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					                 Company Update
                 Sector: Real Estate
                 BSE Sensex : 16,467
                                                                   PHOENIX MILLS                                                                             CMP Rs217
                                                                                                                                                             TP Rs265

                 ASSETS MODEL EVOLVING INTO EARNINGS MODEL                                                                                                   14 Sept. 2011
                 We believe Phoenix Mills (PHNX) is strategically poised to benefit from
                                                                                                                      Suman Memani +91-22-6618 6479
                 investments in subsidiaries/associate companies FY12 onwards. Triggers for
                 re-rating the stock:(a) Reduction in debt in all the Marketcity projects supported         
                 by rental income and monetization of commercial assets, especially the                               Abhishek Kumar +91-22-6618 6398
                 operational Pune project, Kurla and Bangalore Marketcity projects;                         
                 (b) Increase in stake in the Kurla and Bangalore Marketcity projects
                 transforming these entities from associate to subsidiary; (c) Associate
                 companies for Kurla and Bangalore Marketcity to contribute to the profit
                 from FY12. The mall and Phase-I of the Kurla commercial assets are likely
                 to start in Q3FY12; (d) Another subsidiary, BARE, has kick-started operations
                 with the commercializing of the Lucknow mall and Bareilly project is
                 expected to commence operations in Q4FY12.We maintain BUY and upgrade
                 our target price to Rs265 (from Rs240).
                 HSP- reshuffling in shops helping improve average rental: We expect average                          QUARTERLY SNAPSHOT                             (Rs mn)
                 rental in HSP to improve further from FY11 average realization level of Rs167-170
                 psf. Renegotiation with major anchor clients, opening of few new stores at higher-                                                    Quarter Ended
                 than-average rate and increase in footfalls from launch of the Shangri-La Hotel                                         Dec-10           Mar-11      Jun-11

                 (Q3FY12) in the Palladium would increase HSP revenue.                                                Net Sales                  451         468         471
                 Servicing of debt in Marketcity using operational revenue of SPVs: The D/E                           YoY Gr. (%)            49.3           35.7        16.4
                 ratio of all the three Marketcity projects is below 2x except for the Pune Marketcity                EBITDA                     327         321         331
                 (2.9x). We believe D/E of all the SPVs would reduce as all marketcity to start in                    EBITDA Marg. (%) 72.6                 68.6        70.3
                 Q3FY12 except Chennai. The Pune project is already operational and we expect
                                                                                                                      Adj. Net Profit            238         272         272
                 the Chennai project to commence operations in Q1FY13. Moreover, the Pune and
                 Kurla SPVs have monetized a part of their Phase-I commercial assets and we                           YoY Gr. (%)           133.3           73.0        49.1
                 expect reduction in debt to start off immediately.
                 Time is ripe to increase stake in the Bangalore and Kurla projects: In FY11,
                 Phoenix increased stake in the Pune and Bangalore projects. Going forward, we                        STOCK DATA
                 expect the company to increase stakes in the Bangalore and Kurla Marketcity projects
                                                                                                                      Market Cap                              Rs31.5bn
                 by buying out stakes from shareholders. The company may transform these associate
                                                                                                                      Book Value per share                    Rs111
                 companies to subsidiaries in future.
                                                                                                                      Shares O/S (F.V. Rs2)                   144.8mn
                 BARE likely to add 0.5msf by FY12: Phoenix holds 73.5% stake in BARE, which                          Free Float                              26.4%
                 has already commenced operation of the Lucknow project in FY11 and may                               Avg Trade Value (6 months)              Rs15.3mn
                 commence operations at the Bareilly project in Q4FY12 . We also expect repayment                     52 week High/Low                        Rs268/160
                 of debt in this SPV to commence soon which would help reduce consolidated debt.                      Bloomberg Code                          PHNX IN
                 Majority hospitality projects on hold: PHNX has put on hold all the hotel projects                   Reuters Code                            PHOE.BO
                 except the Agra project. Further, the company infused Rs200mn in FY11 in the
                 hotel projects, taking total investment to Rs3bn until date.
                 VALUATIONS AND RECOMMENDATION                                                                        PERFORMANCE (%)
                 We maintain a ‘BUY’ on the stock and upgrade our target price from Rs240 to                                               1M              3M          12M
                 Rs265 after assigning 15% discount (from 20% earlier) to NAV.                                        Absolute             1.9            13.5        (14.6)
                 KEY FINANCIALS (CONSOLIDATED)                                                         (Rs mn)        Relative             4.1            23.4           0.3
                                           FY09            FY10           FY11          FY12E           FY13E
                  Net Revenue                996          1,230           2,102          3,993           6,029
                  YoY Gr (%)                21.3            23.5           70.8            90.0           51.0        RELATIVE PERFORMANCE
                  Op. Profits                602            775           1,406          2,447           3,897
                                                                                                                                    PHNX                Sensex Rebased
                  OPM (%)                   60.4            63.0           66.9            61.3           64.6         280
                  Adj. Net Profit            767            620             842          1,570           2,316
                  YoY Gr (%)                79.3          (19.2)           35.8            86.5           47.5         250
                  KEY RATIOS                                                                                           220
                  Dil.EPS (Rs)               5.3             4.3            5.8            10.8           16.0
                  ROCE (%)                   4.4             3.2            4.1             6.4            8.3         190
                  RoE (%)                    5.5             4.0            5.1             9.0           12.1
                  PER (x)                   41.0            50.8           37.4            20.1           13.6
                                                                                                                         Sep-10    Dec-10        Mar-11     Jun-11     Sep-11
                  EV/ Net Sales (x)         40.3            32.6           19.1            10.0            6.7
                  EV/ EBITDA (x)            66.6            51.8           28.5            16.4           10.3
                                       PINC Research reports are also available on Reuters, Thomson Publishers and Bloomberg PINV <GO>
                    RESEARCH                                                                                       Phoenix Mills

