ICICI Securities is bullish on The Phoenix Mills recommended buy rating on the stock with a target price of Rs 780 in its research report dated September 03, 2020.
ICICI Securities research report on The Phoenix Mills
The Phoenix Mills (PHNX) has delivered 15% consumption CAGR and 14% rental income CAGR over FY13-20 prior to COVID-19 induced mall closures across India from mid-March 2020. While FY21 will be a tough year with an estimated 50% rental income loss, the recent QIP fund raise of Rs11bn and all nine operational malls reopening in Q2FY21 are directionally positive. We expect gradual improvement from H2FY21 and expect a strong recovery with FY22E rental income of Rs11.0bn vs. Rs10.0bn in FY20. We retain our BUY rating with a revised target price of Rs780/share (earlier Rs800) factoring in the recent QIP.
Outlook
We expect PHNX to achieve a 13% rental income CAGR over FY20-25E and remain positive on PHNX’s long-term growth story as a proxy play on discretionary consumption.
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