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Phoenix Mills (PHNX IN; Mkt Cap USD0.7b, CMP Rs.194, Buy)

Phoenix Mills Ltd's (PML) 3QFY11 results were above our estimates. Revenues were up 49.3% to Rs.451m and net profit grew by sharp 133.3% to Rs.238.

The variance in the net profit figure was mainly due to higher-than-expected other income of Rs.71m. EBITDA was up 85% YoY at Rs.327m.

PML's 49.3% YoY revenue growth in 3QFY11 can largely be attributed to (1) higher area in operation and (2) an increase in revenue share from retailers

While in the Pune Market City projects ~130 retailers have begun fit-out work, the expected operational date for the mall has been revised to March 2011.

We believe PML is a unique play on the booming domestic consumption story, without retail-specific risks. We have rolled over our NAV estimate for the company to FY13E at Rs.288. The stock trades at a P/E of 17.6x FY13E EPS (26.2x FY12E EPS) and 28% discount of FY13E NAV of Rs.288 (20% discount to FY12E NAV of Rs.258). Maintain Buy with a target price of Rs.260 (~10% discount to FY13E NAV).