Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Phoenix Mills (PHNX)
Property
Stable quarter. PHNX reported revenues of Rs474 mn (+7% yoy) and EBITDA of Rs333
mn (+5% yoy) which were as per our expectation. PHNX launched its Bengaluru market
city in October 2011 and has guided for Kurla launch in November 2011. Further
market city launches 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.
Revenues and EBITDA as per expectation
Phoenix declared revenues of Rs474 mn (+7% yoy, +1% qoq) and EBITDA of Rs333 mn (+5% yoy,
+1% qoq) which were both 2% below expectation. EBITDA margin seems to have stabilized now
in 70-72% as Palladium gets stabilized which can also be seen in the modest qoq growth.
Incremental growth will now be driven by the new market cities and residential launches. PAT
came in at Rs239 mn (+8% yoy, -12% qoq) and was 10% below our expectation due to higherthan-
expected interest cost as the company took on additional debt during the quarter because of
which gross debt (standalone) has gone up to Rs2.4 bn versus Rs0.4 bn at end-FY2011.
Bengaluru market-city launched in October 2011
The Phoenix market city in Bengaluru will have a total built-up area of 1.9 mn sq. ft of which 0.85
mn sq. ft will be under retail, 0.65 mn sq. ft will be residential (phase 2 of development) and 0.4
mn sq. ft will be under commercial/hotel. Current occupancy is around 20-25% (112 stores) and
the mall is seeing footfalls of 15,000 on weekdays and 25,000 on weekends.
As per 2QFY12 update, 70-75% of the mall has been committed for lease/ leased out at an
average rate of Rs 60-65/sq. ft./month (Rs 45/sq. ft/month for anchor investors). The anchor
tenants for the mall are – Pantaloons, Marks and Spencer, Reliance Trendz, PVR, Blue O, Big
Bazaar, Home Town, Max, Pantaloons, Reliance Digital, Reliance Timeout and Zara.
We retain our BUY rating; Kurla and Chennai market-city and residential launches are key triggers
Phoenix has now launched two market cities in FY2012 (Pune and Bengaluru) which gives
justification to our view that though project launches from this point could get delayed, they will
not get stalled. Pune Bengaluru launch also adds visibility to our valuation for PHNX’s stakes in
non-Mumbai market cities. We believe (1) reducing execution risk and revenue visibility as the two
malls get operational over the next two quarters and (2) residential launches (Bangalore and
Chennai likely over FY2012E) of at least 0.5 mn sq. ft could act as potential triggers. Key risks
include further delays in launches and an increase in cap rates with increase in interest rates.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Phoenix Mills (PHNX)
Property
Stable quarter. PHNX reported revenues of Rs474 mn (+7% yoy) and EBITDA of Rs333
mn (+5% yoy) which were as per our expectation. PHNX launched its Bengaluru market
city in October 2011 and has guided for Kurla launch in November 2011. Further
market city launches 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.
Revenues and EBITDA as per expectation
Phoenix declared revenues of Rs474 mn (+7% yoy, +1% qoq) and EBITDA of Rs333 mn (+5% yoy,
+1% qoq) which were both 2% below expectation. EBITDA margin seems to have stabilized now
in 70-72% as Palladium gets stabilized which can also be seen in the modest qoq growth.
Incremental growth will now be driven by the new market cities and residential launches. PAT
came in at Rs239 mn (+8% yoy, -12% qoq) and was 10% below our expectation due to higherthan-
expected interest cost as the company took on additional debt during the quarter because of
which gross debt (standalone) has gone up to Rs2.4 bn versus Rs0.4 bn at end-FY2011.
Bengaluru market-city launched in October 2011
The Phoenix market city in Bengaluru will have a total built-up area of 1.9 mn sq. ft of which 0.85
mn sq. ft will be under retail, 0.65 mn sq. ft will be residential (phase 2 of development) and 0.4
mn sq. ft will be under commercial/hotel. Current occupancy is around 20-25% (112 stores) and
the mall is seeing footfalls of 15,000 on weekdays and 25,000 on weekends.
As per 2QFY12 update, 70-75% of the mall has been committed for lease/ leased out at an
average rate of Rs 60-65/sq. ft./month (Rs 45/sq. ft/month for anchor investors). The anchor
tenants for the mall are – Pantaloons, Marks and Spencer, Reliance Trendz, PVR, Blue O, Big
Bazaar, Home Town, Max, Pantaloons, Reliance Digital, Reliance Timeout and Zara.
We retain our BUY rating; Kurla and Chennai market-city and residential launches are key triggers
Phoenix has now launched two market cities in FY2012 (Pune and Bengaluru) which gives
justification to our view that though project launches from this point could get delayed, they will
not get stalled. Pune Bengaluru launch also adds visibility to our valuation for PHNX’s stakes in
non-Mumbai market cities. We believe (1) reducing execution risk and revenue visibility as the two
malls get operational over the next two quarters and (2) residential launches (Bangalore and
Chennai likely over FY2012E) of at least 0.5 mn sq. ft could act as potential triggers. Key risks
include further delays in launches and an increase in cap rates with increase in interest rates.
No comments:
Post a Comment