Shares of Phoenix Mills Ltd. are trading with gains of over 6% on Friday, July 25, after brokerage firm HSBC upgraded the stock to ‘Buy’ from ‘Hold’, citing recent correction in the share price and renewed value creation.HSBC also raised its price target on Phoenix Mills to ₹2,000 from ₹1,850, indicating an upside potential of over 38%.
The brokerage said that the current valuation offers an attractive entry point. HSBC said that the market is not pricing in growth beyond visible assets and that the stock provides adequate downside protection.
One of the key triggers for the upgrade was the company’s acquisition of the Canada Pension Plan Investment Board’s (CPPIB) 49% stake in their joint venture, Island Star Mall Developers Pvt Ltd (ISMDPL). Phoenix Mills will pay over ₹5,449 crore for the stake, making ISMDPL a wholly owned subsidiary. The total consideration will be paid in four tranches over 36 months.HSBC estimates that the buyback of CPPIB’s stake could add around 7% to Phoenix Mills’ value, calling it another instance of capital-efficient value creation.
The brokerage said that the current valuation offers an attractive entry point. HSBC said that the market is not pricing in growth beyond visible assets and that the stock provides adequate downside protection.
One of the key triggers for the upgrade was the company’s acquisition of the Canada Pension Plan Investment Board’s (CPPIB) 49% stake in their joint venture, Island Star Mall Developers Pvt Ltd (ISMDPL). Phoenix Mills will pay over ₹5,449 crore for the stake, making ISMDPL a wholly owned subsidiary. The total consideration will be paid in four tranches over 36 months.HSBC estimates that the buyback of CPPIB’s stake could add around 7% to Phoenix Mills’ value, calling it another instance of capital-efficient value creation.
While the recent quarter was in line with expectations and somewhat weak due to ongoing mall refresh activities, HSBC believes the company is undergoing a metamorphosis that positions it well for future growth.
The stock gained following the announcement of its Q1FY26 results, with modest earnings growth and the strategic acquisition boosting investor sentiment.
