Motilal Oswal Upgrades Phoenix Mills: A 35% Upside Potential
Motilal Oswal Financial Services has upgraded Phoenix Mills from 'neutral' to 'buy', projecting a significant 35% upside potential. The brokerage firm highlights the company's robust growth trajectory driven by new mall openings and strategic acquisitions.
Phoenix MillsMotilal OswalReal EstateStock MarketRetail PortfolioReal Estate NewsSep 02, 2025
Motilal Oswal is optimistic about Phoenix Mills' future growth, attributing it to the commissioning of new malls and the company's efforts to enhance consumption at mature malls. These initiatives, combined with an increase in trading occupancy, are expected to drive healthy traction in consumption and rental income.
The acquisition of the remaining 49% stake in Island Star Mall Developers is another significant move that will strengthen Phoenix Mills' high-quality retail asset portfolio, unlocking long-term value. The brokerage firm believes that this strategic move will bolster the company's position in the retail sector.
Phoenix Mills' retail rental income is projected to grow at a Compounded Annual Growth Rate (CAGR) of 21% over the financial years 2025-2027, reaching ₹2,800 crore by FY27. Over the past decade (FY15-25), the company's retail portfolio has seen a 11% CAGR in consumption and a 12% CAGR in rental retail income. This positive growth trend is expected to continue, primarily driven by the ramp-up of new malls.
As of the June quarter, trading occupancy stood at 89%, down slightly from 91% in March 2025. Motilal Oswal attributes this decline to ongoing revamps and tenant churn in certain mature assets. For instance, in Bengaluru, around 10% of the leasable area is under fit-outs or being repurposed from hypermarkets to high-performing fashion anchors. Similarly, in Pune, outdated anchors and restaurants are being replaced with more relevant offerings.
Phoenix Mills' management is optimistic about the long-term performance, projecting strong growth from FY27 onwards once the revamps are completed. The recently commissioned malls in Lucknow, Indore, and Ahmedabad have achieved an average trading occupancy of 94% within six to eight quarters of operation. The company aims to sustain this performance with its existing malls and replicate it in upcoming malls in Gujarat and Kolkata.
Further expansions at Phoenix Palladium in Mumbai, expected to launch by FY26-27, and the acquisition of 22.1 acres in Coimbatore and Chandigarh Mohali in FY25, are set to more than double Phoenix Mills' portfolio by FY30, according to Motilal Oswal.
In addition to its retail portfolio, Motilal Oswal projects significant growth in Phoenix Mills' office portfolio. By FY27, in a phased completion, the portfolio is expected to increase nearly fourfold, reaching 7.1 million square feet. This growth will boost rental income to ₹600 crore by FY27, representing a 71% CAGR over FY25-27 or a 3x increase. This trajectory underscores the company's confidence in the long-term demand for office spaces within its mall-based developments.
The hotel segment is also set to benefit from strong momentum. Phoenix Mills' flagship hotel, St. Regis, has seen a significant improvement in operations due to demand tailwinds. The company is also developing a 400-key premium hotel, Grand Hyatt, at its MarketCity mall in Bengaluru, expected to be completed in FY27-28 with an estimated capex of ₹1,000 crore. The third phase of PMC Bengaluru will see another hotel with 300 keys, and Phoenix Citadel in Indore will also see a 300-key hotel, currently in the planning stage.
The company has also acquired a 11-acre land parcel in Thane in FY24, with the project likely to include another premium hotel. This will triple its hospitality portfolio to over 1,800 keys, with 588 keys currently operational.
Of the 17 analysts covering Phoenix Mills, 14 have a 'buy' rating, one has a 'hold' rating, and two have a 'sell' rating. Shares of Phoenix Mills Ltd. gained over 4% in early trade on Tuesday, reflecting the market's positive sentiment towards the company's growth prospects.
Frequently Asked Questions
What is the new price target for Phoenix Mills as per Motilal Oswal?
Motilal Oswal has set a new price target of ₹2,044 per share for Phoenix Mills, up from ₹1,646, indicating a 35% upside potential.
What is the projected CAGR for Phoenix Mills' retail rental income over FY25-27?
Phoenix Mills' retail rental income is projected to grow at a CAGR of 21% over FY25-27, reaching ₹2,800 crore by FY27.
What significant acquisition has Phoenix Mills made recently?
Phoenix Mills has acquired the remaining 49% stake in Island Star Mall Developers, strengthening its high-quality retail asset portfolio.
What is the expected growth in Phoenix Mills' office portfolio by FY27?
By FY27, Phoenix Mills' office portfolio is projected to increase nearly fourfold, reaching 7.1 million square feet, boosting rental income to ₹600 crore.
What new hotels is Phoenix Mills developing?
Phoenix Mills is developing a 400-key Grand Hyatt hotel in Bengaluru, a 300-key hotel in the third phase of PMC Bengaluru, and another 300-key hotel at Phoenix Citadel in Indore.
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