Phoenix Mills - Q3FY13 Results Update - IndiaNivesh

Top-line of standalone entity (i.e. the High Street Phoenix) reflects (1) ~18.0% increase in average trading density (from Rs 1,850 psf. pm in Q3FY12 to Rs 2,185 psf. pm in Q3FY13), (2) increase in HSP rental from Rs 177 psf. pm in Q3FY12 to Rs 204 psf. pm, (3) increase in mall consumption from Rs 2.6 bn in Q2FY13 to Rs 3.1 bn in Q3FY13.

The reported numbers were very much in-line with our estimates. Top-line grew by 20.1% on a year-over-year basis to Rs 693.4 mn. EBITDA margins of the company improved from 64.7% in Q2FY13 to 68.3% in Q3FY13. Improvement in the EBITDA margins got translated to better net margins too (improved from 46.6% a year ago to 49.2% in Q3FY13).

We expect higher lease rates and occupancy rates to support the growth across projects. With most of the projects having commissioned and likely to attain peak in next few quarters, we expect the strain on balance sheet to ease from FY15E onwards.

At CMP of Rs 258, PML is trading at FY13E & FY14E, EV/EBITDA multiple of 16.6x and 13.4x, respectively. After making all required adjustments (discussed above), we arrived at FY14E NAV of Rs 288 (indicating 11.6% upside to the current market price). We maintain our BUY rating on the stock.

Source : Equity Bulls

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