                                  Pune Market city
SHAREHOLDING PATTERN              This subsidiary is operating as Vamona Developers Pvt. Ltd. In recent past, PHNX increased
Phoenix                   58.5%   stake in this SPV from 50% to 58.5%. This project covers 2.45 msf of which the retail
K2/Saffron                24.0%   portion is 1.2 msf and commercial space comprises 0.6 msf; parking area accounts for
Edelweiss                 4.0%    the remaining space.
MPC (Germany)             8.5%
                                  Repayment may start from FY13e: D/E of this subsidiary is 2.9x as of July’11 and total
Shariyan                  5.0%    debt of the project stood at Rs4.5bn. We believe the debt component is likely to reduce as
                                  the company has already started monetizing commercial assets of phase-I and generating
                                  rental income from the retail mall; it sold out 70% and collected Rs1bn. We expect rental
                                  income to be Rs317mn in FY12 and Rs1.4bn from sale of phase-I of commercial assets.
RETAILERS                         The company has so far spent Rs7.4bn and we expect it to further spend Rs200-300mn on
  Star Bazar                      commercial space. We believe that after FY13, this subsidiary would start paying dividend
  DLF Home                        to its shareholders. PHNX has so far invested Rs334mn in this subsidiary.
  Max                             Retail Mall: The mall is spread over 16.7 acres and covers approx 1.2 msf. The mall
  Mc Donalds                      started operations in Q1FY12 and has a total of 275+ stores of which 150 stores are in
  Marks Spencer                   operation. We expect rental income of Rs317mn in FY12 and Rs1.4bn in FY13 from the
  Zara                            Pune mall, which would help reduce debt of the SPV. Presently, 85% of the area has been
  Diesel                          pre-leased at an average rate of Rs60 psf/month.
  Mango                           Phase-II commercial assets-unlocking opportunity: We expect Phase-II commercial
  Pantaloon                       assets -0.35 msf to start construction in Q4FY12, which would require further investment
  Westside                        of Rs1-1.25bn for construction over the next three years. We believe rental inflow, besides
  PVR                             helping in reducing debt, would also help in meeting this additional funding requirement.
                                  We expect revenue of Rs2.5-3bn from the second phase of the commercial assets after
                                  completion of construction.
                                  Commercial office: The total area of the commercial Pune Marketcity mall is 0.6 msf of
                                  which Phase-I is approx 0.26 and Phase-II is 0.35 msf. The company has begun monetizing
                                  phase-I since last year and we expect total revenue of Rs1.7bn (70% sold out and collected
                                  Rs 1 bn) from phase-I, which is likely to be delivered in Dec’11. Average realization of the
                                  phase –I is Rs6,250 psf and the company has retained 30% which is likely to be sold out
                                  once the offices become operational. Phase-II construction is likely to begin from Q4FY12
                                  and we believe this is likely to be funded through rental income of retail assets and
                                  monetization of phase-I.

