Phoenix Mills Ltd Q4 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Parikshit Kandpal - HDFC Securities - Analyst : Congratulations on a great quarter, sir. Shishir sir, my first question is on the same-store growth of 8%. If you can help us understand a little bit more on how has been the trading occupancy impact on this 8% volume growth and inflation?

Question: Parikshit Kandpal - HDFC Securities - Analyst : Sir, and guidance for next year, what kind of sales growth we are looking at?

Question: Parikshit Kandpal - HDFC Securities - Analyst : For these malls, which are like operational, like-to-like basis, what kind of growth do you think we can forecast for FY25 versus 8% we have reported this year? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 18, 2024 / 5:30AM, PHOE.NS - Q4 2024 Phoenix Mills Ltd Earnings Call

Question: Parikshit Kandpal - HDFC Securities - Analyst : Okay. Okay. And my second question is on Thane. So I mean you have acquired the land parcel. So any plans on what have you decided to do there? One of your competitors coming up with a hotel of 560-odd rooms keys. So any plans -- I mean, what are you looking to add there, do there in terms of -- you can help us in the mix understand as we commercial hospitalities what do you intend to do there?

Question: Parikshit Kandpal - HDFC Securities - Analyst : Okay. Just last thing on the residential piece. So now we have [seen] we are increasing our overall developable area there by FY27. So what kind of presales number do you think you can achieve on a more consistent and a steady basis so that, that portfolio, there's more visibility on growth. We didn't have any major launches besides the Bangalore one and it could still awaited. So how do you intend to build that portfolio over the next three, four years? And what kind of pieces do you think you can achieve in that segment in two years' time? More on the road map of three years -- next three years there?

Question: Parikshit Kandpal - HDFC Securities - Analyst : And more on the longer term, like three, four years, what kind of sales can this segment do for us like residential, can we use that INR2,000 crore number with the addition of more projects over the next two, three years?

Question: Praveen Choudhary - Morgan Stanley - Analyst : Congratulations on a very, very good result. Shishir, just a quick question for me. Can you talk about the competition in Tier 1 existing cities where you already have malls in terms of are you finding considering how good this business has been credible competition coming in? And the second question is on Tier 2 cities. The return on invested capital, how are you thinking about it as you're going into newer cities. So far, you have obviously achieved that, but are you finding that you may not be or are you need to slow down if the returns are coming slower? How are you thinking about it, is the question?

Question: Praveen Choudhary - Morgan Stanley - Analyst : That probably makes sense. I did go to your Ahmedabad mall. It's actually fantastic. I have one more question, if it's okay. I was looking at your slide number 12 and you have category-wise growth in your consumption. So you look at electronics showing minus 1% or others showing 3%, food and beverage slightly lower. How are you thinking about it? Of course, you can't have a mall which has zero percentage of these categories. But how do you ensure that you keep pruning it and improving that trade mix? Thank you.

Question: Praveen Choudhary - Morgan Stanley - Analyst : Congratulations, indeed very well done.

Question: Kunal Lakhan - CLSA - Analyst : Yes. My first question was on what is the development plan for the 6.6 acres of land that we have bought in Bangalore? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 18, 2024 / 5:30AM, PHOE.NS - Q4 2024 Phoenix Mills Ltd Earnings Call

Question: Kunal Lakhan - CLSA - Analyst : Sure. Just -- I mean, just a few thoughts there. I mean, generally, this is very kind of uncharacteristic of us, right, in terms of like we -- in the past, we've generally been very clear about what we want to do. And then in fact, like we paid top dollar and bought land and built malls and then those malls have been pretty strong in terms of profitability and returns. Whereas, this is again, like very similar to what we are doing in Thane also where you bought land, but we are not sure what we are going to build over there. Any change in the thought process or strategic thinking that versus -- what we used to be doing in the past versus what we are doing today?

Question: Kunal Lakhan - CLSA - Analyst : Sure, sure. Just one follow-up on that in terms of like we are looking at, like you give an example of Bangalore also that you may look at adding some retail space also over there, and we are already doing some expansion at the Palladium Mumbai in terms of retail space. Overall, our earlier strategy was like build these like 1 million square feet of retail was like the sweet spot. But do you think that, that thing is changing now, like there is potential of building larger scale malls. And we're seeing that with some of your competitors also who are building like huge malls, especially in North? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 18, 2024 / 5:30AM, PHOE.NS - Q4 2024 Phoenix Mills Ltd Earnings Call

Question: Parvez Qazi - Nuvama Wealth - Analyst : Congrats for the great set of numbers. Two questions from my side. First, in terms of our trading occupancy, which currently is at about 88%. Would it be fair to assume that, let's say, by the end of FY25, this number would have moved to somewhere closer to the mid-90s at a portfolio level?

