Phoenix Mills shares almost back to pre-pandemic levels
PremiumAnalysts said that last year’s revival trends highlight the company’s ability to bounce back faster once biz normalizes
The covid-19 pandemic has had a terrible impact on the fortunes of mall developers owing to the imposition of various restrictions. Against this backdrop, The Phoenix Mills Ltd faced an extremely challenging time during the last fiscal year. However, this is hardly reflected in its share price.
Shares of Phoenix Mills touched a new 52-week high on Friday on the National Stock Exchange. They are now just 6.5% lower compared to their pre-covid highs.
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Analysts said that last year’s recovery trends highlight the company’s ability to bounce back faster once business conditions normalize. While the first half of the financial year 2021 was painful, consumption at its malls saw faster recovery from the December quarter.
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Phoenix Mills’ consolidated revenue dropped just 3% year-on-year in the March quarter. This is a meaningful improvement from the 34%, 48% and 78% year-on-year decline in revenue for the December quarter, September quarter and June quarter, respectively.
The improvement in the second half was helped by the increase in malls’ operating hours, the festive season and opening up of food and beverages outlets.
The upshot: for FY21, consumption across the firm’s malls was around 69% of FY20 levels. For the March quarter, consumption recovery stood at 90% vis-à-vis the same period in the previous year.
Unfortunately, this recovery is expected to take a hit. The resurgence of covid-19 would mean that the near-term financial performance of the company would again witness a setback owing to the pandemic-led lockdowns. Therefore, the June quarter is likely to be a tough one for the company.
The silver lining, however, is that the company is bolstering its cash position amid the pandemic. “With March 2021 liquidity of ₹1,030 crore and a potential fund infusion of ₹1,510 crore from GIC Private Equity and ₹960 crore from the Canada Pension Plan Investment Board (CPPIB), Phoenix Mills is building a war chest for growth," said analysts from ICICI Securities Ltd in a report on 3 June.
Last week, Phoenix Mills said that the company through its subsidiaries has executed definitive documents with GIC. This is for the formation of a retail-led, mixed-use platform at a pre-money enterprise value of ₹5,500 crore for specific assets.
GIC will initially get a 26.4% equity stake in these subsidiaries through a fund infusion of ₹1,110 crore.
On the balance sheet front, Phoenix Mills is in a stronger position post-covid.
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