Phoenix Mills: Carving a niche by tapping the untapped

Phoenix Mills

Initiating Coverage | Sector: Real Estate

Phoenix Mills

BSE Sensex

34,395

S&P CNX

10,549

CMP: INR606

TP: INR732 (+21%)

Buy

Stock Info

Bloomberg

Equity Shares (m)

52-Week Range (INR)

1, 6, 12 Rel. Per (%)

M.Cap. (INR b)

M.Cap. (USD b)

Avg. Val, INRm

Free float (%)

PHNX IN

153.1

717 / 385

-6/-1/27

92.2

1.4

76.0

37.2

Phoenix Mills (PHNX) has an operational history of more than 100 years. A textile

manufacturer at inception, the company has reinvented itself as a retail-led mixed-use

mall developer. Its diversified portfolio of businesses comprises: (a) Retail mall

development (enjoys a leadership position in cities where it operates) and (b)

Hospitality, Residential and Commercial (together contributed 35% of revenue as of

FY17).

The Specialist

Carving a niche by tapping the untapped

PHNX – a pioneer in developing and operating malls – has become a partner of

choice for retailers in India due to its impressive track record of consumption-led

growth and strong portfolio of eight malls (6msf) spread across the top cities in

India. This apart, the company specializes in mall management, an area where its

competitors lag. Thus, we believe that it offers a unique opportunity for any

retailer (both domestic and global) looking to expand rapidly in India. All this

makes PHNX a ‘specialist’ play on India’s promising consumption growth story, in

our view.



CPPIB has recently infused equity capital of INR16.6b (in tranches) in its subsidiary,

Island Star Developers, and with leverage of 1:1, it will create a war chest of

INR32b, gearing up the company for the next leg of growth. PHNX plans to acquire

and build up to four new malls.



We expect PHNX to generate cash flows from operations of INR23.8b over FY18-20.

These cash flows can be deployed toward (i) acquiring ready/under-construction

mall, (ii) unlocking development potential of 4.6msf in its existing land parcels and

(iii) reducing debt.



We expect PHNX to record a CAGR (FY18-20) of 15% in revenue, 16% in EBITDA and

37% in PAT. We value the company’s retail assets assuming a cap rate of 8%. We

initiate coverage on PHNX with a Buy rating and an SOTP-based target price of

INR732 (upside 21%).



Financial Snapshot (INR b)

Y/E Mar

FY18E FY19E

Sales

EBITDA

EPS (INR)

EPS Gr. (%)

BV/Sh. (INR)

RoE (%)

RoCE (%)

P/E (x)

P/BV (x)

16.2

7.7

2.2

14.1

28.4

187.5

8.5

6.6

43.0

3.2

18.9

9.2

3.2

20.9

48.1

236.9

9.8

7.4

29.0

2.6

FY20E

21.3

10.5

4.0

26.3

26.2

260.6

10.6

8.1

23.0

2.3

Shareholding pattern (%)

As On

Dec-17 Sep-17 Dec-16

Promoter

62.8

62.9

DII

2.8

2.2

3.3

FII

29.8

30.1

30.0

Others

4.6

4.8

3.9

FII Includes depository receipts

A partner of choice for retailers in India

PHNX is one of the leading mall developers and operators in India, with presence

across six cities (~6msf of retail space). The company’s flagship High Street

Phoenix Mall – which commenced operations in 1999 in Mumbai – has

increased rental income at a 12% CAGR over FY13-17. Importantly, the company

has been able to replicate this success in other major cities of India. Uniquely,

PHNX participates over the entire lifecycle of malls (with specialization in mall

management), which has helped it deliver robust consumption-led retail

revenue CAGR of 16%, from INR4.2b in FY13 to INR7.7b in FY17. The company’s

success in the mall business can largely be ascribed to its expertise in acquisition

of attractive land parcels, mall design, tenant mix, identification of consumer

trends, and data analytics. Thus, we believe that PHNX offers a unique

opportunity for any retailer to expand rapidly in India. We expect retail leasing

income to grow at a CAGR of 15% over FY17-20, post which growth is likely to be

driven by the launch of new malls under the CPPIB platform.

Phoenix Mills

The Specialist

Chintan Modi

Chintan.Modi@motilaloswal.com

Please click here for Video Link

18 April 2018

Phoenix Mills

Stock Performance (1-year)

CPPIB deal – preparing for the next leg of growth

CPPIB recently infused equity capital of INR16.6b (in tranches) in the company’s

subsidiary, Island Star Developers (for a 49% stake), which houses its Bangalore mall.

CPPIB has infused capital by valuing its Bangalore mall at a 6.25% cap rate. With

leverage of 1:1, Island Star will have a robust war chest of INR32b, through which it

plans to acquire and build up to four new malls (recently acquired a land parcel in

Pune with 1.8msf of development potential). Additionally, CPPIB will provide fees

for mall management, project management and lease renewals, ensuring consistent

cash inflows. All this should strengthen PHNX’s position in India’s malls segment.

Expect strong cash flows from operations going forward

With the next leg of growth being fully funded via the CPPIB deal and also minority

buyouts now complete, PHNX’s existing mall and commercial properties are

expected to generate strong free cash flows. Over the last four years, PHNX has

spent INR13.3b toward acquiring minority stakes in its subsidiaries, which operate

various malls. Additionally, its residential projects of 3.3msf have already garnered

an amount equal to its estimated total cost of projects. Therefore, unsold stock and

pending collections should help generate strong cash flows. We expect PHNX to

generate cash flow from operations of INR23.8b over FY18-20, which can be

deployed toward (i) acquiring ready/under-construction malls, (ii) unlocking

development potential of 4.6msf in its existing land parcels and (iii) reducing debt.

PAT to grow at 37% CAGR to INR4b over FY18-20

We expect PHNX to deliver revenue CAGR (FY18-20) of 15% to INR21.3b, mainly

driven by retail segment revenue CAGR of 12% to INR13.3b, contributing 62% of

total revenue in FY20. Growth in retail is largely attributed to (i) upcoming renewals

across malls and (b) scale-up in commercial assets. We expect EBITDA CAGR of 16%

and PAT CAGR of 37% over FY18-20. PAT is expected to grow at a faster pace, mainly

due to a decline in interest cost from INR3.6b in FY18 to INR3b in FY20. Growth over

the next two years is expected to be driven by the sweating of existing assets.

Growth from the Pune mall (under CPPIB deal) will commence from FY22.

Initiating with a Buy

We see huge growth opportunity in India’s retail industry, which is expected to

reach a size of USD2t by 2020, growing at a CAGR of 12%. We believe that PHNX is a

unique way to play India’s retail growth story. Moreover, clarifications and issues

surrounding REITs are now behind, and we expect India to attract strong inflows,

where PHNX can become a great choice. We prefer PHNX due to its a) strong

operational performance (which provides a competitive edge), b) scalability

(through the CPPIB deal), and c) robust cash generation (leading to a reduction in

gearing and providing opportunities to acquire new malls). The stock trades at a PE

of 29x/23x FY19/20E, P/BV of 2.6x/2.3x FY19/20E and EV/EBITDA of 13.7x/11.4x

respectively. We value retail assets based on NAV approach, assuming a cap rate of

8% and a discount rate of 13%. We initiate coverage on PHNX with a

Buy

rating and

an SOTP-based target price of INR732 (upside 21%).

18 April 2018

Phoenix Mills

Potential changes in regulations pose a key risk to our thesis

Recent issues related to the Kamla Mills fire have raised a concern about fire &

safety at public places. However, our interaction with management suggests that

company already has processes in place to ensure that it is compliant with fire &

safety and other regulatory (local authority approvals) norms. For example:



PHNX gets third- party fire & safety audits done for every mall – this is reviewed

on a regular basis by the board as well as Managing Director Mr Atul Ruia.



PHNX houses large MNC retailers like Zara, GAP and H&M, which themselves

have strict due diligence processes in place to ensure compliance with the global

standards.

Despite this, we believe that food & beverages (F&B) outlets – due to their nature of

operations – are still to some extent exposed to fire & safety risks. F&B occupies

~12% mall space across PHNX malls. However, we do not rule out potential systemic

risk.

18 April 2018

Phoenix Mills

Company overview

PHNX began operations as a textile manufacturing company in 1905 on 17 acres of

land in Lower Parel (Mumbai). However, in 1987, PHNX largely exited the textile

sector, and entered into Mumbai’s real estate market with the development of the

High Street Phoenix (HSP) center in 1999 on its textile mill property in Lower Parel.

HSP was the first consumption center developed by the Phoenix Group in India.

PHNX now has retail-led developments across India, and has also included

hospitality, commercial and residential assets in its portfolio. Besides, the company

has forayed into food & beverages with its brands 212, Shizu San and Bar Bar

through its nine stores. PHNX now has a rental asset portfolio of ~6msf, comprising

eight malls spread across six gateway cities.

PHNX’s existing real estate development portfolio primarily comprises retail-led,

mixed-use developments at prime locations, along with a number of other

standalone residential/commercial developments. PHNX has presence across

Mumbai, Chennai, Bengaluru, Pune, Lucknow, Bareilly and Agra. The company’s

operations typically encompass most functions of real estate development – from

land acquisition, planning (including liaison and approvals), execution and marketing

of projects, to management, maintenance and sales of the completed projects.

