Summary
The Phoenix Mills Limited - Q3 FY26 Earnings Call Summary Thursday, January 29, 2026 11:55 AM IST
Event Participants
Executives 4 Kailash Gupta (CFO), Rashmi Sen (COO - Retail), Shishir Shrivastava (Managing Director), Varun Parwal (Investment Director)
Analysts 4 Gaurav Khandelwal (J.P. Morgan), Girish Chaudhary (Avendus Spark), Murtuza Arsiwalla (Kotak Securities), Puneet (HSBC)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Consolidated Revenue | ₹1,121 crores | +15% YoY; Driven by strong festive demand and execution across segments. |
| Consolidated EBITDA | ₹656 crores | +19% YoY; Reflects operating leverage; EBITDA margins improved due to hospitality. |
| Net Profit | ₹276 crores | +4% YoY; Impacted by higher tax rates as hospitality tax shields were exhausted. |
| Retail Consumption | ₹4,992 crores | +25% YoY; Led by Phoenix Mall of Asia (+112%) and broad-based demand. |
| Retail Rental Income | ₹573 crores | +13% YoY; Lagging consumption due to fixed-rent structures in new malls. |
| Hospitality Income | ₹423 crores | +8% YoY; Driven by ADR growth at St. Regis Mumbai (₹20,000+). |
| Residential Sales (9M) | ₹412 crores | Steady demand for premium projects like One Bangalore West and Kessaku. |
| Net Debt | ₹3,344 crores | Net Debt to Annualized EBITDA at 1.3x; Average cost of debt reduced to 7.62%. |
| Liquidity | ₹1,858 crores | Includes cash and cash equivalents to support ongoing CAPEX and ISML buyout. |
Geographic & Segment Commentary
- Retail Portfolio: Consumption reached ₹12,327 crores in 9M FY26, nearly matching the full-year FY25 figure. Growth was led by Phoenix Mall of Asia (Bengaluru) and Phoenix Palladium (Mumbai), with significant upgrades underway at MarketCity centers in Pune and Mumbai to premiumize the tenant mix.
- Commercial Offices: Scaled to 5 million sq. ft. across four cities, with 1.2 million sq. ft. leased in FY26 YTD. Stabilized assets in Mumbai and Pune reached 76% occupancy, while new assets are transitioning to the rental monetization phase starting FY27.
- Hospitality: St. Regis Mumbai achieved 85% occupancy with EBITDA margins at 45% (+300 bps YoY). The segment is benefiting from a shift toward higher-yielding retail-led demand and large-scale events.
- Residential: Pricing for premium luxury units exceeded ₹29,000 per sq. ft. Management expects ₹180 crores in revenue recognition in Q4 FY26, subject to registration completions in Bengaluru.
Company-Specific & Strategic Commentary
- Asset Transformation: Active “repositioning” of legacy assets (PMC Bangalore/Pune) involves churning low-productivity hypermarkets into flagship stores, resulting in a 23% YoY increase in trading density at PMC Bangalore (₹3,011 pspm).
- CPP Transaction: Completed the first tranche of the ISML partner buyout for ₹1,257 crores in November 2025, increasing the company’s stake to 58.33%.
- Strategic Marketing: Reduced retail marketing spend by 15% in Q3 while increasing effectiveness through influencer-led strategies and sponsored activations like “Armani’s Diwali Decor.”
- Experiential Integration: Launched Phoenix Racquet Club at Palladium Mumbai and “Gourmet Village” dining concepts to increase dwell time and repeat visits; these are being rolled out across the portfolio.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Retail Growth | Double-digit growth | FY26 visibility remains high due to healthy retailer performance and ongoing upgrades. |
| Trading Occupancy | 94%-95% | Target for PMC Bangalore and Pune by middle of FY27 (up from ~86% currently). |
| Commercial Monetization | Meaningful contribution | Newer office towers (Pune, Bangalore, Chennai) to start contributing to cash flow from FY27. |
| Future Pipeline | Launch pipeline through 2030 | Secured through land acquisitions in Thane (1.5 mn sq. ft. mall) and Kolkata Residential. |
Risks & Constraints
| Risk | Context |
|---|---|
| Rent-Consumption Lag | Management noted 11% rent-to-consumption ratio (historical low); while consumption scales fast, rent repricing often lags until renewals or revenue-share triggers. |
| Taxation Headwinds | Effective tax rate rose to ~24% as hospitality losses were fully utilized; CFO guided to a 22-23% sustainable range going forward. |
| Execution Risk | Large-scale upgrades (e.g., 19% of PMC Pune GLA under transformation) may cause temporary trading occupancy dips before stabilizing in FY27. |
Q&A Highlights
Consumption vs. Rental Divergence
- Question: Why is rental growth (13%) lagging consumption (25%), specifically at Mall of Asia? (Puneet, HSBC / Pritesh, Axis)
- Answer: Structurally, fixed rents kick in first while consumption scales. In Q3, high-density categories like jewellery (39% growth) have lower rent-to-consumption ratios. Management expects convergence over 3-5 years as revenue-share triggers are hit (Varun Parwal).
Asset Repositioning & Pricing
- Question: What is the MTM opportunity for the 50% of the area coming up for renewal? (Girish Chaudhary, Avendus Spark)
- Answer: Historically, renewals/churn have delivered 20-30% rental improvements. In PMC Bangalore, repricing 35% of the area led to a 35-40% increase in fixed rents (Varun Parwal).
New Project Timelines
- Question: What is the status of the Thane and Kolkata developments? (Puneet, HSBC)
- Answer: Thane is in final approval stages (environmental clearance); demolition of old structures has begun. Kolkata residential launch is expected within the next two quarters (Varun Parwal).
Key Takeaway
The Phoenix Mills Limited delivered a robust Q3 FY26, characterized by 25% YoY consumption growth (₹4,992 crores) and 19% EBITDA growth (₹656 crores), signaling strong operating leverage. The retail portfolio’s productivity is being enhanced through an aggressive repositioning strategy, notably at PMC Bangalore where trading density rose 23% following a brand refresh. While rental growth currently lags consumption due to high-value category mix and new mall stabilization (Mall of Asia at 88% occupancy), management expects convergence by FY27. Strategically, the company is pivoting toward mixed-use “districts,” with significant office leasing (1.2 mn sq. ft. YTD) and hospitality margin expansion (45% EBITDA margin). Despite a higher effective tax rate as hotel tax shields expire, the company maintains a lean balance sheet (1.3x Net Debt/EBITDA) and is well-positioned to monetize its 5 million sq. ft. office portfolio and upcoming Thane development in the medium term.
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