The Phoenix Mills Ltd reported a 12% year-on-year rise in retail consumption for the June quarter (Q1FY26), according to its latest operational update. Growth was led by strong performance at key malls including Phoenix Palassio (Lucknow), Phoenix Citadel (Indore), Phoenix Palladium (Mumbai), and Palladium Ahmedabad. New assets such as Phoenix Mall of the Millennium in Pune and Phoenix Mall of Asia in Bengaluru also contributed meaningfully to the uptick.
Trading occupancy, however, dipped slightly to 89% in Q1FY26 from 91% in the previous quarter. This decline was attributed to a strategic repositioning of Phoenix’s MarketCity assets, involving refreshed tenant mixes and restructured leases aimed at improving long-term rental productivity.
The mall developer and operator is targeting double-digit retail consumption growth for FY26, backed by brand upgrades, improved tenant profiles, and strategic leasing initiatives. While the year has started on a strong note, analysts have flagged some headwinds.
“We expect retail consumption at a slow 9% CAGR over FY25-27F (versus a ~40% CAGR over FY22-25) due to weak consumption growth at its mature malls (Phoenix Palladium, Four Phoenix Market City and Phoenix United Malls; ~65% of total consumption) on a high base,” said a Nomura Global Markets Research 8 July report.
Also, strategic measures would take time to yield results. A worry is retail operating margins could come under pressure from tenant churn at mature malls and higher mix of tier-2 city malls, which tend to have relatively lower margins.
In its hospitality segment, The St. Regis Mumbai posted an occupancy rate of 84% for the quarter, with average room rates rising 13% year-on-year. Courtyard by Marriott in Agra showed even stronger recovery, with occupancy at 71% and revenue per available room up 22%.
On the commercial front, gross leasing stood at 4.07 lakh sq. ft in Q1. Occupancy at office assets in Mumbai and Pune rose to 69%, up from 67% in March. Residential sales also gained momentum, with bookings tripling year-on-year to ₹168 crore and collections rising to ₹99 crore.
However, concerns about muted urban consumption continue to weigh on the stock, which fell 25% over the past year. The company is expanding its retail and commercial portfolio, with plans to develop multiple assets across major cities.
Nuvama Research, in a 7 July report, noted that new city entries and upcoming asset launches could act as triggers for the stock.
Phoenix Mills has earmarked ₹1,000– ₹1,200 crore in annual capital expenditure over the next five years, excluding major acquisitions. In this context, managing leverage will be critical. As per Bloomberg data, the stock currently trades at a FY27 price-to-earnings multiple of 35x, a valuation that analysts do not find compelling.
