Rs7.8bn of liquidity from CPPIB in Nov’21 as the first tranche for The Rise office/retail project in Mumbai, PHNX has cumulatively raised/tied up Rs43.5bn of funding between Q2FY21-Q3FY22. With just Rs13.8bn of net debt as of Nov’21, the company’s strong balance sheet acts as a cushion against any fresh Covid induced rental losses.
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 1.2msf 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 a fresh Covid wave impacting mall consumption and fall in mall occupancies and rentals.