Motilal Oswal Upgrades Phoenix Mills: A Promising 35% Upside in Real Estate
On September 2, Phoenix Mills Ltd. shares saw a significant boost, rising by more than 4% after Motilal Oswal Financial Services upgraded its real estate stock. The brokerage not only raised its rating from 'neutral' to 'buy' but also increased the price target by 24%. The new price target for Phoenix Mills is set at Rs 2,044, up from Rs 1,646, indicating a potential increase of approximately 35% over its earlier closing price of Rs 1,517.
Motilal Oswal emphasized that the opening of new malls will significantly drive Phoenix Mills' expansion well into FY27. The company is not only focusing on the rapid growth of new properties but is also making strategic changes to enhance the performance of its established properties.
Phoenix Mills' retail rental revenue is projected to grow at a compounded annual growth rate (CAGR) of 21% from FY25 to FY27, reaching close to Rs 2,800 crore by the end of FY27. Over the past decade (FY15-25), the company's retail portfolio has seen a 11% increase in consumption and a 12.2% growth in rent income, closely aligning with the trends in stocks to buy in 2025. Motilal Oswal anticipates that this upward trend will continue, driven largely by the expansion of recently opened malls.
In the first quarter of June, the average trading occupancy was 89%, slightly lower than the 91% reported at the end of March 2025. The recently opened malls in Lucknow, Indore, and Ahmedabad have already shown remarkable results, achieving an average occupancy of 94% within just six to eight quarters. Phoenix Mills aims to replicate this success with upcoming developments in Gujarat and Kolkata.
Additionally, expansions at Phoenix Palladium in Mumbai, set to begin in FY26-27, and the acquisition of 22.1 acres of land in Coimbatore and Chandigarh Mohali in FY25, will significantly expand the company's property portfolio. By the end of FY30, Motilal Oswal estimates that Phoenix Mills could triple its retail presence, making it a promising investment in the real estate sector.
