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Informist, Thursday, Jan. 30, 2025

By Avishek Rakshit

KOLKATA – A one-time gain of INR 159.9 million helped real-estate developer The Phoenix Mills Ltd. arrest the fall in its profit for the December quarter. Nevertheless, the company disappointed the Street and reported an on-year decline in revenue for the first time since April 2021.

As against the Street's expectations of a consolidated revenue of INR 10.7 billion, and consolidated net profit of INR 2.9 billion, Phoenix Mills reported a 1% on-year decline in its revenue to INR 9.8 billion, and profit went down by 5.2% on year to INR 2.6 billion. The revenue trailed the Street's estimates by 8.4%, and the profit fell behind expectations by 10.3%.

Brokerages had anticipated a recovery in demand and strong consumption at malls operated by the company which could drive its revenues and have a bearing on Phoenix Mills' profit. Nuvama Wealth Management Ltd. had expected consumption to remain strong on the back of healthy demand in the festival season.

However, on a sequential basis, Phoenix Mills' revenue increased by 6.2%, and net profit rose by 21.4%. Brokerage Kotak Institutional Equities was expecting the improvement in revenue sequentially due to a recovery in consumption at malls.

The company kept its overall cost under check by reducing its finance costs and other costs, but construction-related costs spiralled by a whopping 121% on year to INR 744 million. Employee benefit expenses increased by 12.7% on year to INR 986.5 million, and electricity expenses surged by 12.8% on year to INR 516.5 million.

During the quarter under review, Phoenix Logistics and Industrial Parks Pvt. Ltd. – a wholly owned subsidiary of Phoenix Mills - divested its entire shareholding in Janus Logistics and Industrial Parks Pvt. Ltd., a step-down subsidiary for a total sale consideration of INR 479.4 million from which it earned a profit of INR 159.9 million. Discounting this sale and taxes, the decline in profit would have been higher.

Profit from the property and related services vertical, which accounted for 89% of its pre-tax profit during the December quarter, grew by 43.5% on year to INR 4.2 billion, and those from the hospitality service increased by 21% on year to INR 530 million. However, the residential sales segment ran into a loss of INR 50.7 million as against a pre-tax profit of INR 1.5 billion in the year-ago quarter.

The company's revenue from property and related services during the December quarter was INR 7.7 billion, while that from the hospitality segment was INR 1.9 billion. Revenue from the residential segment was INR 164.3 million.

During Apr-Dec, Phoenix Mills' consolidated net profit declined by 7.4% on year to INR 7.2 billion, and revenue grew by 4.7% on year to nearly INR 28 billion.

Thursday, shares of Phoenix Mills closed 2.7% higher at INR 1,599.2 on the National Stock Exchange. The company declared its December quarter results after market hours. End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Deepshikha Bhardwaj

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