Exhibit 1: PHNX’s evolution into retail mall developer

1999-2005

• Evolution of

HSP from an

entertainment

and gaming hub

to a shopping

and

entertainment

destination

• Foundation

stone for the

concept of

creating urban

consumption

hubs

2006-2012

• Large, city-

centric land

parcels

acquired for

creating

integrated,

retail-led mixed

use destination

• In Phase I of

development,

operationalized

Phoenix

MarketCity

malls in Pune,

Bangalore,

Mumbai and

Chennai

2013-2017

• Focused on

establishing

MarketCity

malls as market

leaders in the

respective cities

• Operationalized

asset classes of

residential,

commercial &

hospitality as

complements

to existing retail

developments

• Progressively

consolidated

equity stakes

across assets

Future

• Aim to double

retail portfolio

to 12msf from

the current

6msf

• Established

strategic

platform with

CPPIB for retail-

led, mixed use

developments

in India

• First land

purchased with

CPPIB in Pune

with

developable

area of 1.8msf

for INR2.3b

Source: Company, MOSL

PHNX has developed its asset portfolio primarily through joint ventures with strategic

investors/regional developers to support growth of its asset-heavy malls. Historically,

PHNX has also bought minority stakes in SPVs. The company has raised INR16.6b (in

tranches) from CPPIB through equity infusion for a 49% stake in its Bengaluru SPV to

fund brownfield/greenfield growth opportunities in the retail space. PHNX’s strategy is

to operate retail malls in city center locations, where it commands a leadership

position.

18 April 2018

Phoenix Mills

Exhibit 2: Retail income contributes 65% of PHNX’s total revenue (FY17)

Commercial, 4%

Hospitality, 17%

Residential, 13%

Retail, 65%

Source: Company, MOSL

Exhibit 3: PHNX’s portfolio of assets in key gateway cities

Source: Company, MOSL

18 April 2018

Phoenix Mills

Exhibit 4: Key performance indicators of PHNX’s malls

HSP & Palladium

Mumbai

Leasable Area (msf)

0.74

Total No. of Stores

269

Average Rentals (INRpsf) *

313

Trading Occupancy (%) *

92%

Leased Occupancy (%) **

96%

Bangalore

0.99

296

104

92%

97%

Phoenix Market City

Chennai

Mumbai

1.11

261

317

125

94%

89%

99%

93%

Pune

1.19

341

102

91%

96%

Phoenix United

Bareilly

Lucknow

0.31

0.33

147

128

81%

83%

91%

Palladium

Chennai

0.22

Opening in

4QFY18

Source: Company, MOSL

*Average for quarter ended March 2017 **As on March 2017; Trading Occupancy refers to mall space occupied by operating tenants ; Leased

Occupancy shall also include mall space occupied by tenants which are under fit outs

Exhibit 5: PHNX’s portfolio of assets

The Phoenix

Mills Ltd

Malls

Commercial

Lease

Hotel

Residential

Bangalore

Chennai

HSP & Palladium,

Mumbai

0.74msf (100%)

Phoenix United

0.64msf

Pune

The St. Regis,

Mumbai

395 keys (73%)

Courtyard by

Marriot, Agra

193 keys (80%)

One Bangalore

West

2.2msf (80%)

Phoenix Market

City

Pune

1.19msf

(100%)

Bangalore

0.99msf

(51%)

Mumbai

1.11msf

(100%)

Chennai

1msf (50%)

Crest

A, B & C - 0.47msf

(50%)

D - 0.41msf (29%)

Mumbai

Lucknow

0.33msf (100%)

Phoenix Paragon

Plaza

0.42msf (67%)

Fountain Head

0.2msf (75%)*

Bareilly

0.31msf (100%)

Kessaku

Art Guild House

0.55msf (100%)

0.99msf (80%)

Phoenix House

0.14msf (100%)

Palladium,

Chennai

0.22msf (29%)

Centrium

0.10msf (100%)

Wakad, Pune

1msf (51%)*

*Under construction

Source: Company, MOSL

18 April 2018

Phoenix Mills

Real estate-backed retail play

With ~6msf of mall area, PHNX is India’s largest mall developer



PHNX is one of the leading mall developers and operators in India, with presence

across six cities (6msf of retail space). The company’s flagship ‘High Street Phoenix

Mall’ in Mumbai has grown its rental income by 12% CAGR over FY13-17 to INR2.8b,

and importantly, the company has been able to replicate this success in other major

cities of India.

Uniquely, PHNX participates over the entire lifecycle of malls (with specialization in

mall management), which has helped it deliver robust consumption-led retail revenue

CAGR of 16%, from INR4.2b in FY13 to INR7.7b in FY17.

The company’s success in the mall business can largely be ascribed to its expertise in

acquiring attractive land parcels, mall design, tenant mix, identification of consumer

trends, and data intelligence.

Thus, we believe PHNX offers a unique opportunity for any retailer to expand rapidly

in India, making it a partner of choice. We expect retail leasing income to grow at

CAGR of 15% over FY17-20E, post which growth is likely to be driven by the launch of

new malls under the CPPIB platform.

PHNX - largest mall operator in India

PHNX is one of India’s leading developers, owners and operators of retail assets. It

also holds one of the largest retail portfolios among listed companies in India, with

eight retail properties (~2,000 stores) across many large cities. PHNX has eight malls

in six gateway cities in India. Consumption at its malls has increased at a CAGR of

22% to INR58b over FY13-17. Additionally, the company is coming up with a new

mall in Wakad (Pune) by FY22, with 1msf of leasable area.

Exhibit 6: PHNX’s mall portfolio is spread across 6.89msf (incl. upcoming)

Malls

HSP & Palladium Mall, Mumbai

PMC, Mumbai

PMC, Pune

PMC, Bangalore

PMC, Chennai

Phoenix United, Lucknow

Phoenix United, Bareilly

Palladium, Chennai

Pune Wakad Mall (Upcoming)

Total

PHNX's share

100%

51%

50%

100%

29%

51%

Area (msf)

0.74

1.11

1.19

0.99

1.00

0.33

0.31

0.22

1.00

6.89

Source: Company, MOSL

18 April 2018

Phoenix Mills

Exhibit 7: Consumption grew at CAGR of 22% over FY13-17

Consumption (INRb)

57%

Growth (%)

Exhibit 8: Rental income grew in line with consumption…

Rental Income (INRb)

Rental Income as a % of Consumption (%)

54.0

22%

10%

25.7

FY13

40.3

FY14

49.0

FY15

FY16

57.8

16%

14%

13%

4.2

FY17

FY13

5.7

FY14

6.5

FY15

7.1

FY16

7.7

FY17

Source: Company, MOSL

High Street Phoenix (HSP) - PHNX’s flagship mall depicts management’s

mall management capabilities

HSP was among the first developments in India to combine retail & entertainment,

commercial, hotel and residential properties into an integrated lifestyle destination.

HSP’s performance has been impressive, and the company is using its market

expertise and brand name to replicate the success of HSP in other parts of Mumbai

as well as other cities in India (via its Phoenix Market City, Phoenix United,

residential, commercial and hospitality projects).

As a result of rapid development and its central location between South Mumbai

and suburbs, Lower Parel emerged as a viable alternative to the South Mumbai

business district for commercial and retail purposes. High Street Phoenix Mall,

Palladium Mall, St. Regis Hotel and Phoenix Tower residential apartments are

located on the 17 acre land parcel in Lower Parel. There are over 270 stores at High

Street Phoenix and Palladium which are divided among distinct areas: Skyzone,

Grand Galleria, Grand Galleria Annexe, Courtyard and Palladium. These areas were

developed and operationalized in phases over a period of time, with the final retail

space (Palladium) commencing operations in 2009.

Exhibit 9: HSP mall trading density grew at a 16% CAGR over 2010-17

4000

3200

2400

1600

800

HSP (2010)

500

1000

1500

2000

2500

3000

3500

Source: Company, MOSL

*Trading density refers to sales psf pm

Trading Density (INRpsfpm)

Bubble size represents consumption

HSP (2017)

18 April 2018

Phoenix Mills

HSP & Palladium Mall, Mumbai has exhibited a strong track record

Exhibit 10: Rentals have grown in line with consumption

Consumption (INRb)

Rental Income (INRb)

16.3

15.4

2.8

2.6

2.3

2.0

FY14

FY15

FY16

FY17

FY13

FY14

FY15

FY16

FY17

Exhibit 11: Footfall nearly doubled over FY13-17

Footfalls (mn)

14.4

13.2

11.7

1.8

FY13

*Consumption = Revenue of tenants

Source: Company, MOSL

Exhibit 12: Occupancy level over FY13-17

Occupancy (%)

Big Bazar was under

replacement by H&M

Exhibit 13: Rentals psf grew at 12% CAGR over FY13-17

Rental rates (INR/sf)

221

252

289

311

195

FY13

FY14

FY15

FY16

FY17

FY13

FY14

FY15

FY16

FY17

Source: Company, MOSL

PHNX - a direct entry point for retailers to access key markets across India



With its malls located across India, PHNX acts as a key partner for retailers

planning to enter/expand presence in India. The company’s standing as a large

pan-India mall operator makes it a preferred destination of choice for any

premium domestic or global brand looking for a multi-city entry strategy.

Association with a name like PHNX enables such brands to enter multiple key

consumption centers of Mumbai, Pune, Bengaluru and Chennai. PHNX gives

them the opportunity to capture discerning customers at a scale impossible for

other retail centers to match.

Retailers’ confidence on PHNX is evident from the company’s longstanding

relationships with several domestic and global retail brands such as Zara, Diesel,

Lifestyle and PVR Cinemas. Such relationships may help PHNX to secure retail

clients for its new developments (especially for large spaces) at suitable rates.

An anchor retailer typically occupies 45-50% of the mall space.

PHNX’s mall operations and management team’s focus on increasing consumer

spend by employing several marketing and promotional initiatives. We believe

such steps ensure (i) higher footfalls in targeted categories and (ii) increased per

capita spend.

In our view, PHNX should be able to leverage the long-standing presence in this

market segment and maximize the potential of a particular catchment area by

bringing together appropriate retail clients.

