Motilal Oswal’s research report on Phoenix Mills
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.
We value PHNX’s retail assets on DCF-based NAV approach, assuming a cap rate of 8.5% (HSP – 8%) and a discount rate of 13.5%. We maintain Buy with an SOTP-based TP of INR708 (upside of 21%).
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First Published on Feb 20, 2019 02:47 pm