Phoenix Mills - March 2013 Results Preview - Motilal Oswal

- HSP's rentals to be largely stable QoQ: We estimate High Street Phoenix's (HSP) 4QFY13 rentals at INR706m (largely stable QoQ), EBITDA at INR469m and PAT at INR333m, up 22%. The revenue sharing component at HSP has been rising and currently stands at ~15%.

- ARR for Shangri La Hotel at INR11k/day: Shangri La Hotel operated at ~85% occupancy on 135 rooms initially opened. With additional rooms opening up (taking the total to 190 rooms), occupancy declined to 60-65%. The management plans to open the remaining rooms by April 2013, taking the total count to 390 rooms. ARR stood at INR11k/day.

- Chennai Mall ramping up steadily: Chennai Mall has been ramping up steadily, with 170 stores currently yielding rentals (v/s 125 stores in January 2013 inauguration) of ~INR50m/month.

- Volume slowdown post price increase: After increase in prices, sales volumes at Bangalore and Chennai residential projects slowed. This is also the case for the commercial phase in Kurla, Mumbai.

- Net debt to increase marginally: We expect net debt to increase by INR200m-250m, led by construction funding in commercial and residential projects at Phase II of Market City SPVs.

- Valuation and view: The stock trades at 12.3x FY15E EPS of INR21.3, 1.7x FY15E BV, and at 21% discount to its one-year forward NAV of INR331/share. Buy.

Source : Equity Bulls

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