18 April 2018

Phoenix Mills

Lease agreements include variable components linked to retailer

performance

PHNX regularly evaluates the retail client mix at its properties to ensure that it

caters to the consumption and spending patterns of customers.

A majority of the

leases across its retail properties are structured in a way that PHNX receives the

higher of fixed guaranteed license fee/rental income, as applicable, or a

percentage of revenue generated by the retail client, with such fixed guaranteed

license fee/rental rate generally increasing on a percentage basis annually with a

further higher percentage increase after, for example, three to five years. This

assures the company of minimum guaranteed license fees/rental income, as

applicable, across its retail properties, while aligning the company’s interest with

that of retail clients through revenue share arrangements.

With this model, PHNX’s

license fees and rental income collected, as applicable, can rise in tandem with

consumption.

Exhibit 14: Revenue cycle of mall; generally minimum lease guarantee escalates by 15-18%

at the end of 3 year and 5-7% annually

Increase in Minimum Lease Payment (MLP) on

account of renegotiation of contracts shall

lead to higher jump in MLP

Source: Company, MOSL

Exhibit 15: Pune Wakad land with 1.8msf of development potential

Particulars

PMC Wakad Mall Leasable Area (msf)

Land Cost and TDR (INR m) (Proportionate)

Project cost (including construction cost) (INR m)

Total Cost of Mall (INR m)

1,667

4,500

6,167

Source: MOSL

18 April 2018

Phoenix Mills

Exhibit 16: Pune Wakad is expected to make an IRR of 21%

Particulars

Land cost (INR m)

Project cost (INR m)

Total Outflow (INR m)

Occupancy (%)

Lease Rent (INR psfpm) (Growth @ 8%)

Lease Rent (INR m)

CAM Charges (45%) (INR m)

Parking and Advertising Income (INR m)

Total (INR m)

Less: CAM Charges of lease rent (INR m)

Less: Marketing & Maintenance Cost (INR m)

Grand Total (INR m)

EBITDA Margin (%)

Rental Yield on Total Mall Cost (%)

Net Cash flow (INR m)

Add: Terminal value at 8% cap rate (INR m)

Total (INR m)

Project IRR (%) 10 yrs, post tax

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6

(1,667)

0 (1,575) (1,575) (1,350)

(1,667) (1,575) (1,575) (1,350)

50%

135

810

365

1,203

(527)

(61)

616

76%

10%

(1,667) (1,575) (1,575) (1,350)

616

(1,667) (1,575) (1,575) (1,350)

21%

616

75%

146

1,312

590

1,949

(722)

(98)

1,128

86%

18%

1,128

Year 7 Year 8 Year 9 Year 10

90%

157

1,701

765

2,542

(765)

(111)

1,667

98%

27%

1,667

95%

170

1,939

872

2,908

(872)

(116)

1,919

99%

31%

1,919

95%

184

2,094

942

115

3,151

(942)

(115)

2,094

100%

34%

2,094

95%

198

2,261

1,018

113

3,392

(1,018)

(113)

2,261

100%

37%

2,261

29,917

32,178

Rental leasing income to grow at 15% CAGR over FY17-20E driven by lease

renewals spread over years

Exhibit 17: % of lease renewals due for various malls to drive growth in rentals ahead

PMC Chennai

46%

53%

PMC Bangalore

18%

PMC Mumbai

26%

FY18E

FY19E

FY20E

FY18-20E

FY18E

FY19E

10%

FY20E FY18-20E

FY18E

FY19E

FY20E FY18-20E

HSP & Palladium

54%

PMC Pune

32%

13%

18%

23%

15%

13%

FY18E

FY19E

FY20E

FY18-20E

FY18E

FY19E

FY20E

FY18-20E

Source: Company, MOSL

18 April 2018

Phoenix Mills

Exhibit 18: Brands associated with PHNX

Source: Company, MOSL

Not only a developer but also a mall manager – a key differentiator

A typical mall development cycle comprises three stages: (i) land acquisition, (ii)

designing & development of mall and (iii) mall management. A typical real estate

developer outsources mall management, but PHNX does this on its own, which, in

our view, is a key differentiating factor.

Why managing mall mix stands critical for a mall developer?

PHNX shelters top retail brands from India and across the globe. It could be inferred

that the company has indirectly linked its revenue with retailers, as the rental

income of the company also comprises of a variable component linked to tenants’

consumption. Hence, it becomes important for mall developers to manage the

tenant mix well and enhance the customer experience.

18 April 2018

Phoenix Mills

Exhibit 19: Mall development cycle; typical RE developer exits post mall development

A real estate

developer typically

outsources mall

management, but

PHNX has expertise

on that front

Land

acquisition

Mall

management

Design and

Development

of mall

Source: MOSL

Exhibit 20: Typical space allocation across PHNX’s malls

Particulars

Anchors

Multiplex (Anchor)

Food & Beverages (fine dining)

Food court

Family entertainment

Inline stores

% of mall space

36%

37%

Source: Company, MOSL

Relocating, resizing and churning out of retailers to manage

retail mix

PHNX’s team continuously monitors retailers’ performance. In case the performance

is not as desired, the leasing team takes actions to improve it. The following steps

taken by PHNX clearly depict its mall managing skills.

Churning out

PHNX annually churns out 5-10% of its mall space based on the performance of the

retailer. For example, leading fashion store in HSP and Palladium, Mumbai was replaced

by several small retailers, which led to an increase in rentals as well. Departmental store

was replaced by H&M, which resulted in an increase in consumption by 2x and in rentals

by 3x.

Relocating

PHNX relocated a designer labels brand to the first floor of the Palladium mall,

which led to an increase in sales for the retailer. PHNX too benefited from higher

rentals.

Resizing

Initially, a departmental store in PMC Pune Mall had ~75,000sf, which was resized to

~50,000sf and now it has ~30,000sf. However, rental stands at 1.5-2x of initial

rentals.

18 April 2018

Phoenix Mills

Initiatives taken by PHNX to attract crowd on weekdays as well

Malls usually witness low footfall on weekdays relative to weekends. PHNX has

adopted several strategies to address this footfall gap between weekend and

weekdays. Consequently, footfall now at PHNX’s malls is higher by only 30-35% on

weekends compared to weekdays. In comparison, other malls have 60-70% more

crowds on weekends. Some initiatives taken to attract crowd on weekdays include:



Mid-week events like performance by singers/dancers, and drawing

competitions for children, among others. PHNX ensures that it has at least one

such event in at least one mall on weekdays.



PHNX had planned to build the PMC Kurla mall three years after the Mumbai

metro becomes operational. However, the metro became operational three

years after mall construction. This significantly affected the mall dynamics. To

subside this impact, PHNX has taken various initiatives (such as discounts for

ladies kitty parties/dinners) to encourage customers to spend time at the mall.



Idea behind creating 212, Bar Bar and Shizu San was to occupy the mall space or

else customers would have a negative impression about the mall. As a matter of

fact, the mall saw great traction from the new food & beverages outlets, which

led to higher rentals.



PHNX has a clear objective of developing retail-led, mixed-use developments

that complement each other. For instance, PMC Kurla mall has succeeded in

attracting crowd on weekdays, as it has several commercial developments in the

vicinity.

Other key initiatives of PHNX that reflect its mall management skills



PHNX invited artists to paint the parking walls in PMC Chennai so that customers

experience something new whenever they visit the mall.

PMC Kurla has dedicated spots where customers can click photos.

Dedicated Uber and Ola desks for booking cabs.

PHNX collects parking charges from customers upfront, but the same is

reimbursed in the form of cash-back if the person shops.

PHNX established CNG pipelines instead of LPG as they are safer and cheaper.

For this, it received huge appreciation from food & beverages retailers.

PHNX will establish solar panels in the PMC Bangalore mall, which will lead to

30-40% reduction in electricity costs for retailers.

PMC Kurla – a laggard earlier has shown significant improvement

Exhibit 21: Consumption grew at CAGR of 25% over FY13-17

Consumption (INRb)

0.93

0.75

5.5

4.5

2.8

FY13

FY14

FY15

FY16

FY17

FY13

FY14

FY15

FY16

FY17

6.0

0.93

0.99

Rental Income (INRb)

0.95

7.0

Exhibit 22: Mall footfalls over FY13-17

Footfalls (mn)

Source: Company, MOSL

18 April 2018

Phoenix Mills

Exhibit 23: Occupancy level increased over FY13-17

Trading Occupancy (%)

83%

89%

87%

Exhibit 24: Overall rentals psf has been muted over FY13-17

Rental rates (INR/sf)

72%

FY13

FY14

FY15

FY16

FY17

FY13

FY14

FY15

FY16

FY17

Source: Company, MOSL

*Initially when mall had been launched, rentals psf were agreed at a higher rate however during renewals revised rate were lower than the

initially agreed rates.

We expect retail leasing income to grow at CAGR of 15% over FY17-20 on backed by

renewals due in HSP & Palladium mall and PMC Chennai (more than 50%) and

launch of Palladium Mall, Chennai

Exhibit 25: High occupancy across malls is expected going

ahead…

Occupancy (%)

93%

89%

95%

Exhibit 26: Retail leasing income to grow at 15% CAGR over

FY17-20E

Retail Income (INRb)

14%

Growth (%)

16%

12%

89%

88%

7.1

FY16

FY17

FY18E

FY19E

FY20E

FY16

7.7

FY17

8.8

FY18E

10.3

FY19E

11.5

FY20E

Source: Company, MOSL

18 April 2018

Phoenix Mills

Retail in India offers vast opportunities

CPPIB deal - a key catalyst for growth



Favorable demographics (47% of India’s population <24 years) and shift in trade

toward organized retailers should drive significant growth in the Indian retail sector

(12% CAGR over FY15-20E), going forward.