Pune Mall in Operation                                                                                                       2
                    RESEARCH                                                                                        Phoenix Mills

                                    Kurla Market City Project
SHAREHOLDING PATTERN                This associate company is operating under Offbeat Developers Pvt. Ltd.and PHNX has
Phoenix                    24.3%    maintained its stake at 24.3% in this Marketcity project. This project covers 3.2 msf of
Sujana Group Hyderabad     26.7%    which the retail portion is 1.3 msf and the commercial (Phase-I and Phase-II) is 1.15 msf;
Everstone Capital          22.4%    the rest comprises parking space.
IL & FS                    11.4%    Repayment of debts to start sooner: D/E ratio of this SPV is 1.75x (debt of Rs5.4bn).
HBS                        10.0%    We believe this will come down further owing to inflows from rental income (FY12E-
                                    Rs1.26bn at 85% occupancy) and monetization of commercial assets. The company sold
                                    60% of Phase-I and collected Rs800mn. We expect rental income of Rs335mn in FY12
                                    and Rs1.3bn in FY13.
RETAILERS                           Commercial Phase -II a potential opportunity: The company has so far spent Rs10.7bn
  Star Bazar                        in the Kurla SPV project and we believe it may incur further expenses of Rs 700-800 mn on
  DLF Home                          construction of commercial Phase-II covering 0.9 msf. We expect Phase-II to be completed
  Marks Spencer                     over the next 2-3 years which would unlock value for the Kurla SPV.
  Zara                              Expect PHNX to increase stake in this project in future: PHNX has so far invested
  Westside                          Rs470mn in the SPV and we believe that it is likely to increase its stake and may turn this
  Big Cinemas                       associate company into its subsidiary in the near future.
  Mothercare                        Retail portion is all set to be launched by Nov’11: The retail portion of the Kurla project
                                    is almost complete and we expect it to be launched by Nov’11.We expect this associate
                                    company to contribute Rs203mn to the bottom line in FY12
                                    Commercial portion: The company has 1.15 msf of commercial space. It has started
                                    selling 0.25 msf covering phase-I under the name of 15LBS. It has sold approximately
                                    60% of phase-I at an average realization of Rs8,000-8,500 psf . It has already collected
                                    Rs800mn and we expect this project to be fully operational by Dec’11 as the work is
                                    almost heading towards completion . Phase-II (0.9 msf) is under construction and is likely
                                    to be delivered over next 2-3 years. We believe monetization of the commercial assets will
                                    likely help this associate company become debt free.

To be operational in Q3FY12, 65% pre-leased at Rs90psf            Store fitouts in progress                                                                                                        3
                    RESEARCH                                                                                           Phoenix Mills

