Shares of Phoenix Mills Ltd. declined on Wednesday, July 9, as brokerage firm Nomura initiated coverage on the stock, projecting a 11.1% downside on the stock citing weaker-than-expected growth.Nomura has initiated coverage with a “reduce” rating on Phoenix Mills with a price target of ₹1,400 per share. The stock ended the previous session at ₹1,574.7 apiece.
The brokerage said the company is likely witnessing slow consumption growth in mature malls with ramp-up estimated from FY28 onwards. Its valuation too appears stretched, Nomura added.
Phoenix Mills shares are now trading at 24 times financial year 2026 Enterprise Value to EBITDA, which is higher than the pre-Covid levels of 20 times.
Retail Consumption has grown only at a Compounded Annual Growth Rate (CAGR) of 9% over financial year 2025-2027, in comparison to the 40% CAGR witnessed between financial year 2022-2025. This slow growth was attributed to weak consumption growth in mature malls like Phoenix Palladium, Four Phoenix Market City and Phoenix United Malls, which make up 65% of its total consumption, on a high base, according to Nomura.Phoenix Mills’ Earnings Before Interest Taxes Depreciation and Amortisation (EBITDA) margins could come under pressure from tenant churn at mature malls and higher consumption mix from malls in tier-2 cities, which would have relatively lower margins, the note added further.
The brokerage said the company is likely witnessing slow consumption growth in mature malls with ramp-up estimated from FY28 onwards. Its valuation too appears stretched, Nomura added.
Phoenix Mills shares are now trading at 24 times financial year 2026 Enterprise Value to EBITDA, which is higher than the pre-Covid levels of 20 times.
Retail Consumption has grown only at a Compounded Annual Growth Rate (CAGR) of 9% over financial year 2025-2027, in comparison to the 40% CAGR witnessed between financial year 2022-2025. This slow growth was attributed to weak consumption growth in mature malls like Phoenix Palladium, Four Phoenix Market City and Phoenix United Malls, which make up 65% of its total consumption, on a high base, according to Nomura.Phoenix Mills’ Earnings Before Interest Taxes Depreciation and Amortisation (EBITDA) margins could come under pressure from tenant churn at mature malls and higher consumption mix from malls in tier-2 cities, which would have relatively lower margins, the note added further.
The estimated first quarter EBITDA missing consensus by 7% is the key negative catalyst, while stronger-than-expected consumption in mature malls is the key upside risk, Nomura said.
Of the 19 analysts that have coverage on the stock, 10 have a “buy” rating, six have a “hold” rating and three have a “sell” rating.
Shares of Phoenix Mills Ltd. were trading 3.42% lower at ₹1,520.9 apiece at 10.45 am on Wednesday, July 9. The stock has declined nearly 6% in the past month.
Also Read: GAIL pipeline tariffs may see a 20% increase: Exclusive