CPPIB deal could potentially add 4msf of mall space to PHNX’s current portfolio of

6msf (i.e., increasing mall portfolio by ~70%).

CPPIB has infused equity for a 49% stake in PHNX’s wholly owned subsidiary, Island

Star, by infusing INR16.6b (in tranches). Island Star operates the PMC Bangalore mall,

which is valued at a 6.25% cap rate using one-year forward EBITDA.

Post CPPIB’s capital infusion, PHNX acquired a land parcel in Wakad (Pune) to develop

a mall with an area of 1msf; it has further mixed development potential of 0.8msf.

Multiple factors driving prospects for India’s retail sector

India’s retail market is expected to reach a size of USD1t by 2020 (as per FICCI and

management consultancy PWC), growing at a CAGR of 12%. With increasing

household income, discretionary spending too is gradually rising (consumers are

increasingly vying for quality and premium products).

Urbanization in India is expected to touch 40% in 2020, rising from 31% in 2015. By

the same year, there could be more than 200 million nuclear households,

representing 25-50% higher consumption per capita expenditure. Backed by robust

economic growth and rising household income, consumer spending in India is

expected to touch USD3.6t by 2020, increasing India’s share in global consumption

to 5.8% – more than twice the current level. India’s average household income is

expected to triple to USD18,500 in 2020, up from USD6,400 in 2010 - acting as a

major driver in retail growth and leading to the evolution of new consumer

segments. Notably, increasing disposable income levels and a rising number of

sophisticated consumers have boosted demand for premium products.

Exhibit 27: 47% of India’s population <24yrs

29%

Age Group (years)

0-14

15-24

25-54

41%

55-64

18%

65+

Exhibit 28: Share of organized retail in India lowest at 3%

Organized Retail (%)

Traditional Retail (%)

Source: Company, MOSL

Source: EY, IBEF, MOSL

18 April 2018

Phoenix Mills

Exhibit 29: Indian retail to grow at 17% CAGR over FY15-20

Market Size of Indian Retail (USDb)

1300

Exhibit 30: Breakup of India’s retail market

Particulars

Total retail market

Organized retail market

E-commerce

2015 (In USDb)

630

8 to 12

560

2020E (In USDb)

1,100 to 1,200

140 to 160

45 to 50

915 to 990

Source: Company, MOSL

630

424

Unorganized retail market

2010

2015

2020E

Source: IBEF, India Retail Report, MOSL

Exhibit 31: First order derivative of India’s consumption story…

Source: Company, MOSL

Exhibit 32: Mall additions in last 3 years at all-time low

Supply (msf)

13.8

Exhibit 33: ..while demand for new space expected to

remain robust

Demand (msf)

10.7

6.2

1.6

3.3

2.7

7.6

4.0

6.5

6.9

4.1

5.7

1.3

3.6

-0.3

4.2

4.3

4.5

5.1

Source: JLL, MOSL

18 April 2018

Phoenix Mills

CPPIB deal to act as a key growth catalyst

In April 2017, PHNX announced a deal with CPPIB with a clear goal to create best-in-

class retail malls in India via its wholly owned subsidiary, Island Star Mall

Developers, which would own new malls under the said deal.

As part of the deal, CPPIB has infused equity capital of INR16.6b (in tranches) for a

49% stake in Island Star. Island Star owns the 1msf HSP Bangalore mall (also has

2msf of potential developable area under it). PHNX shall manage all developments

and operational assets under this platform and earn a fee based income like

property management fees (4% of gross rentals), commission for new leases and

fees for acquisition of land & development.

PHNX will be able to add up to 4 malls to its current retail portfolio of 8 malls post

the CPPIB deal. Also, equity infusion and rental income from the HSP Bangalore mall

(INR1b in FY17) should help PHNX to invest toward adding four malls (with 1msf of

retail space each). This, coupled with an increase in rentals from the existing malls,

significantly strengthen the company’s growth prospects. Along with CPPIB’s capital

infusion of INR16.6b, PHNX plans to borrow INR16b which shall be used towards

constructing new malls.

PMC Bangalore mall growth track record

Exhibit 34: Consumption grew at CAGR of 28% over FY13-17

Consumption (INRb)

0.88

7.8

Rental Income (INRb)

0.96

8.9

1.09

10.2

Exhibit 35: Footfall nearly doubled over FY13-17

Footfalls (mn)

0.77

0.60

6.6

3.8

FY13

FY14

FY15

FY16

FY17

FY13

FY14

FY15

FY16

FY17

Source: Company, MOSL

Exhibit 36: Occupancy level over FY13-17

Occupancy (%)

Exhibit 37: Rentals psf has grown at 12% CAGR over FY13-17

Rental rates (INR/sf)

102

FY13

FY14

FY15

FY16

FY17

FY13

FY14

FY15

FY16

FY17

Source: Company, MOSL

18 April 2018

Phoenix Mills

Exhibit 38: Equity valued at INR17b pre money (1 tranche)

Particulars

PMC Mall, Bangalore

2msf of potential developable area

Pre Money Enterprise Value

Less: Debt

Equity Value Pre Money

Equity capital infusion by CPPIB (49%)

Equity Value Post Money

INRb

Source: Company

Exhibit 39: PMC mall valued at implied cap rate of 6.25%

Particulars

PMC, Bangalore FY17 EBITDA

Growth in EBITDA (15%)

One year forward EBITDA

Value of retail asset

Implied Cap Rate

INRb

1.09

0.16

1.25

6.25%

Source: Company

Exhibit 40: CPPIB deal structure…

Phoenix Mills

PMC, Bangalore Mall

for 51% stake

CPPIB

INR16.6b

for 49% stake

Island Star Mall

Developer

(PMC, Banglore

Mall)

100%

Pune Wakad Mall

1msf

100%

Mall 2

100%

Mall 3

100%

Mall 4

100%

*PHNX will add up to 4 new malls under CPPIB deal ; Source: Company, MOSL

CPPIB has investment of USD10b in retail assets globally

CPPIB, which manages assets worth over USD250b globally, has made an investment

of USD10b in the shopping centers across Europe, America and Asia. Through this

strategic investment platform, PHNX’s aim is to develop retail-led mixed-use assets

in the top cities of India.

Pune Wakad land acquisition marks first mall development under CPPIB

platform

Post capital infusion of INR7.24b (first tranche) from CPPIB, the company acquired a

land parcel in Pune. The 13-acre land parcel in Wakad, Pune with 1.8msf of potential

developable area was acquired for INR2.3b (including TDR) to develop a mall of

1msf; rest 0.8msf for mixed-use development.

Wakad mall shall have strategic access to:



Commercial areas such as Hinjewadi, Baner and Anudh



Residential areas such as Wakad, Baner, Aundh, Balewadi, extending up to

Kothrud in south-west of Pune



Strong commercial catchment of 25msf in Hinjewadi (19msf and expanding) and

Aundh/Baner (6msf and expanding)

18 April 2018

Phoenix Mills



Very dense residential population of middle-to-high income group

Exhibit 41: Commercial catchment - Hinjewadi

Source: Company, MOSL

Exhibit 42: Connectivity to Wakad from key locations

Source: Company, MOSL

PHNX already has a PMC mall located in east Pune with 1.2msf of space (primarily

caters to east and central Pune crowd). However, the recently acquired land parcel

is in Wakad, which is in west Pune and 23km away from the existing PMC mall. The

existing mall in Viman Nagar serves the CBD of Kharadi, as well as the surrounding

residential areas like Kalyani Nagar, Boat Club, Koregaon Park, and neighboring

towns (e.g. Ahmednagar).

18 April 2018

Phoenix Mills

PHNX to generate INR23.8b CFO over FY18-20

Existing assets to provide 4.6msf of potential developable area



PHNX’s 6msf of retail mall portfolio provides it with strong cash flows. Growth going

forward is also expected to be driven by renewals in HSP & Palladium and PMC,

Chennai mall.

Its residential projects of 3.3msf have already garnered an amount equal to its

estimated total cost of projects. Therefore, unsold stock and pending collections are

expected to help generate strong operating cash flows (INR23.8b over FY18-20, in our

view).

With the next leg of growth being fully funded via CPPIB deal and minority buyouts

now complete, PHNX’s existing mall and commercial properties are expected to

generate strong free cash flows. PHNX has spent INR13.3b toward acquiring minority

stakes in its subsidiaries, which operate various malls.

We believe these free cash flows can be utilized to unlock commercial (office space)

development potential of 4.6msf in its existing land parcels.

Cash flow from retail and residential to aid growth ahead

We expect PHNX to generate CFO of INR23.8b (FCF of INR6.8b) over FY18-20,

primarily contributed by its retail assets and residential segment. Its retail assets

provide consistent cash flows. Growth in the retail segment is expected to be driven

by upcoming major renewals in HSP & Palladium and PMC Chennai (more than 50%

of leasable area).

PHNX has a residential portfolio of 3.3msf (comprising three projects), of which

unsold inventory stands at 1.5msf (FY17). Construction cost for ‘The Crest’ project

has already been incurred, and shall be recovered in the form of collections/sales.

This implies that cash flows from receivables/balance inventory to be sold would be

available at the company’s disposal. The remaining two projects – Kessaku and One

Bangalore West – are under construction; total construction cost for these is

estimated at INR12.9b, while land cost (already been incurred) stands at INR3.5b.

PHNX has already collected INR12.9b (3QFY18) from customers, and balance

collection stands at INR2b (3QFY18). Further, unsold inventory for all the three

projects is 1.5msf, and sales value from the said inventory is INR19.4b (assuming

average realization), which shall be freely available at PHNX’s disposal (likely to be

deployed toward unleashing its potential developable area of 4.6msf).