                                       Bangalore Projects
SHAREHOLDING PATTERN                   Substantial stake increase in Bangalore SPV:This is an associate company operating
Phoenix                      46.5%     under the name of Island Star Mall Developers Pvt. Ltd. in which PHNX increased its stake
Horizon                      26.0%     from 28% to 46.5% in the past one year. This Marketcity project covers 1.9 msf of which
IL&FS                        20.6%     retail comprises 0.9 msf, residential 0.65 msf and hotel 0.35 msf.
Edelweiss                     6.9%     D/E to reduce marginally till FY13: This SPV has D/E of 1.54x with debt of Rs3bn in the
                                       SPV and we expect D/E to reduce marginally by FY13. The rental from the retail mall is
                                       likely to be utilized for the residential project and repayment of debt. Phoenix has so far
                                       invested Rs337mn (incremental investment of Rs230mn in FY11) in this SPV. We expect
                                       PHNX to further increase its stake in this SPV and may turn this associate company into
RETAILERS                              a subsidiary post commencement of the residential projects. We believe that the valuation
  Future Group                         of other Marketcity projects works out better than the Bangalore Marketcity projects as
  Pantaloon                            complete repayment of debt here may take 3-4 years from now.
  Marks Spencer                        Retail mall: The retail portion of the Bangalore project is almost complete and we expect
  Home Town                            it to be launched in Sep-Oct’11.We expect this associate company to help contribute
  DLF Home                             marginally to the bottom line in FY12 and Rs231mn in FY13. The company has pre-leased
  PVR                                  60% at an average rate of Rs65 psf.
                                       Residential Portion: The company has a 0.35 msf residential project in this Marketcity.
                                       It is located on K.R Puram road where average selling price is Rs2,900-4,000 psf.
                                       Management expects construction to start in Q4FY12. Moreover, the company has one
                                       more parcel of land earmarked for the hotel project (0.35 msf) for which construction may
                                       start in FY13.

Mall to be operational by Sep-Oct’11                                 Top view of Escalators                                                                                                           4
                 RESEARCH                                      Phoenix Mills

                                         Mall 60% pre-leased

            Average rentals at Rs65psf                                                   5
                    RESEARCH                                                                                        Phoenix Mills

RETAILERS                          This is an associate company operating under two names: Classic Mall Development
  Star Bazar                       Company Pvt. Ltd. and Classic Housing Projects Pvt. Ltd. (residential). PHNX holds 31%
  West Side                        and 34% respectively in these projects. The Chennai Marketcity project covers 1.5 msf of
  Marks Spencer                    which the retail mall comprises 1 msf, residential Phase-I 0.25 msf, and residential Phase-
  Landmark                         II 0.25 msf.
  Pantaloon                        Debt likely to come down from FY13e: Total estimated cost for this particular SPV is
  Formats of Reliance              Rs4.75bn of which it already spent Rs4bn. D/E ratio for this project is 1.8x. We believe the
                                   company is likely to reduce debt in this SPV H2FY13 onwards as we expect
                                   commencement of the retail mall Q1FY13 onwards.
                                   Residential construction to be completed over the next three years: Work on the
                                   residential projects has not yet started and we expect the residential project to complete
                                   three years from now .We expect PHNX to increase stake at the beginning of the operation
                                   of the retail mall and may transform this from an associate company into a subsidiary.
                                   PHNX invested Rs527mn in FY11 as against Rs441mn in FY10.Incremental investment
                                   has been incurred in housing projects. This Marketcity mall is attractively valued and
                                   transforming it into a subsidiary would be positive for the company.
                                   Retail mall: The retail portion of the Chennai project is likely to be completed in Q1FY13
                                   and we expect the launch in the same period. We expect this associate company to
                                   contribute Rs214mn to the bottom linein FY13. The company has pre-leased 70% at
                                   average rate of Rs80 psf.
                                   Residential Portion: The residential project covers 0.5 msf of this Marketcity. It is located
                                   in Chennai Velachery where average selling price is Rs 6,000- 8,000 psf. Management
                                   expects to start construction in Q4FY12. We expect revenue of Rs3bn from this residential
                                   project with construction cost of only Rs0.8bn over the next three years, which is likely to
                                   help this SPV repay debt.

Mall to be operational by Q1FY13                                 Construction Work in Progress                                                                                                        6
                 RESEARCH                                      Phoenix Mills

                                         Mall 60% pre-leased

            Average rentals at Rs70psf                                                   7
                     RESEARCH                                                                                                                    Phoenix Mills

                                          BARE (Big Apple Real Estate Pvt. Ltd.)– a tier II opportunity
                                          BARE currently has a mall in operation at Lucknow and is developing two more malls at
                                          Agra and Bareilly covering a total area of 1.4msf. The company has invested Rs850mn in
                                          this step-down subsidiary and has maintained its stake at 73.5%.

