The Phoenix Mills Limited

Phoenix Mills reported robust financial performance for Q2 and H1 FY26. Q2 revenue from operations stood at ₹1,115 crore, marking a 22% year-on-year growth, with EBITDA increasing by 29% to ₹667 crore. Net profit for the quarter grew 39% to ₹304 crore. For the first half, revenue reached ₹2,068 crore (up 14% YoY) and consolidated EBITDA was ₹1,231 crore (up 17% YoY), demonstrating strong operational momentum across its mixed-use portfolio.

The retail portfolio continued to be a key growth driver, with H1 FY26 retailer sales reaching ₹7,335 crore, a 13% year-on-year increase. Q2 consumption grew 14% to ₹3,750 crore, and rental income rose 10% to ₹527 crore, contributing to a 10% EBITDA growth to ₹551 crore. Growth was led by Phoenix Palladium and strong traction in Mumbai, Chennai, Lucknow, and Bareilly. The company is implementing strategic churns and brand enhancements, with sales per square foot up over 20% at Phoenix MarketCity Bangalore and 11% at Phoenix MarketCity Pune, and expects over 90% of trading areas in Pune and Bengaluru to be operational by March 2026.

The office portfolio is expanding rapidly, with completed footprint growing from 2 million sq ft in 2023 to nearly 5 million sq ft across four cities. H1 FY26 income from operational offices was ₹106 crore with an EBITDA of ₹67 crore. Occupancy at operating assets in Mumbai and Pune improved from 67% in March 2025 to over 77%, with over 1 million sq ft of gross leasing achieved across key cities by October 2025. Management expects the flow-through in rent and EBITDA from this leasing momentum to be visible from Q3 and Q4 FY26.

The Hotels segment delivered steady performance in H1 FY26, with income of ₹244 crore (up 5% YoY) and EBITDA of ₹105 crore (up 16%), maintaining an EBITDA margin of over 43%. St. Regis Mumbai recorded a high occupancy of 85% and over 2% growth in average room rates. The Residential business showed strong sales momentum, with H1 FY26 sales of ₹287 crore, already surpassing full-year FY25 sales. Q2 revenue was ₹171 crore, driven by projects like One Bangalore West and Kessaku, achieving pricing in excess of ₹27,000 per square foot and an EBITDA margin of 56-57% for existing inventory.

The company maintained a prudent balance sheet, with gross debt below ₹5,000 crore and net debt declining by ₹500 crore in H1 FY26 to approximately ₹2,200 crore. The net debt to EBITDA ratio remains healthy at less than 1x. Phoenix Mills successfully reduced its average cost of debt from 8.50% to 7.68%. The first tranche payment of ~₹1,257 crore from the CPP transaction is expected in early November, which is fully tied up and will not create liquidity pressure.

Phoenix Mills is on track with its project completion timelines. The Grand Victoria Mall Kolkata, Surat Mall, Bengaluru retail expansion, Phoenix MarketCity Whitefield office expansion, and Grand Hyatt Hotel are all slated to be operational by Q3 calendar year 2027. The company aims to deliver 1-2 million square feet of retail space annually beyond 2030, complemented by other asset classes. Environment clearance for the Chandigarh project has been received, and construction for Coimbatore is expected to commence this quarter.

The launch of Gourmet Village at Phoenix Palladium, a two-level dining and entertainment hub with 19 outlets, has been instrumental in driving a 13% like-to-like consumption growth. This initiative, along with premiumization, brand enhancements, and project completions, are the primary drivers of consumption growth across the portfolio. Management noted that the impact of GST rate changes on consumption growth in Q2 was minimal, with growth largely stemming from these internal strategic efforts.