Exhibit 43: PHNX has already covered construction cost from the customer’s collections…

Residential Projects

One Bangalore West,

Bangalore

Kessaku, Bangalore

Total

Estimated Construction

Cost (INR m)

9,500

3,400

12,900

Collections (INR m)

(3QFY18)

10,528

2,353

12,881

Receivables from

customers (INR m)

(3QFY18)

1,018

987

2,005

Collections over

and above cost

(INR m)

2,046

-60

1,986

Source: Company, MOSL

18 April 2018

Phoenix Mills

Exhibit 44: PHNX to generate INR19.1 b CF (pretax) from residential projects

Project Name

One Bangalore West, Bangalore

Kessaku, Bangalore

The Crest, Chennai

Total

Unsold inventory

(3QFY18)

1.01

0.35

0.10

Avg. Realization

(INR psf)

11,724

17,970

9,771

Sales Value of inventory at avg

realization (INR m)

11,841

6,290

977

19,108

Source: Company, MOSL

Exhibit 45: Sales volume to grow at 73% CAGR over FY17-20

Area Sold (msf)

Avg. Realization (INRpsf)

11,380

10,350

10,517

11,694

Exhibit 46: Sales value to grow at 80% CAGR over FY17-20

Sales Value (INRm)

106%

Growth (%)

81%

57%

10,075

-91%

0.31

FY16

0.04

FY17

0.08

FY18E

0.14

FY19E

0.21

FY20E

4,618

FY16

414

FY17

854

FY18E

1,547

FY19E

2,431

FY20E

Source: Company, MOSL

We expect higher sales absorption from One Bangalore West and Kessaku, which is

expected to help drive higher sales in the residential portfolio.

Internal accruals and debt to fund investment in developable area

PHNX has acquired stakes from minority stakeholders by spending INR13.3b over

FY14-9MFY18 (refer below exhibit).

Exhibit 47: PHNX’s progressive stake acquisition in subsidiaries

Subsidiary

Offbeat Developers

Vamona Developers

Classic Mall

Gangetic Hotels

Pallazzio Hotels

Alliance

Classic Housing

Island Star

Palladium Construction

Big Apple Real Estate (BARE)

Graceworks Realty & Leisure

Development Name

PMC, Mumbai

PMC, Pune

PMC, Chennai

Courtyard by Marriott, Agra

The St. Regis, Mumbai

Fountainhead, Pune

Crest A, B

PMC, Bangalore

One Bangalore West & Kessaku

Phoenix United – Lucknow, Bareilly

Phoenix Paragon Plaza, Mumbai

2010

24%

59%

31%

21%

53%

58%

34%

28%

70%

73%

44%

Dec-17

100%

50%

100%

73%

100%

50%

70%

100%

67%

Source: Company, MOSL

High free cash flow is expected to provide huge headroom for growth, as minority

buyouts have already been completed. Hence, cash flows will be available for

deploying toward 4.6msf of potential developable area.

18 April 2018

Phoenix Mills

Exhibit 48: FCF to improve going forward

EBITDA - Interest (INRb)

Capex + Dividend + Minority Buyout (INRb)

6.9

4.8

3.3

1.2

5.1

3.7

4.3

4.2

4.3

4.2

6.7

6.9

5.7

7.5

7.0

3.6

FY13

FY14

FY15

FY16

FY17

FY18E

FY19E

FY20E

Source: Company, MOSL

With low cost of debt, PHNX can capitalize on further opportunities in its existing

assets. Since, the land cost has already been paid for only the construction cost is

required to be incurred.

Exhibit 49: Gross debt breakup (3QFY18)

Gross Debt (inINRm)

30,836

6,405

2,593

Commercial

1,064

Residential

Source: Company, MOSL

Retail

Hospitality

Unlocking value in existing assets by exploring other opportunities

HSP was among the first developments in India to combine retail & entertainment,

commercial, hotel and residential properties into an integrated lifestyle destination.

The company is using its market expertise and brand name to replicate the success

of HSP in other parts of Mumbai as well as other cities in India (via its Phoenix

MarketCity, Phoenix United, residential, commercial and hospitality projects).

4.6msf of potential developable area for PHNX across existing assets

PHNX has 4.6msf of potential developable area, which shall be added to its

portfolio. With this development potential, PHNX will not be required to incur any

land cost. Only construction cost has to be incurred.

18 April 2018

Phoenix Mills

Exhibit 50: 4.6msf potential developable area from its existing assets

Asset Name

HSP & Palladium

PMC Mall

Total

Tentative Development

Retail and Commercial

Commercial

Commercial, mall and hotel

Commercial

City

Lower Parel, Mumbai

Viman Nagar, Pune

Wakad, Pune

Bangalore

Chennai

Potential Developable (msf)

1.0

0.4

0.8

2.0

0.4

4.6

Source: Company, MOSL

Exhibit 51: St. Regis hotel above Palladium Mall Mumbai

ST. REGIS HOTEL

PALLADIUM

MALL

Source: Company, MOSL

Exhibit 52: Mixed use development in PMC Kurla Mall, Mumbai

Source: Company, MOSL

18 April 2018

Phoenix Mills

REITs shall usher much-needed liquidity in RE sector

REITs shall bring back real estate sector into focus

What is REITs and what does it imply for the RE sector…

REIT is an investment vehicle that owns and operates real estate-related assets, and

allows individual investors to earn income produced through ownership of

commercial real estate without actually having to buy any assets.

An underdeveloped capital and debt market, coupled with limited options for raising

funds, has resulted in significant cash blockage for developers owning assets. REIT as

an investment vehicle is expected to infuse much-needed liquidity in the sector,

helping scale up investments.

REITs are modeled after mutual funds, and provide their investors with all types of

income streams and benefits of long-term capital appreciation. A REIT also trades on

major stock exchanges and provides investors with a highly liquid stake in real assets

typically offering high yields.

Over the last decade, globally, REITs have developed into a mature market force,

providing easy access to high-quality assets, along with stable return on

investments. To illustrate – as of 2016, there were over 500 REITs operating across

various countries, with total market capitalization of more than USD900b.

Exhibit 53: REIT market cap by market, 2010 v/s 2016 (USDb)

Source: EY, MOSL

18 April 2018

Phoenix Mills

Exhibit 54: Cumulative index performance – price returns (USD)

Source: MSCI World REITs, MOSL

Exhibit 55: Annual performance of MSCI World REITs and MSCI World

Year

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

MSCI World REITs

-1%

18%

-3%

18%

16%

20%

-48%

-17%

MSCI World

20%

-3%

24%

13%

-8%

10%

27%

-42%

Source: MSCI World REITs, MOSL

Taking a closer look at REITs globally…



USA:

The US Congress created the Real Estate Investment Trust (US-REIT) in

1960 to make large-scale, income-producing real estate investments accessible

to smaller investors. Since then, US-REIT has dominated the market, and has a

market capitalization which grew from USD 1.4943 billion in 1971 to USD 1

trillion by 2016.

Singapore:

Since the launch of the first Singapore REIT in 2002, the REIT sector

has become one of the biggest success stories of the Singapore Stock Exchange

(SGX). Singapore REITs have since grown into a USD 53 billion market. Currently,

the total ‘REITable’ stock available in Singapore’s CBD is 2.687 million sqm.

Australia:

The first REIT in Australia was the General Property Trust – a listed

property trust started in 1971. A-REITs are the largest REIT MARKET in Asia with

a total market capitalization of almost €72 billion, accounting for 9.36 percent of

the global REIT market capitalization. The Sydney CBD market has 3.060 million

sq. m. of REITable stock.

18 April 2018

Phoenix Mills

Importance of REITs in retail mall/ commercial real estate development

REITs, which complete the retail/ commercial real estate project cycle, is expected

to provide an exit route to developers from the completed retail mall/ commercial

assets as it is expected to help attract investors seeking investment in high-quality

investment grade properties. Additionally, REITs has also opened up the avenues to

get funding for under construction properties which shall also help to foster the

development process of the assets.

Exhibit 56: Importance of REIT in retail mall/ commercial real estate development

Exit

Mechanism to

be addressed

by REITs

Project initiation

& land

acquisition

Developer’s equity

for project

initiation

REITs completes retail

mall/ commercial real

estate life-cycle

Sale of the asset or

mortgage on the

asset

Handover

and

operations

Project

development

Developer’s equity,

private equity, debt

from banks and NBFC

Source: KPMG, MOSL

Advantages of REITs to various stake holders

Exhibit 57: REITs advantage to various stakeholders

Developers

•Improves liquidity in the

sector

•Capital raising

opportunity for mid-tier

developers

Institutional

Investors

•Provides an exit

opportunities for existing

PE players, developers

and financial investors

•Help attract long term

investors such as ension

and insurance funds

looking for moderate risk

v/s return ratio

Retail Investors

•Reduces ticket size for

investing in real estate

sector

•Tranparent investment

alternative in real estate

sector wuth experienced

professional and

independent oversight

•Easy entry and exit in the

real estate sector

Government

•Help improve

government's revenue

•Funding through EITs

could help facilitate other

key real estate policy

implementation like

targeting 100 smart cities

Source: KPMG, MOSL

18 April 2018

Phoenix Mills

Exhibit 58: A typical REITs structure

Source: KPMG, MOSL

Recent key changes made by SEBI in REITs



Allowing REITs to invest in two level holding structures with, inter-alia, following

conditions:

a. REIT shall hold or proposes to hold controlling interest and not less than

51% of the equity share capital or interest in the underlying holdco/SPVs.

Further, a holdco as well shall hold controlling interest and not less than

51% of the equity share capital or interest in the underlying SPVs.

b. Majority of the Board of SPV and Holdco to be appointed by Investment

Manager, in consultation with the trustee.

c. Ultimate holding interest of the REIT/InvIT in the underlying SPV(s) is not

less than 26%.

