The Phoenix Mills Ltd Reports 39.5% Profit Jump in Q2 FY25 Driven by Rental Income and Consumption

The Phoenix Mills Ltd has reported a substantial 39.5% year-on-year increase in its consolidated net profit for the second quarter of fiscal year 2025, reaching ₹304 crore from ₹218 crore in the same period last year. This significant growth was primarily fueled by higher rental income from its retail properties and strong consumer spending across its malls.

Revenue from operations saw a healthy rise of 21.5% to ₹1,115.4 crore. Operating earnings before interest, tax, depreciation, and amortisation (EBITDA) also climbed by 29% to ₹667 crore, with the EBITDA margin improving to 59.8% from 56.4% a year prior.

The company, which owns premium retail and mixed-use developments like Phoenix Palladium in Mumbai and Phoenix MarketCity in Bengaluru, experienced a 10% year-on-year growth in retail rental income, amounting to ₹527 crore. This was supported by strong tenant sales and increased footfalls in its malls. Overall consumption across its retail portfolio surged by 14% year-on-year to ₹3,750 crore during the quarter.

The office leasing segment remained stable, with 9.4 lakh square feet leased year-to-date. The hospitality sector also showed positive momentum, with a 12% sequential rise in EBITDA, attributed to higher occupancy rates and improved room tariffs.

Newly opened properties, Phoenix Mall of Asia in Bengaluru and Phoenix Mall of the Millennium in Pune, have surpassed initial trading expectations since their launch.

Financially, Phoenix Mills maintained a strong balance sheet. The average cost of debt decreased to 7.68%, and the net debt-to-EBITDA ratio improved to 0.9 times. The company plans to expand its retail footprint significantly, aiming for over 15 million square feet in its consolidated retail portfolio in the coming years, by developing projects in Chennai, Kolkata, and Surat.

Impact: This strong financial performance and aggressive expansion strategy are likely to boost investor confidence in The Phoenix Mills Ltd. The company's ability to generate consistent rental income, coupled with robust consumption trends and successful new project launches, indicates strong operational efficiency and growth potential. This could lead to positive movement in its stock price and attract further investment. Rating: 8/10.

Difficult Terms: * Consolidated Net Profit: The total profit of a company and its subsidiaries after all expenses and taxes have been deducted. * EBITDA (Earnings Before Interest, Tax, Depreciation, and Amortisation): A measure of a company's operating performance before accounting for financing costs, taxes, and non-cash expenses. * EBITDA Margin: Calculated by dividing EBITDA by total revenue, it indicates how efficiently a company is generating profit from its operations. * YoY (Year-on-Year): A comparison of a company's performance from one period to the same period in the previous year. * Sequential Rise: A comparison of a company's performance from one period to the immediately preceding period (e.g., Q2 vs Q1). * Occupancy: The percentage of available space (like hotel rooms or office spaces) that is being used or rented out. * Net Debt-to-EBITDA Ratio: A leverage ratio that shows how many years it would take for a company to pay back its debt using its earnings before interest, taxes, depreciation, and amortisation. A lower ratio generally indicates better financial health.