Phoenix Mills shares almost back to pre-pandemic levels

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Phoenix Mills shares almost back to pre-pandemic levels


The Covid-19 pandemic has had a terrible impact on the fate of shopping mall developers due to the imposition of various restrictions. With this in mind, The Phoenix Mills Ltd faced an extremely challenging time in the past fiscal year. However, this is hardly reflected in the share price. Phoenix Mills shares hit a new 52-week high on the National Stock Exchange on Friday. They are now only 6.5% lower than their pre-Covid highs. Analysts said last year’s recovery trends underscore the company’s ability to recover faster once business conditions normalize. While the first half of fiscal 2021 was painful, consumption in shopping malls recovered faster than the December quarter. Photo: Phoenix Mills’ consolidated sales declined only 3% year over year for the March quarter. This is a significant improvement over the 34%, 48% and 78% year-on-year sales declines in the December quarter, September quarter and June quarter, respectively. The improvement in the second half of the year was supported by the increase in the operating hours of the shopping centers, the Christmas season and the opening of catering facilities. The result: In FY21, consumption in the company’s shopping centers was around 69% of the FY20 level. In the March quarter the consumption recovery was 90% compared to the same period of the previous year. Unfortunately, that recovery is likely to take a hit. The Covid-19 resurgence would mean the company’s short-term financial performance would hit another setback due to the pandemic-induced lockdowns. Therefore, the June quarter is likely to be a difficult one for the company. The silver lining, however, is that the company is strengthening its liquidity position amid the pandemic. “With liquidity of 1,030 billion yen in March 2021 and a potential fund infusion of 1,510 billion yen from GIC Private Equity and 960 billion yen from the Canada Pension Plan Investment Board (CPPIB), Phoenix Mills is building a war chest for growth,” said Phoenix Mills Analysts at ICICI Securities Ltd in a report dated June 3. Last week, Phoenix Mills said it had finalized documents with GIC through its subsidiaries, an enterprise value of 5,500 crore for certain assets. GIC will initially receive 26.4% of the shares in these subsidiaries through a fund injection of ₹ 1,110 crore. On the balance sheet side, Phoenix Mills is better positioned after the Covid infection Mint newsletter * Please enter a valid email address * Thank you for subscribing to our newsletter. Don’t miss a story! Stay connected and informed with Mint. Download our app now!

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