"Unexciting" consumption growth keeps Nomura bearish on Phoenix Mills

The brokerage gave a target of ₹1,350 per share, implying 15.3 per cent downside from Friday's close at ₹1,595.1 per share. The brokerage also sees the stock as "expensive" given current valuations

Nomura has reiterated its ‘Reduce’ rating on Phoenix Mills stock, after the company released its Q2FY26 business update on Friday, after market hours. The brokerage cited the company's consumption growth as “unexciting” and flagged that its retail income growth would be slower than the consumption growth in Q2FY26F, due to the tenant churn exercise. 

 

The brokerage maintained a target of ₹1,350 per share, implying 15.3 per cent downside from Friday’s close at ₹1,595.1 per share. It also sees the stock as “expensive” given current valuations. 

 

“The stock currently trades at 23x FY27F, which we believe is expensive considering Earnings before interest, tax, depreciation and amortisation (Ebitda) compound annual growth rate (CAGR) of 15 per cent between FY25-FY28F (against 43 per cent CAGR between FY22-FY25). Pre-COVID, the company used to trade at 10-17x during its stable growth phase,” Nomura said. 

 

 

At 9:18 AM, Phoenix Mills’ share price was trading 0.29 per cent higher at ₹1,599.8 per share on BSE. In comparison, the BSE Sensex was down 0.35 per cent at 82,210.70.   CATCH STOCK MARKET LIVE UPDATES TODAY

Phoenix Mills Q2 business update 

Retail consumption: 

• Q2FY26 consumption growth came in at 13 per cent year-on-year (Y-o-Y). For the first-half, the consumption growth came in at 12 per cent Y-o-Y, which was in line with Nomura’s estimate of FY26F consumption growth of 11 per cent Y-o-Y.
• Further, consumption growth during the quarter was led by Phoenix Palladium (Mumbai), Phoenix Citadel (Indore), Palladium Ahmedabad, Phoenix Mall of the Millennium (Pune), and Phoenix Mall of Asia (Bengaluru). 
• Phoenix MarketCity Bangalore and Pune are undergoing strategic repositioning. Consumption was flat Y-o-Y for them due to this transition; however, as per management, trading densities grew in double digits.

Nomura believes consumption growth could be slower in H2FY26F (than H1FY26F) due to the higher base, while visibility on retail income growth bottoming out remains low. Management maintains the view that the difference between consumption growth and retail income growth will continue to narrow.

Commercial office:

• Gross leasing of .7msf was completed during H1FY26 across its offices in Mumbai, Pune, Bengaluru, and Chennai.
• Occupancy in the operational assets at Mumbai and Viman Nagar in Pune stood at 76 per cent in September 2025, as compared to 67 per cent in March 2025.
• Completion Certificate for One National Park (Chennai) was achieved in August 2025, for Tower 3 of Millennium Towers (Pune) in March 2025 and for Phoenix Asia Towers (Bengaluru) in January 2025.

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Hospitality:

Occupancy at 85 per cent, as compared to 85 per cent in Q2FY25. Average room rate (ARR)at ₹17,711, up 2 per cent, as compared to Q2FY25. ARR  was flattish mainly because of Q2FY25’s high base driven by a one-off event.

Residential:

• Q2FY26 pre-sales: ₹139 crore, as compared to ₹2,700 crore in Q2FY25.
• Q2FY26 collections: ₹115 crore, as against ₹600 crore in Q2FY25.