Phoenix Mills stock rallies 5% as Motilal Oswal upgrades to buy, sees 35% upside- Grow Mudra

Phoenix Mills stock rallies 5% as Motilal Oswal upgrades to buy, sees 35% upside

02 Sep , 2025 By : Debdeep Gupta

Shares of mall operator and real estate player The Phoenix Mills rallied nearly five percent in trade on Tuesday, September 2, after domestic brokerage Motilal Oswal upgraded the counter to 'buy,' citing a strong growth outlook.

The broking house upgraded its rating on the stock, while hiking its target price to Rs 2,044, which indicated a 35 percent upside from current levels. At 9.55 a.m., shares of the firm were quoting Rs 1,583.7, higher by 4.4 percent.

During FY15-25, Phoenix Mills' retail portfolio witnessed an 11 percent CAGR in consumption, supported by ~7 percent like-for-like growth in the existing malls and the opening of new malls in Lucknow, Indore, Ahmedabad, Pune, and Bengaluru. Additionally, retail rental income clocked a similar 12 percent CAGR during this period, mirroring the consumption growth.

Going ahead, Motilal Oswal anticipates this positive growth trend to continue, primarily driven by the ramp-up of new malls. The brokerage estimated a 21 percent CAGR in retail rental income over FY25-27E to reach Rs 2,800 crore by FY27E and total income to reach Rs 3,900 crore.

While new malls continue to ramp up well, the firm is implementing measures to accelerate consumption at mature malls. These initiatives, along with a further increase in trading occupancy, will help Phoenix Mills sustain healthy traction in consumption.

Further, the company continues to diversify and expand its office portfolio within its existing mall properties across key locations. Notable developments include office spaces at malls in Bengaluru (1.2msf), Chennai (0.4msf), and Palladium Mumbai (1.1msf).

"Additionally, newly launched malls in Pune (1.2msf) and Bengaluru (1.2msf) are also contributing to the growth of Phoenix Mills' office segment. These strategic expansions highlight the firm's commitment to increasing its office presence in high-demand urban areas," said Motilal Oswal.

Motilal Oswal also said Phoenix Mills’ acquisition of the remaining 49 percent stake in Island Star Mall Developers (ISMDPL) will strengthen its premium retail portfolio and unlock long-term value. The deal is expected to be earnings-accretive from the first year, with further upside as rental income stabilizes and the 2.71 msf incremental FSI potential is developed over the medium term. Staggered payments over three years are likely to keep the net debt-to-equity ratio below 0.4x for the next two years.