Consumption momentum, new assets support Phoenix Mills' stock gains

Strong consumption growth, improving occupancies and a healthy pipeline of new assets are supporting Phoenix Mills' stock, prompting brokerages to upgrade earnings estimates

The stock of retail mall developer, The Phoenix Mills, is trading near its yearly highs, riding on strong consumption growth, improving occupancies and a robust pipeline of new assets.

 

Given the better than expected performance in the September quarter, brokerages had raised their earnings estimates for the mall operator. The stock has gained about 14 per cent since the start of October and is currently trading at 44 times its FY27 earnings estimates.

 

Led by higher consumption growth, the company reported a revenue growth of 22 per cent and operating profit growth of 29 per cent in the September quarter. In the quarter, consumption rose by 14 per cent year-on-year (Y-o-Y) while the growth in the first half of financial year 2026 (H1FY26) was at 12 per cent.

 

The growth was led by Phoenix Palladium (Mumbai), Phoenix Citadel (Indore), Palladium Ahmedabad, Phoenix Mall of the Millennium (Pune) and Phoenix Mall of Asia (Bengaluru). For its Phoenix MarketCity Bangalore and Pune malls, consumption was flat Y-o-Y due to the ongoing strategic repositioning.

 

Rahul Jain and Taran Gupta of Elara Securities point out that in the retail segment, vacancies across major markets are improving quarter-on-quarter (Q-o-Q) and Y-o-Y with Mumbai Metropolitan Region leading the pack.

 

Retail consumption in Q2FY26 at mall assets of listed firms -- Phoenix Mills and Nexus Trust REIT -- rose 14 per cent Y-o-Y and 16 per cent Y-o-Y respectively.

 

Geojit Research has upgraded the stock and believes that the company's continued emphasis on premiumisation, asset efficiency, and disciplined capital deployment are expected to support robust long-term growth and value creation.

 

Therefore, it has upgraded the rating from hold to buy with a revised target price of ₹1,996

 

For Phoenix Mills, the September quarter saw the electronic and multiplex segment outperform with a Y-o-Y growth of 23 per cent each while fashion posted a growth of 17 per cent followed by jewellery growth at 12 per cent.

 

Nomura Research has raised its FY26 and FY27 earnings per share by 10 per cent and 5 per cent respectively

 

on the back of stronger-than-expected sales momentum in the company’s completed residential project and expectation of a stronger consumption growth going forward in existing malls driven by GST rate rationalisation and stronger trading densities reported in Phoenix Market City malls in Q2FY26.

 

The brokerage has raised its sum of the parts target price for the company to ₹1,450 from ₹1,350 earlier. It, however, has a reduced rating on the stock given valuation concerns, margin pressures and pace of consumption growth.

 

While new malls continue to ramp up well, Phoenix Mills is implementing measures to accelerate consumption at mature malls. These initiatives, according to Motilal Oswal Research, along with a further increase in trading occupancy, will help the company sustain healthy traction in consumption.

 

The company’s acquisition of the remaining 49 per cent stake in Island Star Mall Developers strengthens its 

high-quality retail asset portfolio, unlocking long-term value, say Abhishek Lodhiya and Yohan Batliwala of the brokerage.

 

The transaction is expected to be earnings-accretive from year one with significant upside as rental income stabilises and the 2.71 million square incremental floor space index potential is developed over the medium term.

 

The brokerage has retained a buy rating with a revised target price of ₹2,003.