Question: Parvez Qazi - Nuvama Wealth - Analyst : Sure. And my second question is regarding the -- our various office assets. It would be great if you could tell us about the status of the construction there and when do we expect the various assets to become operational.

Question: Parvez Qazi - Nuvama Wealth - Analyst : Got it. And I mean, apart from the two acquisitions that we have done in Thane and Bangalore, how is our business development, et cetera, plans for new retail asset development, whether in Tier 1 or Tier 2 cities from here? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 18, 2024 / 5:30AM, PHOE.NS - Q4 2024 Phoenix Mills Ltd Earnings Call

Question: Atul Mehra - Motilal Oswal Asset Management Ltd - Analyst : Congratulations on good results. My question is on the retail expansion. So I think in the presentation, we've spoken about 11 million square feet going to 14 million square feet. So the question was in terms of given our very successful in terms of response so far on that at Ahmedabad and Lucknow you spoke about, can we look at the next two to three years to build a very, very large pipeline, like targeting 20 million-plus in retail? Because what tends to happen is every city will tend to have a potential destination that will prosper over the next decade, right? And if we don't take that opportunity some of our competitors might go in there and which would mean that once they have an established asset, it would not give us that opportunity. Because obviously, like there is a limit to how much land space a city can absorb. So structurally, given also that we have a very strong balance sheet today and cash flows are very strong, can we look at stepping up the growth agenda on retail?

Question: Atul Mehra - Motilal Oswal Asset Management Ltd - Analyst : Right. Got it. That's good enough.

Question: Atul Mehra - Motilal Oswal Asset Management Ltd - Analyst : And henceforth like when you're looking at setting up -- is the template going to be 1.5 million for all new assets that you look to acquire? Or it depends on like you have done in the past, the phase-wide development and maybe looking at building on asset at a later stage.

Question: Prem Khurana - Anand Rathi Securities - Analyst : Sir, I mean, just if you could talk about the Indore asset (inaudible) in detail because -- and then in terms of trading density seems to be not there. I mean generally when I compare with most of these other assets that we have, and most of these that should be closer to INR1,000-odd sort of number on trading density side and even likes of Lucknow and the recently commissioned Pune and all that. But this is more closer to INR600 odd. So are we happy with this number? Or is it in line with your expectation or it's slightly lagging our expectation?

Question: Prem Khurana - Anand Rathi Securities - Analyst : Sure. So I think in terms of monthly rental rate that you're charging, I mean, I agree it's lower in some of these other malls. But I mean, if I were to look at it from -- so eventually, when I look at a retailer, they tend to have their cost structures in place and how much do they intend to share with you in terms of CAM and rental rate? And what would you believe is the ideal number for retailer, for example, I mean, for Indore it works out to 20%-odd sort of number? Palladium, I can understand it's a destination of most people who would be willing to pay you more than 20%, 25%, just to be able to have presence there. But generally speaking, whenever you're evaluating, what sort of number do you tend to kind of bake in into your estimates to understand whether the mall would find bake as enough.

Question: Mohit Agrawal - IIFL Institutional Equities - Analyst : Congratulations to your team for a great performance. My first question is, you talked about Tier 1 malls. So just for your expansion in Tier 1 metro cities, we have so far taken the Greenfield Group for constructing new malls. But for -- given the land availability issue, would you be open to or have you considered exploring the Brownfield or acquiring existing malls and turning them around? And would your valuation expectations be very different, different when you're acquiring a Brownfield mall? That's my first question.

Question: Mohit Agrawal - IIFL Institutional Equities - Analyst : Okay, understood. That's clear. And secondly, on the commercial bid, you gave time lines on the completion. So between Bangalore Millennium Towers in Chennai, in the next six months, we have almost roughly about 1.5 million square feet to 2 million square feet of space coming up. What is the leasing pipeline looking like in these assets?

Question: Mohit Agrawal - IIFL Institutional Equities - Analyst : Congratulations to Mr. Gupta on joining the team, looking forward to interact with you.