Motilal Oswal has upgraded Phoenix Mills from “neutral” to “buy” and has increased its price target to ₹2,044 per share from ₹1,646 apiece , implying a potential upside of 35% from its previous closing price of ₹1,517 apiece.
The brokerage said commissioning of new malls will boost the company’s growth beyond the financial year 2027.
Motilal Oswal is of the view that while new malls continue to ramp up well, Phoenix Mills is implementing measures to accelerate consumption at mature malls. These initiatives, with a further increase in trading occupancy, will help the company sustain healthy traction in consumption.
The company’s acquisition of the remaining 49% stake in Island Star Mall Developers will also strengthen its high-quality retail asset portfolio, unlocking long-term value, Motilal Oswal said.
Upcoming malls set to boost growth
Phoenix Mills’ retail rental income is likely to report a Compounded Annual Growth Rate (CAGR) of 21% over financial year 2025-2027 and reach ₹2,800 crore by financial year 2027.
During FY15-25, the company’s retail portfolio witnessed a 11% CAGR in consumption and rental retail income clocked a 12% CAGR, mirroring the consumption growth. The brokerage sees this positive growth trend to continue, primarily driven by the ramp-up of new malls. As of the June quarter, trading occupancy stood at 89%, down from 91% in March 2025.
Motilal Oswal added that flat or declining consumption in certain mature assets is linked to ongoing revamps and tenant churn.
For example, in Bengaluru, around 10% of the leasable area is under fit-outs or being repurposed from hypermarkets to high-performing fashion anchors, while in Pune, outdated anchors and restaurants are being replaced with new and more relevant offerings.
Phoenix Mills’ management is also optimistic about the long-term performance, and has projected strong growth from FY27 onwards once the revamps are completed.
The recently-commissioned malls in Lucknow, Indore and Ahmedabad achieved average trading occupancy of 94% within six to eight quarters of operation. The company is aiming to sustain this with its existing malls and replicate it in the upcoming malls in Gujarat and Kolkata, Motilal Oswal said.
Also, with further expansions at Phoenix Palladium in Mumbai, which is expected to launch by FY26-27 and the acquisition of 22.1 acre in Coimbatore and Chandigarh Mohali in FY25, the company is set to more than double its portfolio by FY30, the brokerage said.
Office portfolio to surge 3x
Motilal Oswal also projected Phoenix Mills’ office portfolio to grow significantly over the next few years. By FY27, in a phased completion, the portfolio is projected to increase nearly fourfold, reaching 7.1 million square feet. This growth will boost rental income to ₹600 crore by FY27, representing a 71% CAGR over FY25-27 or a 3x increase.
This trajectory underscores the company’s confidence in the long-term demand for office spaces within its mall-based developments, it added.
Hotel segment to benefit from strong momentum
Phoenix Mills’ flagship hotel St. Regis has witnessed a strong improvement in operations due to demand tailwinds. The company is also developing a 400-key premium hotel, Grand Hyatt, at its MarketCity mall in Bengaluru. This is expected to be completed in FY27-28 with an estimated capex of 1,000 crore.
The third phase of PMC Bengaluru will see another hotel with 300 keys, which will begin construction soon, Phoenix Citadel in Indore, too, will see another 300-key hotel, which is at the planning stage currently.
The company has also acquired a 11 acre land parcel in Thane in FY24 and the project is likely to comprise another premium hotel.
This will triple its hospitality portfolio to over 1,800 keys, Motilal Oswal said. At the moment, 588 keys are operational.
Of the 17 analysts that have coverage on the stock, 14 have a “buy” rating, one has a “hold” rating and two have a “sell” rating.
Shares of Phoenix Mills Ltd. ended the previous session 0.9% higher.
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