Why Phoenix Mills' 79% Revenue Surge Failed To Impress Analysts, Investors

Phoenix Mills Shares fell on Tuesday despite the firm reporting strong results for the quarter that ended in March. Brokerages see moderating growth and expensive valuations for the company. 

What Happened: Phoenix Mills in its fourth quarter reported a net profit growth of 32.6% year on year to ₹388.79 crore. Revenue increased by 79.13% to ₹1305.94 crore. EBITDA gained by 46% from the previous year to ₹627 crore in the quarter. Total consumption in the quarter jumped 28% to ₹2833 crore. 

The board also declared a dividend of ₹5 per equity share. 

See Also: Railway Stock Jumps 4% As Profit Soars 34% In Q4

Brokerage Views: Kotak Institutional Equities maintained their "reduce" call and raised the target price to ₹2700. The brokerage reasoned that the scrip at current valuations is expensive and will look for a better entry point. Kotak is also concerned about moderation in same-store consumption, which includes low-single-digit growth in its top three malls. 

Its top three malls are Phoenix Palladium Mumbai, Phoenix Market City Bengaluru and Phoenix Market City Pune had a growth of 4%,4% and 5%, respectively, in FY2024.

Motilal Oswal maintained a "neutral" rating on the stock with a target price of ₹3220. According to Motilal Oswal, the company's growth will taper down in FY26-27 due to the lack of completion of major new malls. However, the brokerage remains confident in the long-term consumption growth trend. 

Citi reiterated its "buy" call on the stock and hiked the target price to ₹3885. The global brokerage said the company remains its top pick within India's property space. While the company reported decent consumption growth, the pipeline for the company also remains healthy, said the brokerage. 

Price Action: Shares of Phoenix Mills were down 3% at ₹3,011.90 in the early morning session on Tuesday.

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