 Projects under BARE
 Project Name     Location       Total Area     Retail      Commercial      Parking area     Estimated Project    Draw down         Spent till
                                   (msf)        (msf)          (msf)            (msf)          Cost (Rs mn)          Debt           July'11       Status
 Phoenix United   Lucknow           0.6          0.36                           0.24               1,200            1,050           All Spent     Operational
 Phoenix United   Agra              0.9           0.9                            0.2                                                              Not started
 Phoenix United   Bareilly          0.5           0.3          0.05             0.15               1,400             800            900           Q4FY12
Source: Company, PINC Research
                                          Repayment of debts:
                                          We believe that in case of the Lucknow mall (Upal Developers Pvt Ltd) where D/E is 3.7,
                                          repayment is likely to start FY12 onwards. In case of the Bareilly mall (Blackwood
                                          Developers), repayment would start after the retail mall becomes operational.
                                          BARE Valuation: We have changed our valuation pattern from book value to the NAV
                                          method except for the Agra mall (Gangetic Developers Ltd) where work has not yet started.
                                          Our valuation for BARE now stands at Rs10/share as against our earlier valuation of Rs5.2/

                                          Phoenix Hospitality
                                          The company has so far invested Rs3.0 bn in Phoenix Hospitality as against Rs2.80 bn in
                                          FY10. The amount is shown in balance sheet under Loans and Advances as the share
                                          applications have not yet been finalized. PHNX is holding 75% stake in Phoenix Hospitality
                                          which would be transferred from loans and advances to investment once allotment of shares
                                          is completed. This SPV has four hospitality projects and work is on hold at all the other
                                          projects except the Agra project which is likely to commence operation in Q3FY13.

                                              Phoenix Hospitality
                                              Prjoect name            SPV name                    Phoenix Stake            Status
                                              Kurla Hotel             Gracework Leisure                    69%             Unchanged since past 1 year
                                              ChennaiHotel            Surabhi Leisure                      33%             Unchanged since past 1 year
                                              Pune Hotel              Alliance Hospitality                 55%             Unchanged since past 1 year
                                              Agra Hotel              Gangetic Hotel                       50%             Likely to complete by Q3FY13

                                          Source: Company, PINC Research                                                                                                                                         8
                   RESEARCH                                                                                   Phoenix Mills

Shangri-La likely to start in Q3FY12
PHNX holds 53% stake in Shangri-La and its total investment stands at Rs750mn. D/E ratio for the Shangri-La hotel is 1.3x
and we believe it is likely to exceed 2x. At present, total debt stands Rs3.9bn and it has sanction limit of Rs5.3bn. We
believe debt of Shangri-La is likely to come down after 3-4 years. We expect Shanri-La to break even after 2-3 years. The
hotel has total 410 rooms and 23 service apartments of which over 200 rooms are likely to start in Q3FY12. HSP is likely
to benefit from commencement of phase-I of the Shangri-La hotel as it is likely to improve the footfalls at Palladium.

Room View of Shangri-La

External View of 60-storey Shangri-La                                                                                                  9
                 RESEARCH                                                                                                     Phoenix Mills

                            We have an SOTP target of Rs265 (increased from Rs240) for the stock which includes
                            Rs274 as aggregate value of Phoenix Mills’ projects, Rs44 for investments in subsidiaries
                            and other quoted investments, and Rs21 for application money paid towards stake acquisition
                            in the hospitality chain, PHCPL. Excluding net debt, we arrive at a one-year forward Gross
                            NAV of Rs310 for the stock.
                            Increase in Target Price is on account of: -
                                   1)   Improvement in valuation of BARE by Rs5/share
                                   2)   Operation of Pune Market City
                                   3)   Better expected realization in Bangalore GKW residential project
                                   4)   Reduced discount on NAV to 15% (from 20%) on account of improved visibility in
                                        market city projects and residential projects.

