Phoenix Mills, a prominent real estate developer, marked a remarkable milestone as its stock surged by approximately 6% to reach a record high of Rs 2,060 on the National Stock Exchange on October 13. This notable ascent marked the fourth consecutive day of gains, and the company secured its position as the top gainer on the Nifty realty index.
The recent upswing in Phoenix Mills’ stock price can be attributed to a series of factors. Notably, the company provided a positive business update for the July-September quarter, sparking optimism about strong Q2 results. Additionally, the “overweight” rating from Morgan Stanley added further impetus to the stock’s performance.
JM Financial has expressed confidence in Phoenix Mills, issuing a “buy” call with a target price of Rs 2,010.
Q2 Highlights
Phoenix Mills reported impressive numbers for the September quarter. The company’s estimated retail collections witnessed a substantial year-on-year increase of 23%, amounting to Rs 638 crore. The total retail consumption also surged by 20%, reaching Rs 2,637 crore, according to the company’s update.
Furthermore, Phoenix Mills’ residential, hospitality, and commercial businesses displayed robust performance, contributing to the company’s positive outlook.
Morgan Stanley’s “preferred” stock
Given the 19% year-on-year growth in total consumption, totaling Rs 5,211 crore in H1FY24, Phoenix Mills stands out as Morgan Stanley’s “preferred” stock in India’s property sector. The foreign brokerage firm has set a target price of Rs 2,200 for the stock, indicating a potential upside of nearly 7% from its 52-week high of Rs 2,060.
Morgan Stanley anticipates that Phoenix Mills will continue to deliver strong growth in H2FY24. The firm expects sustained rental growth to drive a 20% increase in income for this residential and retail space developer.
Future Growth Prospects
Analysts point to Phoenix Mills’ upcoming retail and office space projects as potential catalysts for the company’s growth. These projects are expected to complement the company’s overall expansion strategy.
In the previous quarter, ending on June 30, 2023, Phoenix Mills reported a notable 41.28% year-on-year increase in revenue, reaching Rs 811 crore. However, the net profits witnessed a 61.30% year-on-year decline, amounting to Rs 291 crore. Notably, the company’s operating profit margins expanded by 500 basis points on a yearly basis, reaching 61%.
As of 2:06 pm, the stock was trading around 4% higher, at Rs 2,018.40 on the National Stock Exchange. Phoenix Mills continues to draw investor attention with its impressive performance and positive outlook.
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