- Retailer Sales: INR11,344 crores, up 23% year on year.
- Retail Business EBITDA: INR1,672 crores, up 25% year on year.
- New Malls Rental Income: Approximately INR295 crores.
- New Malls EBITDA: Approximately INR256 crores.
- Gross Retail Collections: Approximately INR2,743 crores, up 27% over FY23.
- Q4 FY24 Consumption: Approximately INR2,833 crores, up 28% year on year.
- Q4 FY24 Rental Income: Grew by 31% over Q4 FY23.
- Q4 FY24 EBITDA: Grew by 28% over Q4 FY23.
- Commercial Office Income: Approximately INR190 crores, up 12% over FY23.
- Commercial Office EBITDA: Approximately INR110 crores, up 13% over FY23.
- St. Regis Mumbai Total Income: Over INR490 crores.
- St. Regis Mumbai EBITDA: Approximately INR223 crores, EBITDA margin of 46%.
- Courtyard by Marriott Agra Total Income: INR55 crores.
- Courtyard by Marriott Agra EBITDA: INR16 crores, EBITDA margin of 29%.
- Residential Business Gross Sales: Approximately INR566 crores.
- Residential Business Collections: INR646 crores.
- Residential Business Recognized Revenue: INR870 crores for FY24.
- Consolidated Income from Operations: Higher by 50% compared to FY23.
- Operating EBITDA: INR2,185 crores, up 44% over FY23.
- Profit After Tax: INR1,152 crores, up 60% over FY23.
- Consolidated Debt: INR4,366 crores, average cost of 8.8%.
- Net Cash Flow from Operations: INR2,162 crores.
- Operating Free Cash Flow: INR1,781 crores, up 27% over last year.
- Group Level Net Debt: Close to INR2,200 crores.
- PML Level Net Debt: INR1,560 crores as of March 31, 2024.
Release Date: May 18, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Phoenix Mills Ltd (BOM:503100, Financial) reported a strong operating performance with retailer sales at malls closing at INR11,344 crores, up 23% year on year.
- EBITDA from the retail business for the full year came in at INR1,672 crores, up 25% year on year.
- New malls contributed approximately INR295 crores in rental income and approximately INR256 crores in EBITDA for FY24.
- Phoenix Citadel Indore and Palladium Ahmedabad have achieved high occupancy levels of 91% and 86% respectively within a year of launch.
- The company has a clear roadmap to expand its operational portfolio to about 14 million square feet of retail, 7 million square feet of offices, and close to 1,000 hotel keys by 2027.
Negative Points
- Income from operations for Q4 FY24 and full-year FY24 have been slightly lower than Q4 FY23 and full year FY23 due to ongoing enhancements and demolitions.
- EBITDA margin as a percentage of rental income is lower in new malls during the initial period of occupancy ramp-up.
- The trading density at Phoenix Citadel Indore is lower at INR600 per square foot per month compared to other malls.
- Consolidated debt as of March 31, 2024, stands at INR4,366 crores with an average cost of roughly 8.8%.
- The company is still determining the best use for newly acquired land parcels in Thane and Bangalore, indicating some uncertainty in future development plans.
Q & A Highlights
Q: Congratulations on a great quarter, sir. Shishir sir, my first question is on the same-store growth of 8%. If you can help us understand a little bit more on how has been the trading occupancy impact on this 8% volume growth and inflation?