                             PHNX One year forward NAV
                              Project                                     NPV (Rs)      Comment
                              High Street Phoenix                             142
                              Market City (Kurla, Bengaluru, Chennai, Pune)    87       Likely to be operational in FY12, except Chennai
                              Other Residential                                36       It includes Bangalore GKW, PHNX holds 70%
                              BARE                                             10       Lucknow valued by capitalization, others at BV
                              Investment in Treasure World Developers          18
                              Investment in Galaxy Entertainment               0.2
                              Investment in Phoenix construction               0.1
                              Other investments                                26       Includes MF investment and other associates
                              Shangrila hotel                                   11      Phase I likely to be operational in Q2FY12
                              HSP Phase IV                                      21      May get higher FSI on Hospitality
                              Share Application Money                          21       Paid for Phoenix Hospitality
                              Less: Net Debt                                   60
                              NAV                                             310
                              15% Discount to NAV                              45
                              Target Price                                    265
                            Source: PINC Research

                             Revised v/s Old estimates
                                                               FY12E                                            FY13E
                                Revised            Old      %Change            Revised             Old      %Change
                             Sales                  3,993       5,095          (21.6)            6,029           6,194           (2.7)
                             EBITDA                 2,447       3,106          (21.2)            3,897           3,461           12.6
                             PAT                    1,570       2,064          (23.9)            2,316           2,288               1.2
                             EPS (Rs)                10.8          14.3        (23.9)              16.0           15.8               1.2

                            Source: PINC Research                                                                                                                    10

                          Subsidiary and Associate Details
                                                                                                                     Area                                                         Phoenix Invest.    Total   Total   Debt Spent till
                          Location Project                Phoenix     Subsidiary/SPV       Invest.Type Retail/Hotels Comm.    Resi.     Current Status                             FY11    FY10        Eq    Debt Drawn        date Comments
                                                          Stake (%)                                      mn sq ft   mn sq ft mn sq ft                                             Rs mn   Rs mn     Rs mn Rs mn Rs mn        Rs mn

                          Kurla      Mumbai Kurla Ph-I     24.3%      Offbeat Developers Associate        1.30       0.25               Both retail and office space likely         467     393     3,091    5,400   5,400   10,650 Retail mall is likely to start in Oct'11 and
                                                                                                                                                                                                                                    Commercial phase-I is likely to start by
                                                                                                                                        to start in Q3FY12.
                                                                                                                                                                                                                                    Dec'11.Average Selling price of
                                     Mumbai Kurla Ph-II                                                              0.90               Will take further 3 Years                                                                   KurlaPhase-I commercial is Rs 8,500 psf
                          Pune       Pune Ph-I             58.5%      Vamona Developers Subsidiary        1.20                          Operational                                 334     334     1,568    4,700   4,500    7,350 Retail mall operational from June'11
                                                                                                                                                                                                                                    onwards and presently 130 stores are
                                                                                                                                                                                                                                    operational. Commercial Phase I is likely
                                                                                                                                                                                                                                    to be delivered in Q3FY12 and Phase II
                                                                                                                                                                                                                                    construction is likely to start by Q4FY12
                                     Pune-Ph-I (Sale)                                                     0.13       0.13               Commercial phase likely                                                                        Average selling price of Rs 6,250 psf and
                                                                                                                                        to begin in Dec’11                                                                             is likely to be recognised in FY12

                                     Pune Ph-II                                                                      0.26               Construction will start in Q4FY11

                          Bangalore Bangalore East         46.5%      Island Star Mall     Associate      0.90                 0.65     Retail mall likely to start in Sept’11.                                                     Average Selling price of Bangalore
                                                                      Developers                                                        Resi. work will start in 6-9 month          364     107     1,950    3,000   3,000    5,000 projects is likely to be in between Rs 3500-
                                                                                                                                                                                                                                    4000 psf
                                     Bangalore Hotel                                                       0.35                         Construction halted currently

                          Bangalore Bangalore (W)          70.0%      Platinum Const.      Subsidiary                          2.00     Expected launch by Dec’11                   734     734     4,350        -       -         - Average realization expected Rs 6,500-
                                                                                                                                                                                                                                     7,000 psf
                          Chennai    Chennai               31.0%      Classic Mall         Associate      1.00                 0.25     In our opinion retail mall will start                                                          Retail mall in our opinionis likely to be
                                                                                                                                        in Q1FY13. Ph-I residential only                                                               further delayed and may start operation
                                                                                                                                                                                                                                       fromm Q1FY13.
                                                                                                                                        excavation work is done.                    447     442     1,500    2,750   2,750    4,000
                                     Chennai Resi          34.0%      Classic Housing      Associate                           0.25     Work not yet started.                        80

                          Mumbai     Shangrila             53.0%      Pallazzio Hotels &   Subsidiary      0.75                         Phase -I of 250 keys is likely to                                                           It is likely to start in Q4FY12.We don’t
                                                                      Leisure Ltd                                                       start in Q3FY12                             120     120     2,950    5,300   3,900    6,300 expect breakeven for the hotel for next
                                                                                                                                                                                                                                    3-4 years.

