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Phoenix Mills Ltd
RECO : BUY TP : Rs231
Investment Rationale
§ High Street Phoenix (HSP) to generate FCF of Rs1.3bn in FY12E with marginal committed cash outflows.
Valuations of HSP at Rs 140 / share is 77% of CMP, largely mitigate downward price risk
§ All the four Market City (MC) projects will be operational in FY12 with total leasable retail space of 4.4 msf. Preleased
MOUs of more than 50% retail space across the Market City’s projects give comfort on; 1) Debt servicing
ability of the project SPVs and 2) Potential valuation upsides as occupancy picks up
§ Post completion of Market City projects and The Shangri La Hotel, focus will shift to residential projects in FY12.
Company aims to launch all the three projects in FY12E, aggregating 2.9 msf.
Valuations
§ Our SOTP NAV of Rs231 translates into 1.9x FY12E book value. Revenue visibility and improved financials justify
proximity to peak P/BV of 2.1x since mid-2008 crisis. HSP is valued at Rs.140 / share (60% of NAV), generating
maximum value for PML followed by MC at Rs. 36 / share (15% of NAV)
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Phoenix Mills Ltd
RECO : BUY TP : Rs231
Investment Rationale
§ High Street Phoenix (HSP) to generate FCF of Rs1.3bn in FY12E with marginal committed cash outflows.
Valuations of HSP at Rs 140 / share is 77% of CMP, largely mitigate downward price risk
§ All the four Market City (MC) projects will be operational in FY12 with total leasable retail space of 4.4 msf. Preleased
MOUs of more than 50% retail space across the Market City’s projects give comfort on; 1) Debt servicing
ability of the project SPVs and 2) Potential valuation upsides as occupancy picks up
§ Post completion of Market City projects and The Shangri La Hotel, focus will shift to residential projects in FY12.
Company aims to launch all the three projects in FY12E, aggregating 2.9 msf.
Valuations
§ Our SOTP NAV of Rs231 translates into 1.9x FY12E book value. Revenue visibility and improved financials justify
proximity to peak P/BV of 2.1x since mid-2008 crisis. HSP is valued at Rs.140 / share (60% of NAV), generating
maximum value for PML followed by MC at Rs. 36 / share (15% of NAV)
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