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What’s the theme?
PHNX's key project, High Street Phoenix (HSP) is now fully operational and is likely to generate rental
income of Rs2-2.2bn in FY12E. Q1FY12 saw the launch of Pune Market City (PHNX stake 58.5%). This
will strengthen the rental model of PHNX. Presently PHNX's rental revenue (FY11-Rs1,760mn) comes
from HSP and the launch of Pune Market City is likely to further add Rs500mn to top line of PHNX in
FY12E.
What will move the stock?
We see the following near-term triggers for the stock: (i) Commencement of Kurla and Bengaluru Market
City projects by Q3FY12 end. (ii) Commencement of the first phase of Shangri- La Hotel in Q3FY12.
(iii) HSP-Phase IV (at present 0.25 msf) will provide a strong delta to the company's valuation if it manages
to get hospitality FSI (5x). (v) The company may further choose to increase stake in the Bengaluru and
Chennai market city projects, which would enhance stock valuation.
Where are we stacked versus consensus?
Our EPS estimates for FY12 and FY13 are Rs14.3 and Rs15.8 respectively. Our FY12 earnings estimate
is 52% is higher than consensus estimate of Rs9.4. We have a 'BUY' recommendation on the stock with a
target price of Rs240, which discounts FY12E Gross NAV by 20%.
What will challenge our target price?
1) Slowdown in execution in Market City projects and extending free rental periods may hamper the holding
company's profitability; economic slowdown may affect revenue from Market City and HSP
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
What’s the theme?
PHNX's key project, High Street Phoenix (HSP) is now fully operational and is likely to generate rental
income of Rs2-2.2bn in FY12E. Q1FY12 saw the launch of Pune Market City (PHNX stake 58.5%). This
will strengthen the rental model of PHNX. Presently PHNX's rental revenue (FY11-Rs1,760mn) comes
from HSP and the launch of Pune Market City is likely to further add Rs500mn to top line of PHNX in
FY12E.
What will move the stock?
We see the following near-term triggers for the stock: (i) Commencement of Kurla and Bengaluru Market
City projects by Q3FY12 end. (ii) Commencement of the first phase of Shangri- La Hotel in Q3FY12.
(iii) HSP-Phase IV (at present 0.25 msf) will provide a strong delta to the company's valuation if it manages
to get hospitality FSI (5x). (v) The company may further choose to increase stake in the Bengaluru and
Chennai market city projects, which would enhance stock valuation.
Where are we stacked versus consensus?
Our EPS estimates for FY12 and FY13 are Rs14.3 and Rs15.8 respectively. Our FY12 earnings estimate
is 52% is higher than consensus estimate of Rs9.4. We have a 'BUY' recommendation on the stock with a
target price of Rs240, which discounts FY12E Gross NAV by 20%.
What will challenge our target price?
1) Slowdown in execution in Market City projects and extending free rental periods may hamper the holding
company's profitability; economic slowdown may affect revenue from Market City and HSP
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