Emkay upgrades Phoenix Mills to Buy with Rs 2,300 target on retail growth

Emkay Global has upgraded Phoenix Mills to Buy from Reduce and set a target price of Rs 2,300 a share, citing strong growth in retail consumption at the company's malls. The brokerage's call was published on 2 November 2026. It follows the company's results for the quarter ended 30 September 2026. The stock was trading at around Rs 2,007 when the call was reported.

What the quarter showed

Consolidated net profit for the July to September quarter was about Rs 424 crore, up about 11% on a total-profit basis. Profit attributable to owners of the parent was Rs 325.71 crore, up 7% from Rs 303.99 crore a year earlier. The difference between the two growth rates reflects the share of profit that belongs to minority shareholders in subsidiaries.

Consolidated revenue was Rs 1,153 crore, up 3%. Consolidated EBITDA was Rs 710 crore, up 7%, at a margin of 61%. Revenue from annuity businesses, which include leased retail space, rose 16% to Rs 1,055 crore, and annuity EBITDA rose 21% to Rs 669 crore. Retail rental income increased 15% to Rs 605 crore.

Retail consumption, the sales recorded by tenants in the company's malls, was Rs 4,685 crore in the quarter, up 25%. For the first half of the financial year, it was Rs 9,415 crore, up 28%. Net debt to EBITDA stood at 1.2x as of 30 September 2026, unchanged from the earlier period. The average cost of borrowing was 7.66% in September 2026.

On a standalone basis, the company reported a net profit of Rs 127.14 crore for the quarter. This figure includes a one-time exceptional charge of Rs 12.15 crore linked to the settlement of a subsidiary dispute.

Why the brokerage upgraded

Emkay raised its earnings estimates for fiscal years 2027 to 2029 by 4%. It also raised the multiple it applies to the retail business from 20 times to 22 times. The brokerage said its view rests on confidence in the company's ability to manage its land pipeline, secure favourable lease renewals and improve occupancy. It described October 2026 demand data as a positive indicator.

Other published targets for the stock include Rs 2,000 from HSBC and Rs 2,030 from Motilal Oswal, the latter based on a sum-of-the-parts valuation. Emkay's Rs 2,300 target sits above both.

Palladium, expansion and corporate steps

At Phoenix Palladium in Lower Parel, the company plans to add another floor and around 100 stores. According to the company's earnings call transcript, about 60% of the leasing for the new block is complete, and rentals are expected to be above Rs 500 per square foot per month for that block.

The company said it has identified 10 potential new locations, including Hyderabad, the National Capital Region, Navi Mumbai, Goa, Jaipur, Visakhapatnam and Nagpur. It described these as part of a longer-term plan rather than near-term commitments.

The National Company Law Tribunal approved a selective capital reduction at Island Star Mall Developers on 27 October 2026. The company said that once the reduction is completed, expected in November 2026, its stake would rise from 58.33% to 68.1%. Separately, a scheme under which six step-down subsidiaries become part of Astrea Real Estate Developers Private Limited has been approved by the tribunal.

What investors will watch

The brokerage's rating rests on retail growth, and the same growth could be hit by a wider slowdown. A slowdown in consumer spending would reduce footfall and sales at malls. Higher interest rates would raise borrowing costs. Investors will look at whether retail trends hold through the festive season and whether leasing at Palladium moves ahead as planned. They will also watch completion of the subsidiary capital reduction in November 2026, which the company's filing links to a payment of Rs 1,350 crore due within 30 days.