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We maintain REDUCE on Phoenix Mills (PHNX) with an unchanged TP of Rs2,050 (SOTP-based), implying EV/EBITDA of 25x on Jun-28E EBITDA. PHNX reported healthy 1QFY27 results, with retail consumption growing 32% yoy. Retail rental income and EBITDA grew 17% yoy each. Consumption growth was seen across categories and assets, with mature assets (excluding Mall of Asia, Millennium, and Palladium Ahmedabad) witnessing 23% yoy growth. The commercial portfolio is ramping up well, with revenue and EBITDA up 44% and 31% yoy, respectively. Portfolio expansion remains on track, with two greenfield malls (Kolkata and Surat) expected to be completed by CY27 and another three (Thane, Chandigarh, and Coimbatore) by CY30, providing growth visibility. We believe the current valuation adequately captures growth potential, leaving limited room for further upside.

1QFY27 snapshot Retail:

In 1QFY27, consumption stood at Rs47.3bn (+32% yoy). Rental revenue stood at Rs5.9bn (+17% yoy), while EBITDA stood at Rs6.2bn (+17% yoy). Retail rental to consumption stood at 12.6% (12.9% in 4QFY26 and 14.1% in 1QFY26). Commercial: Total income stood at Rs0.75bn (+44% yoy), led by ramp-up of new assets. EBITDA at Rs0.42bn grew 31% yoy. Hospitality: Total income grew 18% yoy to Rs1.5bn, led by ARR growth of 13% across both properties. EBITDA stood at Rs0.6bn (+19% yoy). Residential: Sales declined 57% yoy to Rs0.64bn. Financial: Revenue stood at Rs10.7bn (+13% yoy). EBITDA grew 14% yoy to Rs6.4bn, with EBITDA margin at 60%. PAT at Rs2.9bn grew 23% yoy. Net debt increased by Rs5bn qoq, coming in at Rs36.6bn in 1QFY27. Net debt-to-EBITDA stood at 1.3x.

Healthy growth in retail; commercial ramping up well

Consumption growth for PHNX was seen across categories: Fashion – +24% yoy; Jewelry – +55% yoy; Electronics – +61% yoy; F&B – +26% yoy; Others – +31% yoy. All assets saw strong growth, with mature assets (excluding Mall of Asia, Millennium, and Palladium, Ahmedabad) witnessing 23% yoy growth. Tenant remix (premiumization) and more experiential offerings supported consumption and rental growth across assets. Momentum in consumption growth is expected to sustain, per management. Office segment is ramping up well, with 90% occupancy expected by FY27-end (currently 72%).

Expansion plans on track Retail:

The Kolkata (1msf) and Surat (1msf) malls are expected to be operational in CY27. Leasing stands at 90% for Kolkata and 50% for Surat. The company received permission for Phase 3 development at PMC, Bengaluru (1.2msf commercial, 0.6msf retail, and a 300-key hotel). Another three greenfield malls (Thane, Chandigarh, and Coimbatore) are expected to be completed by CY30. Commercial: Project Rise (1.5msf) is expected to be completed by CY28, with pre-leasing already started. Residential: PHNX will launch a 1.2msf residential project in Kolkata by CY27-end or early-CY28.

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