Rationalizing the definition of associates and related parties and aligning them

in line with the SEBI (Listing Obligations and Disclosure Requirement)

Regulations.

Allowing REITs to invest upto 20% in under construction assets

Removing the cap on the number of sponsors and allowing concept of sponsor

group.

18 April 2018

Phoenix Mills

SWOT Analysis



Presence in six key

consumption centers

in India

Single entry point for

any retailer entering

India

Mall management

skills help PHNX to

deliver growth from

existing assets by

continuously

churning retail

tenants



PHNX’s flagship mall

HSP & Palladium

cannot increase its

leasable despite

making rentals of

INR311psfp, due to

space constraints

Slow movement in

Bangalore’s

residential projects



Shift from unorganized

to organized retailer to

act as key growth driver

Grade A mall vacancy at

all-time low, which shall

provide mall developers

with huge opportunities

47%

Indian

population is below 24

years of age, which

provides PHNX’s malls

huge potential to act as

consumption centers



E-commerce could

dampen consumption

at malls, leading to

lower rentals

Although fire & safety

checks are in place, any

unforeseen event can

dampen the brand of

the company



18 April 2018

Phoenix Mills

Bull & Bear case

Bull case

In case of retail malls, we have assumed a lower vacancy rate and higher rentals

per month at INR159pm (avg.) (FY19) and a cap rate of 7.5% vis-à-vis our base

case rental of INR153pm (avg.) (FY19) and a cap rate of 8%. We have assumed

rentals to grow at an average CAGR of 9% vis-à-vis our base case average CAGR

of 8% over FY18-22E. In case of commercials, we have assumed INR102pm

(FY19) (avg.) as the rental for all commercial assets vis-à-vis our base case rental

of INR98pm (FY19) (avg.). Hence, we increase the NAV of retail and commercial

assets by 23%.



In case of hotels, we have assumed a lower vacancy rate and higher room

rentals per day at INR9,035 (avg.) (FY19) vis-à-vis our base case average room

rental of INR8,569 (avg.) (FY19).



Target price in the base case is INR732. However, as per our bull case scenario

the target price would stand at INR899, 23% above the base case NAV.



Bear Case



In case of retail malls, we have assumed a higher vacancy rate and lower rentals

per month at INR146pm (avg.) (FY19) and a cap rate of 9% vis-à-vis our base

case rental of INR153pm (avg.) (FY19) and a cap rate of 8%. We have assumed

rentals to grow at an average CAGR of 7% vis-à-vis our base case average CAGR

of 8% over FY18-22E. In case of commercials, we have assumed INR96pm (FY19)

(avg.) as the rentals for all commercial assets vis-à-vis our base case rental of

INR98pm (FY19) (avg.). Hence, we decrease the NAV of retail and commercial

assets by 26%.



In case of hotels, we have assumed a higher vacancy rate and lower room rental

per day at INR8,164 (avg.) (FY19) vis-à-vis our base case average room rental of

INR8,569 (avg.) (FY19).



Target price in the base case is INR732. However, as per our bear case scenario

the target price would stand at INR538, 27% below the base case NAV.

Exhibit 59: Scenario Analysis – Bull & Bear Case

Bull case

Particulars

Retail (Malls)

Commercial

Hotel

Residential & Cash

Equity Value

CMP

Up/down

INR m

105,384

8,652

10,840

12,758

137,634

Per Share (INR)

689

899

606

48%

77%

100%

Base Case

557

732

606

21%

Bear case

INR m

61,964

6,544

5,607

8,190

82,305

Per Share (INR)

405

538

606

-11%

75%

10%

100%

Source: MOSL

18 April 2018

Phoenix Mills

Expect PAT CAGR of 37% to INR4b over FY18-20

Net debt to equity ratio to come down to 0.7x by FY20 from 1.6x in FY17



PHNX is expected to deliver revenue CAGR (FY18-20) of 15% to INR21.3b, primarily

driven by retail and residential revenue CAGR of 12% and 42%, respectively.

Retail is the key segment contributing 65% of revenue in FY18. Within retail, the HSP &

Palladium mall contributes 41% of revenues. We expect HSP & Palladium to grow at

14% in FY19, mainly led by an increase in occupancy to 96% from 91% in FY18 and a

rise in rentals by 8% to INR396psf per month.

We expect the EBITDA margin to expand by 140bp over FY18-20, leading to EBITDA

CAGR of 15%. The expansion in margins is expected to be driven mainly by higher

rentals via an improved tenant mix. However, we expect PAT (after MI) CAGR of 37%,

mainly due to a decline in interest cost from INR3.6b in FY18 to INR3b in FY20.

We expect PHNX to generate CFO of INR24.1b over FY18-20, which is likely to be

utilized for debt repayment, leading to lower a net debt to equity ratio of 0.6x by FY20

v/s 1.6x in FY17.

Revenue to grow at 15% CAGR over FY18-20

We expect PHNX to deliver revenue CAGR (FY18-20) of 15% to INR21.3b, mainly

driven by retail revenue CAGR of 12% to INR13.3b and residential revenue CAGR of

42% to INR2.8b. We expect PHNX’s office leasing and hospitality segments to deliver

revenue CAGR of 33% and 7%, respectively, over FY18-20. De-growth of 11% in FY18

revenue is on account of change in accounting treatment of PMC, Chennai mall. For

FY18 and onwards it has been classified as an associate company as against

subsidiary company earlier.

Exhibit 60: Revenue to grow at CAGR of 15% over FY18-20E

Revenue from operations (INRb)

Change in accounitng treatment of

PMC, Chennai mall

16.2

-11%

17.8

FY16

18.2

FY17

FY18E

18.9

FY19E

21.3

FY20E

FY16

FY17

FY18E

FY19E

FY20E

11.1

11.9

17%

Growth (%)

13%

Exhibit 61: Segmental revenue breakup (INRb)

Retail

2.5

1.4

2.7

Residential

3.1

0.8

2.4

Commercial

Hospitality & Others

3.8

0.8

2.3

12.0

4.0

1.2

2.8

3.5

0.7

1.4

10.6

13.3

Source: Company, MOSL

Exhibit 62: Revenue contribution from each segment

Retail

14%

15%

63%

FY16

Residential

17%

13%

65%

FY17

Commercial

22%

65%

FY18E

Hospitality & Others

20%

12%

63%

FY19E

19%

13%

62%

FY20E

Source: Company, MOSL

18 April 2018

Phoenix Mills

The retail segment is the key segment contributing 65% of revenue in FY18E.

Growth in the segment over FY18-20 is likely to be driven by its existing mall

portfolio. Within the retail segment, HSP and Palladium are key malls (41% revenue

contribution). We expect HSP and Palladium to grow at 14% in FY19, mainly led by

an increase in occupancy to 96% from 91% in FY18 and a rise in rentals by 8% to

INR396psf per month (growth is mainly driven by 13 new small stores that have

replaced the anchor tenant, which shall help in pushing rental yields).

Exhibit 63: Retail income (excluding Chennai Mall) to grow

at 4% CAGR over FY17-20E

Retail leasing income excluding Chennai Malls (INRb)

Growth (%)

13%

11%

-11%

11.1

FY16

11.9

FY17

10.6

FY18E

12.0

FY19E

13.3

FY20E

11.1

FY16

11.9

FY17

12.9

FY18E

14.8

FY19E

16.6

FY20E

Exhibit 64: Retail income (including Chennai Mall) to grow at

12% CAGR over FY17-20E

Retail leasing income including Chennai Mall (INRb)

Growth (%)

15%

12%

Source: Company, MOSL

Residential income is expected to grow at a CAGR of 42% over FY18-20, as its key

residential projects One Bangalore West and Kessaku are nearing completion. Office

leasing income will be driven by commissioning of new office space of 0.2msf in

FY19 (The Fountainhead, Pune). Hospitality and other income include income from

hotel rooms, banquets and restaurants income. We expect St. Regis (Hotel) to

continue operating at optimum level of occupancy (75%) and drive revenues.

Exhibit 65: Residential income to grow at 42% CAGR over

FY18-20E

Residential (INRb)

Growth (%)

36%

Exhibit 66: Commercial income to grow at 33% CAGR over

FY18-20E

Commercial (INRb)

Growth (%)

22%

15%

2.4

-11%

2.7

FY16

FY17

2.2

-10%

-44%

2.3

3.1

FY20E

1.4

FY16

0.8

FY17

0.8

FY18E

1.0

FY19E

1.2

FY20E

FY18E

FY19E

Source: Company, MOSL

18 April 2018

Phoenix Mills

Exhibit 67: Hospitality segment to grow at 7% CAGR over FY18-20E

Hospitality & others (INRb)

24%

21%

12%

2.5

FY16

3.1

FY17

3.7

FY18E

4.2

FY19E

4.4

FY20E

Source: Company, MOSL

Growth (%)

PAT growth to outperform EBITDA growth due to declining interest cost

We expect the EBITDA margin to expand by 140bp over FY18-20, leading to EBITDA

CAGR of 16% (largely in line with revenue CAGR of 15%). The expansion in margins is

expected to be driven mainly by higher rentals via an improved tenant mix.

However, we expect PAT (after MI) CAGR of 37%, mainly due to a decline in interest

cost from INR3.6b in FY18 to INR3b in FY20. The decline in interest cost is expected

to be mainly driven by huge cash surplus (CFO of INR23.8b) generated over FY18-20

from its existing assets across segments. Thus, we expect its debt to decline from

INR37.8b in FY18 to INR27.3b in FY20. Expansion through new malls will be funded

through equity infusion of INR16.6b under the CPPIB deal. This will also lead to an

increase in RoE from 8.5% in FY18 to 10.6% in FY20.