A: Thanks for the question, Parikshit. If you look at our operating assets, several of our Phoenix Marketcitys continue to be at the lag end of the tenure with bankers. So for example, Phoenix Marketcity, Bangalore and Phoenix Marketcity, Mumbai at -- are about -- Phoenix Marketcity, Pune, both have anchor space, which is about more than 52%. During the cycle of the malls' life, or the tenure of the contracts, we'll continue to see opportunities to make these malls more efficient. What I mean by that is moving away from being anchor-heavy depending on where you are in the life of that mall, what the customer aspirations are and bringing in a new brand mix and perhaps new categories. So we did this in Phoenix Marketcity Mumbai, and we've seen a significant, I would say, in 1, 1.5 years the numbers have played out and we demonstrate how the strategy has worked for us. So in several of our malls, we are now seeing that opportunity again in the next year and maybe 1.5 years. So that strategy will help boost consumption. So it's always important to refresh the category mix and brand mix. I think we took some hit at Lower Parel as I mentioned during my notes, during my opening remarks that with the Lifestyle block, being -- we generated close to INR25 crores, INR27 crores annual rent and significant consumption. We saw a drop in consumption in rent because the Lifestyle block was vacated and demolished to create a better experience for the ongoing development. We are doing some fantastic work at Phoenix Palladium Mumbai, in expansion. There is a host of new brands that we are in discussions with. These are definitely going to aid in improving both consumption and overall rental income for us. So it's -- I don't think we are seeing any structural issue here, which is causing consumption to, let's say, be at a stable consistent level or show non-demonstrate-grade growth. I think it's every mall in its life is -- has this opportunity of improvements every three to five years, and that's where we are in with several of our malls. So I think we are going to see this getting better.
Q: Sir, and guidance for next year, what kind of sales growth we are looking at?
A: Sorry, Parikshit, can you repeat what you're saying?
Q: For these malls, which are like operational, like-to-like basis, what kind of growth do you think we can forecast for FY25 versus 8% we have reported this year?
A: See, I don't want to -- I don't think it's fair to talk about FY25 alone. I would say one has to always look at a three-year CAGR and -- three- to five-year CAGR. And over a three- to five-year CAGR, I would estimate anywhere between 11%, 12% kind of a growth.
Q: And my second question is on Thane. So I mean you have acquired the land parcel. So any plans on what have you decided to do there? One of your competitors coming up with a hotel of 560-odd rooms keys. So any plans -- I mean, what are you looking to add there, do there in terms of -- you can help us in the mix understand as we commercial hospitalities what do you intend to do there?
A: Yes. I think -- well, we've not -- we don't -- we are not ready to announce what we're doing there yet because it's still not concluded. So we're going to take probably another two, three months to perhaps decide. But it's seeming to be a large mixture development with a combination of maybe some retail, some hotel. We are trying to really determine if resi is the right way to go. I think that's where the question really is what's the best use on this land. So we will be very, very happy to announce as soon as we've taken a decision.
Q: Just last thing on the residential piece. So now we have [seen] we are increasing our overall developable area there by FY27. So what kind of presales number do you think you can achieve on a more consistent and a steady basis so that, that portfolio, there's more visibility on growth. We didn't have any major launches besides the Bangalore one and it could still awaited. So how do you intend to build that portfolio over the next three, four years? And what kind of pieces do you think you can achieve in that segment in two years' time? More on the road map of three years -- next three years there?
A: With Calcutta, we've secured major approvals. This is going to be about 1 million-odd square feet of saleable area, right? We are awaiting -- we have applied for EC. So we are in the process of getting the approvals. I think we maybe about six to eight months away from launch on this asset, okay? The micro market there seems to be very, very strong and stable. Our primary research is showing rates in that micro market to be in excess of about INR18,000, INR20,000. We've already decided on what the product mix is going to be like in terms of the sizing of the apartments, configuration, et cetera. We have about INR350 crores to INR400 crores as our target in this year to sell the ready inventory, which we have in Bangalore between One Bangalore West and Kessaku. So I think that's a great target for us to chase another INR400 crores this year. We have -- total ready inventory is about INR1,200 crores, of which in this year, we are targeting about INR400 crores. We might -- we'll certainly work harder to deliver more than our target. We've taken some price hikes and the market has also accepted that well. And we're selling at about INR24,000 per square foot-plus plus compared to INR15,000-plus plus in 2019. I think this would be our guidance for FY25 that we're targeting to get about -- in to sell about INR400 crores.
Q: And more on the longer term, like three, four years, what kind of sales can this segment do for us like residential, can we use that INR2,000 crore number with the addition of more projects over the next two, three years?
A: So currently, we don't have any active plans on expanding on residential, Parikshit. We're not in any race to become a large residential developer. We have been very selective about the opportunities. And depending on the value at which we are able to buy land in mature, stable markets where absorption has been consistent, we will continue to look at those opportunities. But I
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
