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Revenues in line with expectations; higher other income boosts PAT
The Phoenix Mills (PML) reported standalone Q4FY11 revenues of INR 468 mn, in
line with our estimate of INR 465 mn. Reported PAT, at INR 272 mn, was higher
than our estimate of INR 245 mn due to above estimated other income on
account of a one-time arbitrage sale of TDR for ~INR 90 mn. High Street
Phoenix (HSP) earned average gross rentals of ~INR 155/sf/month across the
retail/commercial space in FY11. New stores opened during the quarter include
Timberland, California Pizza Kitchen, Paul & Shark, Aldo, Canon, and Remanika.
Rental re-negotiations at HSP on track
During the quarter, partial re-negotiation of rentals has begun for ~0.15 msf of
anchor space at HSP. Accordingly, rentals for Big Bazaar, one of the anchors
occupying 50,000 sft have been re-negotiated at a minimum guarantee of INR
90/sft (INR 65/sf earlier) or revenue share of ~7%. Also, another ~18,000 sft of
space has been taken over by PML with the space expected to be leased at
rentals of INR 200+/sf; re-negotiation for the balance anchor space of 82,000 sft
is expected to be completed in FY12.
Pune and Kurla malls to operationalise in H1FY12
PML expects the Pune mall to commence operations in June 2011 and Kurla mall
in Q2FY12, in line with our expectations. Also, the Bengaluru (E) and Chennai
market cities are expected to become operational by Q3FY12 (our assumption is
Q4FY12 for Bengaluru (E) and Q1FY13 for Chennai). During the quarter, PML
increased its stake in the Bengaluru (E) project SPV from 32.7% to 37.8% for a
consideration of ~INR 100 mn.
Outlook and valuations: Maintain ‘BUY’
With the Pune and Kurla Market City malls set to become operational H1FY12,
PML’s total operational retail area is poised to grow from 0.9 msf as of March
2011 to ~3.4 msf, with PML’s economic interest at ~2 msf. Additional positives
for PML are completion of rental re-negotiations at HSP for ~0.15 msf in FY12
and Shangri-La hotel becoming operational in FY12. Adjusting for increased
stake in Bengaluru (E) Market City project and balance sheet adjustments, we
arrive at a FY12 NAV of INR 259/share. We reiterate ‘BUY/Sector Performer’
recommendation/rating on the stock.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Revenues in line with expectations; higher other income boosts PAT
The Phoenix Mills (PML) reported standalone Q4FY11 revenues of INR 468 mn, in
line with our estimate of INR 465 mn. Reported PAT, at INR 272 mn, was higher
than our estimate of INR 245 mn due to above estimated other income on
account of a one-time arbitrage sale of TDR for ~INR 90 mn. High Street
Phoenix (HSP) earned average gross rentals of ~INR 155/sf/month across the
retail/commercial space in FY11. New stores opened during the quarter include
Timberland, California Pizza Kitchen, Paul & Shark, Aldo, Canon, and Remanika.
Rental re-negotiations at HSP on track
During the quarter, partial re-negotiation of rentals has begun for ~0.15 msf of
anchor space at HSP. Accordingly, rentals for Big Bazaar, one of the anchors
occupying 50,000 sft have been re-negotiated at a minimum guarantee of INR
90/sft (INR 65/sf earlier) or revenue share of ~7%. Also, another ~18,000 sft of
space has been taken over by PML with the space expected to be leased at
rentals of INR 200+/sf; re-negotiation for the balance anchor space of 82,000 sft
is expected to be completed in FY12.
Pune and Kurla malls to operationalise in H1FY12
PML expects the Pune mall to commence operations in June 2011 and Kurla mall
in Q2FY12, in line with our expectations. Also, the Bengaluru (E) and Chennai
market cities are expected to become operational by Q3FY12 (our assumption is
Q4FY12 for Bengaluru (E) and Q1FY13 for Chennai). During the quarter, PML
increased its stake in the Bengaluru (E) project SPV from 32.7% to 37.8% for a
consideration of ~INR 100 mn.
Outlook and valuations: Maintain ‘BUY’
With the Pune and Kurla Market City malls set to become operational H1FY12,
PML’s total operational retail area is poised to grow from 0.9 msf as of March
2011 to ~3.4 msf, with PML’s economic interest at ~2 msf. Additional positives
for PML are completion of rental re-negotiations at HSP for ~0.15 msf in FY12
and Shangri-La hotel becoming operational in FY12. Adjusting for increased
stake in Bengaluru (E) Market City project and balance sheet adjustments, we
arrive at a FY12 NAV of INR 259/share. We reiterate ‘BUY/Sector Performer’
recommendation/rating on the stock.
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