Phoenix Mills stock climbs 3% after firm buys land parcel in Gujarat

Shares of The Phoenix Mills rose over 3% today after the real estate firm said it has completed the acquisition of a 7.22-acre parcel in Surat, Gujarat for about Rs 510 crore. Phoenix Mills stock climbed 3.24 per cent to Rs 1443.55 against the previous close of Rs 1398.20 on BSE today. 

Phoenix Mills shares are trading higher than 5 day, 100 day and 200 day moving averages but lower than 20 day and 50 day moving averages. Stock of Phoenix Mills has gained 39.3 per cent in a year and risen 44.92 per cent in 2022.

Total 4,508 shares of the firm changed hands amounting to a turnover of Rs 64.44 lakh on BSE. Market cap of the firm climbed to Rs 25,536.25 crore in early trade today.

The land parcel is situated at a strategic location on Udhana Magdalla Road, Surat, Gujarat.  

The land has been acquired through Thoth Mall and Commercial Real Estate Private Limited ("Thoth"), an indirect subsidiary of the company. Thoth will develop a premium retail destination with gross leasable area of approximately 1.0 million square feet and currently expects to complete the retail development by FY27.

Graceworks Realty & Leisure Private Limited ("GRLPL"), which is a PML-GIC Joint Venture ("JV") entity, owns 80% equity shareholding in Thoth and the balance 20% equity shareholding is held by Safal Construction (India) Private Limited, the flagship development arm of the Ahmedabad-based BSafal Group ("BSafal").

Meanwhile, Kotak Institutional Equities has assigned an add call to the stock with a target of Rs 1,640. The management had highlighted in the Q3FY22 earnings call potential opportunities in Surat, which now adds another leg of growth after its acquisition in Kolkata and brownfield expansion (Project Rise) at High Street Phoenix in Mumbai, Kotak said. 

Kotak said Phoenix Mills has four malls in construction stage-with a project cost of Rs 4,000 crore (Rs 3,350 crore spent until September 2022), of which Phoenix Citadel Indore has been recently commissioned. The acquisition of the Surat land parcel lends further visibility for growth, Kotak said.  

The brokerage said Phoenix Mills currently trades at 14 times EV/Ebitda with Ebitda likely to compound at 45 per cent between FY2022 and FY2025E. "Further, the commissioning of assets at Kolkata/Phoenix Rise in Mumbai and other commercial office space will likely keep the earnings trajectory in strong double-digits. Maintain ADD with a fair value of Rs 1,640/share," it said.

The Phoenix Mills Limited is engaged in the development and leasing of commercial and retail space. It operates in two segments: Property and related services and Hospitality. The Property and related services segment are engaged in providing mall /office areas on license basis and development of commercial / residential properties. 

The Hospitality segment is engaged in the operation of hotels and restaurants. Its retail projects include Phoenix Palladium, Mumbai; Phoenix Marketcity, Pune; Phoenix Mall of the Millennium, Pune and Palladium, Chennai.