Exhibit 68: EBITDA margin to expand by 140bp over FY18-

20E

EBITDA (INRb)

48%

46%

44%

13%

7.9

FY16

8.5

FY17

7.7

FY18E

9.2

FY19E

10.5

FY20E

1.5

FY16

1.7

FY17

2.2

FY18E

3.2

FY19E

4.0

FY20E

28%

26%

EBITDA Margin (%)

49%

48%

Exhibit 69: PAT to grow at 37% CAGR over FY18-20E

PAT (INRb)

Growth (%)

48%

Source: Company, MOSL

Exhibit 70: Net DE ratio to come down to 0.7x by FY20E

1.8

Net Debt (INRb)

1.6

1.3

0.9

0.7

Net Debt to Equity Ratio

Exhibit 71: Debt repayment would lead to lower interest

Interest Expense (INRb)

Effective Interest Rate (%)

12.1%

11.3%

9.6%

9.7%

9.8%

37.3

FY16

35.4

FY17

36.8

FY18E

32.4

FY19E

26.7

FY20E

4.4

FY16

4.2

FY17

3.6

FY18E

3.4

FY19E

3.0

FY20E

Source: Company, MOSL

18 April 2018

Phoenix Mills

Exhibit 72: PHNX to generate CFO of INR23.8b over FY18-20

Cash flow from Operations (INR)

226%

Growth (%)

8.0

43%

-60%

4.3

FY16

14.0

FY17

5.7

FY18E

8.1

FY19E

10.0

FY20E

FY16

FY17

FY18E

FY19E

FY20E

24%

8.0

8.2

6.0

6.6

Exhibit 73: RoE and RoCE to show an improving trend

RoCE (%)

8.5

8.1

RoE (%)

9.8

10.6

7.4

Source: Company, MOSL

We expect working capital cycle to reduce by 39 days over FY17-20E from 193 days

in FY17, mainly with revenue recognition from the residential segment leading to

lower inventory.

Exhibit 74: WC cycle is higher due to inventory build-up of residential business

WC Cycle (Days)

296

FY16

193

FY17

238

FY18E

208

FY19E

154

FY20E

Source: Company, MOSL

18 April 2018

Phoenix Mills

Valuation and view

Initiating with Buy

PHNX well placed to ride on India’s consumption story



India’s retail industry is at an inflection point, with its market expected to reach

a size of USD1t by 2020, growing at a CAGR of 12%. Multiple MNC retailers have

entered the Indian market, and many more are expected to participate in this

growth story. We believe that PHNX offers a unique way to play this retail

growth story via its efficient operations and multiple functions under one roof.

We estimate that PHNX's retail annuity income (excluding CAM charges) will

grow steadily from INR7.7b in FY17 to INR11.5b in FY20, largely led by (a)

upcoming major renewals in HSP and Palladium (54% of lease area) and PMC

Chennai (53% of lease area) and (b) scale up of Palladium Mall, Chennai and

commercial assets. Our earnings estimates suggest that, over FY17-20, PHNX will

post (a) revenue CAGR of 15%, (b) EBITDA CAGR of 16% and (c) PAT CAGR of

37%. PAT is expected to grow at a faster pace, mainly due to declining interest

outgo. PHNX is expected to generate CFO of INR23.8b, which, in our view, will

be utilized for debt repayment. Thus, debt is expected to decline from INR36.3b

in FY17 to INR24.3b in FY20. Growth over the next two years is expected to be

driven by sweating of existing assets only. Growth in the Pune mall (under CPPIB

deal) will start kicking from FY22.

We believe that PHNX is a unique way to play India’s retail growth story.

Moreover, with clarifications and issues surrounding REITs now behind, we

expect India to attract strong inflows, where PHNX can become a great choice.

We prefer Phoenix Mills based on a) strong operational performance providing

advantages over competition, b) scalability through CPPIB deal and c) robust

cash generation leading to a reduction in gearing and providing opportunities to

acquire new malls. The stock trades at a PE of 29x/23x FY19/20E, P/BV of

2.6x/2.3x FY19/20E and EV/EBITDA of 13.7x/11.4x respectively. We value retail

assets based on NAV approach, assuming a cap rate of 8% and a discount rate of

13%. We initiate coverage on PHNX with a

Buy

rating and SOTP based target

price of INR732 (upside 21%).

Exhibit 75: Initiate with an upside of 21%

Particulars

Retail (Malls)

Commercial

Hotel

Residential & Cash

Equity Value

CMP

Up/down

Methodology

NAV

EV/ EBITDA

NAV

Metrics

8% cap rate & 13% discount rate

9% cap & 13% discount rate

15x

13% discount rate

INR m

85,299

7,191

9,037

10,543

112,071

Per Share (INR)

557

732

606

21%

76%

100%

Source: MOSL



Apart from the planned addition of four new malls under the CPPIB deal

(wherein land acquisition for one mall is already done), PHNX has 4.6msf of

development potential from its existing assets. It is important to note that the

said development potential shall have an outflow of construction cost only as

land cost has already been paid for. We have not factored in 4.6msf of

18 April 2018

Phoenix Mills



development potential in our valuation, which could act as a next trigger for

growth.

PHNX acquired partly completed mall for INR2,310m (excluding stamp duty) in

Indore (FY17) in an online auction conducted by the bank. PHNX has already

paid INR580m and is waiting to get a clean title on land from the bank. Company

has focused on planning the mall during the said period of one year and once

the possession of the property is given within 30-36 months before the

company will be able to complete the remaining construction, the interior works

and get the mall operational. Additional construction cost to be incurred for the

mall is INR3,750.

Of the total 17 acres land parcel in Lower Parel Mumbai, PHNX has balance land

parcel of 3 acres (adjacent to HSP Mall), with a development potential of 1msf.

The same offers an optional value of INR102 per share, which we have not

included in our target price.

Exhibit 76: Optionality value of INR102/share on Lower Parel land

Optional Value

Potential leasable area (in msf)

Lease psf pm

Total income pa (INR m)

Maintenance cost @ 5% (INR m)

Net Lease Income (INR m)

Cap value @ 8% (INR m)

PV @ 13% disc rate and 5yrs (INR m)

Construction cost @ INR4500psf (INR m)

Other FSI and approval cost (INR m)

Total Outflow (INR m)

Net Value (INR m)

Value per share (INR)

280

3,360

168

3,192

39,900

21,656

4,500

1,500

6,000

15,656

102

Source: MOSL

Exhibit 77: 10yr 1yr forward P/E

P/E (x)

Min (x)

50.0

35.0

20.0

5.0

-10.0

24.4

Avg (x)

+1SD

Max (x)

-1SD

Exhibit 78: 10yr 1yr forward EV/EBITDA

EV/EBITDA (x)

Min (x)

40.0

30.0

20.0

10.0

0.0

5.4

Avg (x)

+1SD

Max (x)

-1SD

Source: Bloomberg, MOSL

18 April 2018

Phoenix Mills

Exhibit 79: 10yr 1yr forward P/B

P/B (x)

4.5

3.5

2.5

1.5

0.5

-0.5

2.6

Avg (x)

Max (x)

Min (x)

+1SD

3.9

Source: Bloomberg, MOSL

18 April 2018

Phoenix Mills

Key risks

Operational risks

Securing government approvals is crucial in project development. Any delay in

approvals can hamper project dynamics significantly. Also, post RERA

implementation, regulations have become stricter than ever, with severe penalties

imposed for project delays. All this could affect economic viability of projects, and

thus, brand credibility.

Threat from e-commerce

PHNX’s rental incomes are indirectly linked to consumption or sales made by the

tenants. In recent times, the trend of online shopping in India is increasing rapidly.

This could possibly affect sales of the tenants, leading to lower rentals for PHNX.

Macroeconomic factors

Any decline in property prices could exert pressure on the real estate market. Also,

modifications in government policies, varying market movements and changing

consumer preferences could considerably damage players operating in the real

estate sector.

Increasing land cost

The largest cost incurred by an entity in the real estate sector is toward land

acquisition. As land prices increase, the impact shall be felt on the margins and

financials of the company.

18 April 2018

Phoenix Mills

Management overview

Ashokkumar Ruia, Chairman & Managing Director

Mr. Ruia is a graduate from Cambridge and has pursued an active career in both

business and sports. He has the unique distinction of representing the country in

two sports, Bridge and Golf, demonstrating an inimitable desire to excel in whatever

he undertakes. He has been on the Board of PHNX since 1963. He has vast

experience in managing the company’s affairs and over the years has contributed

significantly to its growth. He is actively involved in mentoring the leadership team

and in various aspects of the company’s expansion plans.

Atul Ruia, Jt. Managing Director

Mr. Ruia is a graduate in Chemical Engineering from the University of Pennsylvania

and holds a degree in Business Management from the Wharton School of Finance.

He joined the Board of PHNX in 1996 and is the key visionary, pioneer and force

behind the development of High Street Phoenix, Mumbai’s first retail-led mixed use

destination. It was under his aegis that the Company embarked upon a pan-India

asset creation strategy with the flagship brand of ‘Phoenix MarketCity’.

Shishir Shrivastava, Jt. Managing Director

Mr. Shrivastava graduated from IHM, Bengaluru and has been associated with the

Phoenix Group since 2000 in various capacities. While he was instrumental in

shaping up High Street Phoenix to its current reputation, he also laid the foundation

for the service and advisory verticals and seen through the successful culmination of

the Palladium Hotel and Phoenix Marketcity projects, launched in phases. As Joint

Managing Director, he continues to drive strategy and oversee several critical

functions of the Company.

