Result Update: The Phoenix Mills Ltd (PML) - BUY - TP Rs.477 - Kotak

Revenues of the company during the quarter and full year were largely in line with our estimates and margins also stood strong on improvement in rentals across market cities. Interest expense has witnessed a decline which aided net profits. Net profit for Q4FY16 was impacted by exceptional loss related to EWDL hence net profit is not comparable with last year. Going ahead, the focus of the company will be on new investments post funding by CPPIB along with debt reduction. Renegotiation of rentals across malls, debt reduction coupled with lower interest rates is likely to aid net profit growth going forward.

We roll forward our target price on FY19 estimates and also incorporate lower capitalization yield post the commencement of inflow of funds from CPPIB. We thus arrive at a revised price target of Rs 477 on FY19 estimates (Vs Rs 424 earlier on FY18 estimates). We thus upgrade the stock to BUY from ACCUMULATE earlier.

Shares of The Phoenix Mills Ltd was last trading in BSE at Rs.411.85 as compared to the previous close of Rs. 415.15. The total number of shares traded during the day was 12363 in over 478 trades.

The stock hit an intraday high of Rs. 434 and intraday low of 410. The net turnover during the day was Rs. 5221496.

Source : Equity Bulls

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