Phoenix Mills Shares Surge 5% After Motilal Oswal Upgrades Rating to ‘Buy’

Shares of Phoenix Mills saw a robust 5% surge on Tuesday, reaching an intraday high of Rs 1,597.30 on the BSE. This significant rally was fueled by domestic brokerage firm Motilal Oswal's decision to upgrade the stock to a ‘buy’ rating. The brokerage also revised its target price to Rs 2,044, up from Rs 1,673, indicating a 35% upside potential.

Motilal Oswal's note stated, “We upgrade our rating to BUY with a revised TP of INR2,044 (earlier INR1,673), implying an upside potential of 35%.” This positive outlook is based on Phoenix Mills’ strong operating performance across its retail, office, and hospitality segments.

The brokerage highlighted the company’s successful ramp-up of new malls and the implementation of measures to boost consumption at mature malls. These initiatives, combined with a further increase in trading occupancy, are expected to sustain healthy traction in consumption. Motilal Oswal noted, “While new malls continue to ramp up well, PHNX is implementing measures to accelerate consumption at mature malls. These initiatives, along with a further increase in trading occupancy, will help PHNX sustain healthy traction in consumption.”

Another significant factor is Phoenix Mills’ acquisition of the remaining 49% stake in Island Star Mall Developers (ISMDPL). This acquisition strengthens its high-quality retail asset portfolio, unlocking long-term value. The deal is expected to be earnings-accretive from the first year, with meaningful upside as rental income stabilizes and incremental development potential unfolds.

Motilal Oswal reported that Phoenix Mills’ retail portfolio achieved an 11% CAGR in consumption over FY15–25, driven by new mall additions in key cities such as Lucknow, Indore, Ahmedabad, Pune, and Bengaluru. The brokerage projects a 21% CAGR in retail rental income over FY25–27E, reaching Rs 28 billion by FY27E, with total income projected at Rs 39 billion.

In the office space segment, Motilal Oswal expects significant growth. By FY27, in a phased completion, the portfolio is projected to increase nearly fourfold, reaching 7.1 million square feet. This growth will boost rental income to Rs 6 billion by FY27, representing a 71% CAGR over FY25-27 or a 3x increase.

The hospitality segment also shows strong potential. Phoenix Mills’ flagship property, St. Regis in Mumbai, has seen improved operating performance. Projects in Bengaluru and other cities are expected to expand the hospitality portfolio to 1,800 keys from the current 588 keys. Motilal Oswal stated, “This will triple its hospitality portfolio to over 1,800 keys.”

Overall, Motilal Oswal’s bullish view on Phoenix Mills is underpinned by its diversified portfolio across retail, office, and hospitality assets, strong growth visibility, and accretive acquisitions, which are expected to drive long-term value creation.