                          Lucknow    Phoenix United        62.5%      BARE (with UPAL)     Subsidiary      0.36                         Operational                                 859     859       286    1,050   1,050

                          Bareilly   Phoenix United       100.0%      BARE                 Subsidiary      0.30      0.05               Expected to start in Q4FY12                                   410     910     800       900
                                                                      (with Blackwood)
                                                                                                                                                                                                                                                                              Phoenix Mills

                                                                                                                                                  Phoenix Mills
                                                                                                                              Year Ended March (Figures in Rs mn)

 Income Statement               FY09      FY10     FY11      FY12E       FY13E       Cash Flow Statement             FY09      FY10      FY11      FY12E      FY13E
 Revenues                         996     1,230     2,102      3,993       6,029     Pre-tax profit                    957       759     1,151       2,122      3,460
 Growth (%)                      21.3      23.5      70.8       90.0        51.0     Depreciation & Amortisation        93       172       314         329       382
EBITDA                            602       775     1,406      2,447       3,897     Total Tax Paid                  (190)     (200)     (300)       (515)    (1,144)
 Growth (%)                      20.2      28.8      81.4       74.1        59.2     Chg in working capital             71       544     (325)       (545)    (2,580)
 Depreciation & amortisation       93       172       314       329          382     Other operating activities      (418)       (97)       97         221       589
EBIT                              508       603     1,091      2,118       3,515     Cash flow from oper (a)           513     1,179       937       1,613       707
 Interest                          55        86       228       263          300     Capital Expenditure            (4,437)   (2,696)   (2,907)     (2,000)           -
 Other income                     503       243       287       267          245     Chg in investments              1,876     (858)       723      (1,000)     (500)
PBT                               957       759     1,151      2,122       3,460     Other investing activities        534       401     (237)         245       245
 Income taxes                     190       147       321       536        1,142     Cash flow from inv.(b)         (2,027)   (3,152)   (2,422)     (2,755)     (255)
 Extra-ordinary items                -         -         -           -           -   Free cash flow (a+b)           (1,514)   (1,974)   (1,485)     (1,142)      452
Min int / inc from assoc           (1)        7       (46)      424        1,071     Equity raised/(repaid)               -         -         -           -           -
 Reported net income              768       620       842      1,570       2,316     Debt raised/(repaid)            2,241     1,146     2,973         898      1,200
Adjustments                         1          -         -           -           -   Change in MI                         -         -         -           -           -
 Adjusted net income              767       620       842      1,570       2,316     Dividend (incl. Tax)            (167)     (167)     (204)       (303)      (169)
 Growth (%)                      79.3     (19.2)     35.8       86.5        47.5     Other financing activities      1,329     (245)     (934)       1,350      (737)
Dil. EPS (Rs)                     5.3        4.3       5.8      10.8        16.0     Cash flow from fin (c)          3,402       734     1,835       1,945       293
 Growth (%)                      79.3     (19.2)     35.8       86.5        47.5     Net chg in cash (a+b+c)         1,888    (1,240)      350         803       745

