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Phoenix Mills (PHNX)
Property
In-line quarter, Pune market city soft-launched. PHNX reported in-line revenues
(+16% yoy) and net income (+49% yoy). PHNX has soft-launched its Pune market city
near end-June and has soft-launched its residential development at Chennai. Further
market city launched and residential launches remain key triggers. We retain our BUY
recommendation with a target price of Rs300 (unchanged) at par with our March-2013
NAV.
Steady, in-line quarter – HSP going strong
PHNX reported revenues of Rs 471 mn (+16% yoy, +1% qoq and 2% below KIE estimates) led by
steady occupancy at Palladium. EBITDA came in at Rs 331 mn (+13% yoy, +3% qoq and 3%
below KIE estimates) and PAT at Rs 272 mn (+49% yoy, flat qoq and in line with KIE estimates).
EBITDA margin expanded 166 bps qoq to 70.3% and PAT margin declined18 bps qoq to 57.9%.
Revenues seem to have stabilized as can be seen from the moderate qoq growth and will increase
with revenue share from retailers kicking in. HSP continues to see strong footfalls at 1.4 mn/month
in 1QFY12 versus 1.5 mn/month in Dec 2010 which is seasonally a strong month. The Board has
announced a dividend of Rs 1.8/share which will result in an outflow of Rs304 mn including DDT.
Pune marketcity soft-launch is the highlight of the quarter
PHNX soft-launched its market city in Pune on June 28, 2011. At present, 80 retailers have
commenced operations and several others are in various stages of fit-outs and are expected to
commence operations soon. This market city will have 1.4 mn sq. ft of retail space, 0.5 mn sq. ft
of commercial space and 0.7 mn sq. ft of parking. Phase I has 1.2 mn sq of leasable retail space,
0.26 mn sq. ft of saleable retail and commercial space. Out of the total retail leasable area of 1.2
mn sq. ft, 80% is leased at an average rate of Rs60 per sq. ft per month and 0.17 mn sq. ft out of
0.26 mn sq. ft area has been sold. As per the company press release, some residential area has
been soft launched at Chennai marketcity and initial response has been encouraging.
We retain our BUY rating; other market cities openings and residential launches are key triggers
We believe (1) reducing execution risk and revenue visibility as the three malls get operational over
the next two quarters and (2) potential residential launches (Bangalore and Chennai over FY2012E)
of at least 0.5 mn sq. ft could act as potential triggers. The company has soft-launched some
residential area in its Chennai market city and initial response has been encouraging. Key risks
include further delays in launches and an increase in cap rates with increase in interest rates.
Updates on other market cities, Shangri-la
Marketcity Bengaluru: 100 stores are in final stages of fit-outs and the company is
targeting a Sept 2011 launch. PML has concluded the agreement for increasing its stake
in Bengaluru market city to 46.4% from 37.8%.
Marketcity Kurla: Company is targeting a soft-launch in early-3QFY11.
Marketcity Chennai: PHNX has soft-launched its residential project at Marketcity Chennai
and initial response has been reported as encouraging.
Shangri-la Hotel: PHX is expecting a soft launch by December 2011 and will start
commissioning systems for the hotel over the next couple of months.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Phoenix Mills (PHNX)
Property
In-line quarter, Pune market city soft-launched. PHNX reported in-line revenues
(+16% yoy) and net income (+49% yoy). PHNX has soft-launched its Pune market city
near end-June and has soft-launched its residential development at Chennai. Further
market city launched and residential launches remain key triggers. We retain our BUY
recommendation with a target price of Rs300 (unchanged) at par with our March-2013
NAV.
Steady, in-line quarter – HSP going strong
PHNX reported revenues of Rs 471 mn (+16% yoy, +1% qoq and 2% below KIE estimates) led by
steady occupancy at Palladium. EBITDA came in at Rs 331 mn (+13% yoy, +3% qoq and 3%
below KIE estimates) and PAT at Rs 272 mn (+49% yoy, flat qoq and in line with KIE estimates).
EBITDA margin expanded 166 bps qoq to 70.3% and PAT margin declined18 bps qoq to 57.9%.
Revenues seem to have stabilized as can be seen from the moderate qoq growth and will increase
with revenue share from retailers kicking in. HSP continues to see strong footfalls at 1.4 mn/month
in 1QFY12 versus 1.5 mn/month in Dec 2010 which is seasonally a strong month. The Board has
announced a dividend of Rs 1.8/share which will result in an outflow of Rs304 mn including DDT.
Pune marketcity soft-launch is the highlight of the quarter
PHNX soft-launched its market city in Pune on June 28, 2011. At present, 80 retailers have
commenced operations and several others are in various stages of fit-outs and are expected to
commence operations soon. This market city will have 1.4 mn sq. ft of retail space, 0.5 mn sq. ft
of commercial space and 0.7 mn sq. ft of parking. Phase I has 1.2 mn sq of leasable retail space,
0.26 mn sq. ft of saleable retail and commercial space. Out of the total retail leasable area of 1.2
mn sq. ft, 80% is leased at an average rate of Rs60 per sq. ft per month and 0.17 mn sq. ft out of
0.26 mn sq. ft area has been sold. As per the company press release, some residential area has
been soft launched at Chennai marketcity and initial response has been encouraging.
We retain our BUY rating; other market cities openings and residential launches are key triggers
We believe (1) reducing execution risk and revenue visibility as the three malls get operational over
the next two quarters and (2) potential residential launches (Bangalore and Chennai over FY2012E)
of at least 0.5 mn sq. ft could act as potential triggers. The company has soft-launched some
residential area in its Chennai market city and initial response has been encouraging. Key risks
include further delays in launches and an increase in cap rates with increase in interest rates.
Updates on other market cities, Shangri-la
Marketcity Bengaluru: 100 stores are in final stages of fit-outs and the company is
targeting a Sept 2011 launch. PML has concluded the agreement for increasing its stake
in Bengaluru market city to 46.4% from 37.8%.
Marketcity Kurla: Company is targeting a soft-launch in early-3QFY11.
Marketcity Chennai: PHNX has soft-launched its residential project at Marketcity Chennai
and initial response has been reported as encouraging.
Shangri-la Hotel: PHX is expecting a soft launch by December 2011 and will start
commissioning systems for the hotel over the next couple of months.
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