Source: Company website
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BL companies
Among the key beneficiaries of the recovery in the economy post-Covid are those players focused on the commercial real estate side.
Companies with strong presence across several large cities in India and operating in the retail, offices and hospitality businesses have thrived.
Phoenix Mills is one such key player that leases out spaces for retailing firms, companies and operates in the hospitality industry as well. It also has an upcoming residential business, which is in the luxury category and is often housed in adjacent campuses to its commercial spaces.
At ₹1,628, the stock trades at 26 times its likely per share earnings for FY27, making it a healthy bet for investors with a two-three-year perspective, given the relative valuation comfort and strong business prospects. Companies such as Prestige Estates (triple-digit price-earnings multiples) and DLF (30 times forward earnings) trade at more expensive valuations. The BSE Realty trades at a PE multiple of over 49 times.
Healthy growth in its core businesses, steady rental incomes, robust occupancies and improving traction in its premium residential segment are positives for the company.
Over the period FY22-25, Phoenix Mills saw revenues grow at 37 per cent compounded annually to ₹3,814 crore in FY25. During the three-year period, net profits rose at a CAGR of 60.6 per cent to ₹984 crore in FY25. Over FY22-25, EBITDA grew at 43.3 per cent to ₹2,161 crore.
The company’s EBITDA margins are among the best in the industry, at nearly 57 per cent in FY25.
Delivering on multiple fronts
As indicated earlier, the core of Phoenix Mills’ business comprises retail, office spaces and hospitality. These segments collectively account for nearly 92 per cent of the company’s revenues with retail being the mainstay.
It has delivered 20 million sq ft till FY25 and has a robust pipeline running up to 2027-30.
Overall, the company has operations in eight Indian cities including Mumbai, Bengaluru, Chennai, Pune, Ahmedabad, Lucknow, Indore and Bareilly.
Some of its popular and large properties include Phoenix Palladium Mumbai, Phoenix Market City in Bengaluru and Pune, and Phoenix Market City and Palladium in Chennai.
The company operates on a mixed-use basis in many of its locations. For example, retail plus office are available in Phoenix Mall of Asia and Phoenix Asia Towers Bengaluru. In Chennai, there is a combination of retail plus office plus residences in Phoenix Market City, Palladium, One National Park and Crest. Retail plus Office plus Hospitality are available in Phoenix Palladium, Project Rise and The St. Regis, Mumbai.
This mixed use ensures that Phoenix Mills is able to generate revenues from multiple streams with optimal use of available space.
Typically, the company operates large malls and leases out spaces to premium retail outlets. High-end fashion and accessories outlets are the company’s main client base. Other retail outlets leasing spaces from the company include jewellery, electronics, food & beverages, among a few others.
Occupancy levels were at 89 per cent, as of June. It is a tad lower than the previous year, as the company is consciously looking to churn, resize and relocate brands to ensure high-performing ones are part of its portfolio. The target is to have premium and luxury brands in prime and high-footfall zones.
Phoenix Mills hopes to increase the occupancy levels to 95 per cent in the coming quarters.
A report from Redseer Strategy Consultants projects the Indian retail market to exceed $1.6 trillion by 2030. This presents a strong runway for growth in the case of companies such as Phoenix Mills.
In the hospitality segment, the company owns two premium hotels totalling 588 keys, including The St. Regis in Mumbai. The company is currently constructing the Grand Hyatt Bengaluru with around 400 keys. Overall, by 2027, the company is looking to have 988 keys in its hotel operations.
Commercial office spaces are set to grow from 3 million sq ft in 2025 to more than 7 million sq ft in 2027.
In the residential segment, the company operates in the luxury segment alone. Gross sales and collections are healthy in recent quarters. The average sales price per sq ft was around ₹27,000 in Q1FY26.
Robust financials
Phoenix Mills has a fairly healthy balance-sheet. The company had a debt-to-equity ratio of 0.4, as on June 30, which compares favourably with many large peers. Phoenix Mills has fairly healthy cash flows given its strong EBITDA margins. The net debt to EBITDA is healthy at 1.2x. The average cost of debt for the company fell from 8.81 per cent, as of March, to 7.92 per cent as of June.
Published on September 20, 2025