Shares of Phoenix Mills fell 3% after Nomura initiated coverage with a ‘Reduce’ rating and a target price of ₹1,400. As of 9:26 AM, the shares were trading 3.36% lower at Rs 1,521.80.
The brokerage flagged concerns over cooling consumption trends, slower revenue ramp-up from upcoming malls, and pricey valuations.
While Phoenix Mills is widely regarded as India’s leading organized mall operator—with solid operating metrics and strong asset quality—Nomura believes the next growth phase could be more tempered. The firm noted that the retail segment posted a sharp 40% CAGR between FY22 and FY25, driven by post-Covid recovery and new store additions. However, going forward, retail sales growth is projected to moderate to 9% CAGR by FY27 and 11% by FY30 as the base effect wears off.
Nomura also pointed to longer gestation periods for Phoenix’s under-construction malls in Indore, Pune, and Bengaluru. These assets are expected to contribute meaningfully only from FY28, limiting short-term earnings visibility.
Even though Phoenix enjoys high occupancy levels and steady annuity income, the brokerage feels that the current valuation leaves little room for disappointment. The stock is trading near peak historical multiples, and any earnings miss could lead to a pullback.
Still, Nomura acknowledged Phoenix’s long-term strength, citing its strong management team and growing presence in new markets. But in the near term, it believes the stock’s risk-reward profile looks stretched.
Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Stock market investments are subject to market risks. Always conduct your own research or consult a financial advisor before making investment decisions. Author or Business Upturn is not liable for any losses arising from the use of this information.
