Stock Of The Day: THIS Real Estate Can Surge 35% In Valuation, Motilal Oswal Shares Revised Target Price

Stock Of The Day: Implementation of measures to accelerate growth, healthy traction in consumption, and long-term acquisition plans will help The Phoenix Malls Limited to unlock their valuation, according to Motilal Oswal. The real estate stock may see a sharp 35% surge in valuation, noted the brokerage in its report on Tuesday.

Phoenix Malls shares were trading 4.75% higher at Rs 1589 per share on BSE with a market capitalisation of Rs 56,815.64 crore. The stock had touched an intraday high mark of Rs 1589 per share and had opened at Rs 1539.55 apiece.

The company had recently announced that its subsidiary Pallazzio Hotels & Leisure Limited ('Pallazzio') had executed Security Subscription and Shareholders' Agreement with JSW Neo Energy Limited and O2 Renewable Energy XXX Private Limited ('O2 Renewable XXX') ('SSSA').

Phoenix Mills Share Price Outlook

Phenix Mills is constantly focusing on accelerating consumption at mature malls. These initiatives are likely to help in trading occupancy and retaining healthy traction in consumption.

"The company's acquisition of the remaining 49% stake in Island Star Mall Developers (ISMDPL) strengthens its high-quality retail asset portfolio, unlocking long-term value. The transaction is expected to be earnings-accretive from year one with significant upside as rental income stabilizes and the 2.71msf incremental FSI potential is developed over the medium term. Staggered payments over three years will keep the net debt-to-equity ratio below 0.4x for the next two years," noted Motilal Oswal in its report.

There is a slump in revenues due to ongoing revamps in cities like Bengaluru, Pune, etc. However, the Phoenix Mills management remains optimistic about the long-term performance, projecting strong growth from FY27 onward once the revamps are completed.

The brokerage estimates a "21% CAGR in retail rental income over FY25-27E to reach INR28b by FY27E and total income to reach INR39b". The growth will be led by the expansion of Phoenix Palladium (0.35msft) and the completion of strategic acquisitions.

Phoenix Mills Share Price Target

Motilal Oswal has given a 'buy' rating to Phoenix Mills stock, indicating a 35% upside in its valuation. "We upgrade our rating to BUY with a revised TP of INR2,044 (earlier INR1,673), implying upside potential of 35%," stated Motilal Oswal in its report on 2 September.

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