Pradumna Kanodia, Director – Finance

Mr. Kanodia is a qualified Chartered Accountant and Company Secretary. He has

over 27 years of experience in corporate management, finance and commercial

matters, fiscal and strategic planning, budgeting and cash flow management. He

heads the finance and accounts teams and plays a key role in fund raising and

liaisoning with banks for debt funding.

18 April 2018

Phoenix Mills

Financials and valuations

Consolidated - Income Statement

Y/E March

Total Income from Operations

Change (%)

Cost of Materials/Construction

Employees Cost

Power & Fuel Cost

Other Expenses

Total Expenditure

% of Sales

EBITDA

Margin (%)

Depreciation

EBIT

Int. and Finance Charges

Other Income

PBT bef. EO Exp.

EO Items

PBT after EO Exp.

Total Tax

Tax Rate (%)

Minority Interest

Reported PAT

Adjusted PAT

Change (%)

Margin (%)

Consolidated - Balance Sheet

Y/E March

Equity Share Capital

Total Reserves

Net Worth

Minority Interest

Total Loans

Deferred Tax Liabilities

Capital Employed

Gross Block

Less: Accum. Deprn.

Net Fixed Assets

Goodwill on Consolidation

Capital WIP

Total Investments

Curr. Assets, Loans&Adv.

Inventory

Account Receivables

Cash and Bank Balance

Loans and Advances

Curr. Liability & Prov.

Account Payables

Other Current Liabilities

Provisions

Net Current Assets

Appl. of Funds

FY13

4,699

19.1

-39

383

772

951

2,068

44.0

2,631

56.0

474

2,157

1,430

521

1,247

-7

1,241

427

34.4

-28

842

846

-19.9

18.0

FY14

14,485

208.3

3,500

731

1,426

2,045

7,701

53.2

6,784

46.8

1,055

5,729

3,451

391

2,669

2,753

909

33.0

560

1,285

1,228

45.2

8.5

FY15

16,533

14.1

2,813

915

1,790

3,395

8,914

53.9

7,620

46.1

1,681

5,939

3,956

312

2,295

-938

1,357

493

36.3

510

354

952

-22.5

5.8

FY16

17,795

7.6

2,848

1,244

1,983

3,852

9,926

55.8

7,869

44.2

1,773

6,096

4,425

302

1,974

-387

1,587

767

48.3

-470

1,289

1,489

56.5

8.4

FY17

18,246

2.5

2,466

1,403

2,027

3,880

9,777

53.6

8,469

46.4

1,953

6,516

4,230

472

2,758

858

31.1

221

1,679

12.8

9.2

FY18E

16,210

-11.2

1,524

1,848

3,599

8,494

52.4

7,716

47.6

2,037

5,679

3,553

519

2,645

899

34.0

-410

2,156

28.4

13.3

FY19E

18,944

16.9

1,781

1,743

2,103

4,149

9,775

51.6

9,169

48.4

2,157

7,011

3,444

606

4,174

1,419

34.0

-439

3,193

48.1

16.9

(INR m)

FY20E

21,328

12.6

2,005

1,920

2,325

4,628

10,877

51.0

10,451

49.0

2,347

8,103

2,965

256

5,394

1,834

34.0

-469

4,030

26.2

18.9

(INR m)

FY20E

306

39,581

39,887

9,565

27,255

-1,252

75,455

64,271

14,681

49,590

3,341

6,243

10,256

16,521

8,756

1,461

546

5,759

10,496

1,192

8,318

986

6,026

75,455

FY13

290

17,397

17,687

4,252

21,956

-477

43,418

29,917

2,079

27,837

1,670

5,554

14,570

7,770

846

684

5,270

6,212

1,415

4,141

656

8,358

43,418

FY14

290

16,948

17,237

7,216

34,062

-858

57,657

45,060

3,363

41,697

2,351

3,544

19,152

11,417

1,968

851

4,916

9,087

2,018

6,546

524

10,065

57,656

FY15

290

16,447

16,737

6,212

34,023

-1,047

55,925

46,363

5,061

41,302

2,138

1,997

19,928

11,783

2,192

920

5,032

9,441

1,462

7,217

762

10,487

55,925

FY16

306

19,967

20,273

4,789

38,895

-1,096

62,861

50,371

6,824

43,547

1,933

1,949

1,611

24,104

13,240

2,786

1,630

6,448

10,282

1,616

8,115

551

13,822

62,861

FY17

306

21,566

21,872

2,797

36,255

-1,252

59,672

50,171

8,139

42,031

3,341

3,285

4,096

16,449

9,455

1,470

812

4,711

9,529

1,254

7,431

843

6,920

59,672

FY18E

306

28,384

28,691

4,969

37,755

-1,252

70,163

54,271

10,176

44,095

3,341

3,000

11,496

17,041

9,904

1,776

984

4,377

8,809

1,090

6,970

749

8,232

70,163

FY19E

306

35,957

36,263

9,565

33,255

-1,252

77,831

59,271

12,333

46,937

3,341

4,582

15,256

17,808

10,069

1,817

807

5,115

10,092

1,071

8,146

875

7,715

77,831

18 April 2018

Phoenix Mills

Financials and valuations

Ratios

Y/E March

Basic (INR)

EPS

Cash EPS

BV/Share

DPS

Payout (%)

Valuation (x)

P/E

Cash P/E

P/BV

EV/Sales

EV/EBITDA

Dividend Yield (%)

Return Ratios (%)

RoE

RoCE

RoIC

Working Capital Ratios

Asset Turnover (x)

Inventory (Days)

Debtor (Days)

Creditor (Days)

Leverage Ratio (x)

Interest Cover Ratio

Net Debt/Equity

Consolidated - Cash Flow Statement

Y/E March

OP/(Loss) before Tax

Depreciation

Interest & Finance Charges

Direct Taxes Paid

(Inc)/Dec in WC

CF from Operations

Others

CF from Operating incl EO

(Inc)/Dec in FA

Free Cash Flow

(Pur)/Sale of Investments

Others

CF from Investments

Issue of Shares

Inc/(Dec) in Debt

Interest Paid

Dividend Paid

Others

CF from Fin. Activity

Inc/Dec of Cash

Opening Balance

Closing Balance

FY13

5.5

8.6

115.6

2.1

44.3

FY14

8.0

14.9

112.6

2.1

29.0

FY15

6.2

17.2

109.4

2.1

108.4

97.5

35.2

5.5

7.6

16.5

0.3

5.6

7.8

7.4

0.3

260

1.5

2.0

FY16

9.7

21.3

132.5

2.2

35.6

62.3

28.4

4.6

7.3

16.5

0.4

8.0

6.0

5.8

0.3

272

1.4

1.8

FY17

11.0

23.7

142.9

0.4

4.9

55.2

25.5

4.2

7.0

15.1

0.1

8.0

8.2

0.3

189

1.5

1.6

FY18E

14.1

27.4

187.5

2.2

18.8

43.0

22.1

3.2

8.0

16.8

0.4

8.5

6.6

7.1

0.2

223

1.6

1.3

FY19E

20.9

35.0

236.9

2.2

12.7

29.0

17.3

2.6

6.6

13.7

0.4

9.8

7.4

8.3

0.2

194

2.0

0.9

FY20E

26.3

41.7

260.6

2.2

10.1

23.0

14.5

2.3

5.6

11.4

0.4

10.6

8.1

9.3

0.3

150

2.7

0.7

(INR m)

FY20E

5,394

2,347

2,709

-1,834

1,428

10,045

-6,661

3,384

5,000

256

-1,405

-6,000

-2,965

-405

469

-8,901

-261

807

546

0.3

4.9

4.8

5.3

0.1

604

110

1.5

1.2

0.3

7.0

9.0

8.9

0.3

288

1.7

1.9

FY13

1,242

475

1,057

-492

-2,035

248

-11

236

-4,411

-4,174

-630

499

-4,542

524

5,330

-1,530

-335

3,990

-316

1,000

684

FY14

2,754

1,055

3,241

-1,111

-2,187

3,751

3,768

-14,820

-11,052

2,086

279

-12,456

12,720

-3,493

-371

8,855

168

684

851

FY15

1,357

1,681

3,777

-891

-1,419

4,505

1,131

5,636

-1,074

4,562

-1,326

1,379

-1,021

-188

-4,017

-372

-4,546

851

920

FY16

1,587

1,773

4,237

-1,352

-1,940

4,304

668

4,972

-3,856

1,116

205

-3,555

2,760

1,729

-4,469

-727

-707

710

920

1,630

FY17

2,758

1,953

3,909

-438

5,853

14,035

102

14,138

-1,847

12,291

-2,429

349

-3,927

-6,647

-4,321

-83

-11,029

-818

1,630

812

FY18E

2,645

2,037

3,034

-899

-1,141

5,676

-3,815

1,861

-7,400

519

-10,697

1,500

-3,553

-405

7,650

5,192

171

812

984

FY19E

4,174

2,157

2,838

-1,419

340

8,090

-6,582

1,508

-3,760

606

-9,736

-4,500

-3,444

-405

9,819

1,469

-177

984

807

18 April 2018

REPORT GALLERY

RECENT INITIATING COVERAGE REPORTS

Phoenix Mills

NOTES

18 April 2018

Explanation of Investment Rating

Investment Rating

BUY

SELL

NEUTRAL

UNDER REVIEW

NOT RATED

Expected return (over 12-month)

>=15%

< - 10%

> - 10 % to 15%

Rating may undergo a change

We have forward looking estimates for the stock but we refrain from assigning recommendation

Phoenix Mills

*In case the recommendation given by the Research Analyst becomes inconsistent with the investment rating legend, the Research Analyst shall within 28 days of the inconsistency, take appropriate measures to make the recommendation consistent with the investment rating legend.

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Analyst ownership of the stock

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18 April 2018