Detailed Narrative
Robust Retail Performance Driven by Consumption Growth and Strategic Repositioning
The retail portfolio demonstrated strong performance in Q3 FY26, with consumption growing 25% YoY to ₹4,992 crores and rental income increasing 13% YoY to ₹573 crores. Retail EBITDA grew 16% to ₹585 crores. For the first nine months of FY26, retailer sales reached ₹12,326.7 crores, a 17% YoY increase. Key assets like Phoenix Mall of Asia (Bengaluru) saw a 112% consumption increase, while Phoenix Palladium (Mumbai) and Phoenix Palassio (Lucknow) grew 22% and 25% respectively. This growth was broad-based across categories, with jewellery up 39%, family/entertainment up 19%, and fashion/accessories up 16%.
Expanding and Monetizing the Office Portfolio
The company's office platform has expanded to nearly 5 million sq ft of completed spaces across four cities. Gross leasing for the nine months ended December 2025 reached 1.2 million sq ft. Occupancy at stabilized assets in Mumbai and Pune increased to 76% from 67% at the end of March 2025, while recently completed developments have reached 41% occupancy. The operational office portfolio generated an income of ₹162 crores and EBITDA of ₹103 crores for 9M FY26, with newer assets expected to contribute meaningfully from FY27.
Steady Performance in Hospitality and Residential Segments
The hospitality business reported an 8% YoY increase in income to ₹423 crores and a 16% YoY growth in EBITDA to ₹190 crores for 9M FY26, with EBITDA margins at 45%. The St. Regis Mumbai achieved 85% occupancy and an 8% YoY increase in average room rates to ₹20,000. In the residential segment, gross bookings for 9M FY26 stood at ₹412 crores, with revenue recognized at ₹273 crores, and an average pricing of ₹29,000 per sq ft, indicating sustained demand for premium offerings.
Prudent Financial Management and Capital Allocation
Phoenix Mills maintained a strong balance sheet with gross debt at approximately ₹5,200 crores and net debt at ₹3,344 crores as of December 31, 2025. The net debt to annualized EBITDA ratio remained healthy at 1.3x. The average cost of debt was reduced from 7.68% to 7.62% in December 2025. The company deployed ₹722 crores towards construction and ongoing projects during the first nine months and made a ₹1,257 crore payment in November 2025 to increase its stake in ISML to 58.33% from 51%, primarily funded through equity.
Future Growth Drivers and Strategic Initiatives
The company has a strong pipeline of projects, including a planned mixed-use development in Thane with 1.3-1.5 million sq ft of retail and 0.5-1 million sq ft of office space, with excavation and construction expected to commence in the next 2-3 months. Over 50% of the retail portfolio area is due for renewals and repricing in the next three years, with expected fixed rent increases of 35-40% in repriced areas of PMC Bangalore and 25% in PMC Pune. The company also continues to focus on sustainability, with renewable energy now accounting for 30% of retail energy requirements.
Tax Rate Outlook and Repricing Impact
The company's blended tax rate for 9M FY26 was 23.7%, with management guiding for a sustainable future range of 22-23%. This increase is attributed to the hotel business and residential segment now being under a full tax regime after exhausting accumulated losses. The full impact of repricing initiatives, particularly in PMC Bangalore, is expected to be reflected in the numbers during FY27, contributing to future rental income growth.