The Phoenix Mills Limited

Phoenix Mills delivered a robust FY26, with consolidated revenue growing 16% to ₹4,423 crore and EBITDA increasing 22% to ₹2,637 crore. This performance was achieved without adding new retail capacity, underscoring the strength of its mixed-use platform. Retail consumption reached an all-time high of ₹16,587 crore, up 21% year-on-year, with Q4 consumption growing 31%. Retail rental income also saw a 10% increase to ₹2,157 crore, driven by healthy tenant trading performance and strategic repositioning efforts across malls.

The company's office platform has undergone significant transformation, expanding to 4.8 million sq. ft. across four cities. Gross leasing for FY26 exceeded 2.2 million sq. ft., boosting overall portfolio occupancy to 70%. Mature assets achieved 83% occupancy, while newly completed assets reached 62%. Management anticipates a meaningful step-up in rental income and EBITDA from FY27, targeting 90% occupancy by Q1 FY27 and a doubling of quarterly office income by Q4 FY27, driven by superior amenities and strong leasing momentum.

Despite a challenging macro backdrop, the hospitality segment demonstrated resilience in FY26. Hotel income grew 8% to ₹596 crore, with EBITDA increasing 14% to ₹276 crore. The St. Regis Mumbai continued to outperform, achieving 49% EBITDA margins and average room rates exceeding ₹21,000, supported by strong occupancy. Courtyard by Marriott Agra also maintained high occupancies in the high 70s and stable margins.

The residential business had a strong FY26, with gross bookings doubling to ₹471 crore and collections closely tracking at ₹467 crore. Revenue recognized stood at ₹489 crore, primarily from premium residential projects in Bengaluru like One Bangalore West and Kessaku. These projects achieved average realization pricing of ₹28,000-29,000 per sq. ft., highlighting the company's strategy of using residential development as a cash-generating vertical by monetizing high-quality inventory in mature micro-markets.

Phoenix Mills deployed significant capital in FY26, investing ₹1,035 crore in construction and development for retail and office assets, and an additional ₹431 crore for land and development rights. A key transaction was the buyout of CPP's stake in ISMDPL. Despite these investments, the balance sheet remained strong, with gross debt at ₹5,164 crore and net debt at ₹3,160 crore. The net debt to EBITDA ratio improved to 1.19x from 1.24x, reflecting disciplined capital allocation and robust operating cash flows.

The company's development pipeline is progressing, with new malls in Kolkata and Surat targeted for launch in H2 FY28. Projects in Thane, Coimbatore, and Chandigarh have moved from approval to execution, with necessary clearances obtained and pre-construction works initiated. Phoenix Grand Victoria in Kolkata is already 79% leased, and Phoenix Surat is 41% leased. The company is also actively scouting for new city expansions, with plans to announce 1-2 transactions in FY27, alongside expanding existing assets into super campuses.

The observed lag between consumption and rental growth is attributed to the company's MG plus revenue share lease structure, the ramp-up phase of newer assets like Mall of Asia and Mall of the Millennium, and seasonal consumption in high-volume categories. Management expects strong double-digit rental growth in FY27, with Phoenix MarketCity Pune projected for a 14-15% rental upside and PMC Bangalore for a 20% increase, driven by areas coming online and strategic repositioning.