 Balance Sheet                  FY09      FY10     FY11      FY12E       FY13E       Key Ratios                      FY09      FY10     FY11       FY12E      FY13E
 Equity Share Capital             290       290       290       290          290     OPM (%)                          60.4      63.0      66.9        61.3       64.6
 Reserves & surplus            14,858    15,759    16,410    17,810       19,955     Net Margin (%)                   77.0      50.4      40.1        39.3       38.4
 Shareholders' funds           15,148    16,048    16,700    18,099       20,245     Dividend Yield (%)                0.5       0.6       0.8         0.5        0.5
Min. Interest & Other           2,119     2,190     1,965      3,800       3,900     Gross asset turnover (x)          0.2       0.2       0.2         0.4        0.4
 Total Debt                     5,452     6,608     9,626     10,524      11,724     Total asset turnover (x)          0.0       0.0       0.1         0.1        0.2
 Capital Employed              22,718    24,847    28,291    32,423       35,869     Adjusted debt/equity (x)           0.3       0.4       0.6         0.6       0.6
 Net fixed assets              13,423    16,458    19,178    20,849       20,467     Interest coverage ratio (x)       9.3       7.0       4.8         8.1       11.7
 Cash & Cash Eq.                1,910       671     1,021      1,824       2,569     RoCE (%)                           4.4       3.2       4.1        6.4        8.3
 Net Other current assets       2,849     2,093     3,297      3,955       6,535     RoE (%)                            5.5       4.0       5.1         9.0      12.1
Investments                     4,525     5,601     4,786      5,786       6,286     EV/Net Sales (x)                 40.3      32.6      19.1        10.0        6.7
Other Assets                         -         -         -           -           -   EV/EBITDA (x)                    66.6      51.8      28.5        16.4       10.3
 Net Deferred tax Assets           11        24         9         9           11     P/E (x)                          41.0      50.8      37.4        20.1       13.6
 Total Assets                  22,718    24,847    28,291      32,423      35,869    P/BV (x)                           2.1       2.0       1.9         1.7       1.6

 Economic Value Added (EVA) Analysis                                                 Du Pont Analysis
                                FY09      FY10      FY11      FY12E       FY13E      (%)                             FY09      FY10      FY11       FY12E      FY13E
WACC (%)                         11.8      15.2      12.1      12.1         12.1     Tax burden (Net inc./PBT)        80.2      81.6      73.2        74.0       66.9
ROIC (%)                            3         2         3         6            8     Interest burden (PBT/EBIT)      188.2     126.0     105.4       100.2       98.4
Invested capital (Rs mn)       19,493    22,031    26,453    28,669       30,870     EBIT margin (EBIT/Rev.)          51.0      49.0      51.9        53.1       58.3
EVA (Rs mn)                    (1,799)   (2,844)   (2,350)   (1,821)      (1,292)    Asset Turnover (Rev./Avg TA)       4.6       4.8       7.2       12.0       16.4
EVA spread (%)                     (9)      (13)       (9)       (6)          (4)    Leverage (Avg TA/Avg equtiy) 154.6        163.9     177.7       190.8      191.9
                                                                                     Return on equity                   5.5       4.0       5.1         9.0      12.1

                                                    T E A M
Sadanand Raje             Head - Institutional Sales         91-22-6618 6366
                          Technical Analyst
Vineet Hetamasaria, CFA   Head of Research, Auto, Cement   91-22-6618   6388
Nikhil Deshpande          Auto, Auto Ancillary, Cement     91-22-6618   6339
Tasmai Merchant           Auto, Auto Ancillary, Cement      91-22-6618   6377
Vinod Nair                Construction, Power, Capital Goods           91-22-6618   6379
Ankit Babel               Capital Goods, Engineering               91-22-6618   6551
Hitul Gutka               Power                                91-22-6618   6410
Subramaniam Yadav         Construction                   91-22-6618   6371
Madhura Joshi             Power                              91-22-6618   6395
Satish Mishra             Fertiliser, Natural Gas            91-22-6618   6488
Urvashi Biyani            Fertiliser, Natural Gas           91-22-6618   6334
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Suman Memani              Real Estate, Mid caps               91-22-6618   6479
Abhishek Kumar            Real Estate, Mid caps             91-22-6618   6398
C Krishnamurthy           Technical Analyst                91-22-6618   6747

Rajeev Gupta              Equities                            91-22-6618   6486
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Himanshu Varia            Equities                          91-22-6618   6342
Shailesh Kadam            Derivatives                            91-22-6618   6349
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Mehul Desai               Head - Sales Trading                 91-22-6618   6303
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