This real estate company soars above the rest

Real estate is notorious for being cyclical, inconsistent and unpredictable. Yet, soaring above the ashes of chaos is Phoenix Mills . A beacon of consistency, the Mumbai-based real estate developer has been buoyed by double-digit revenue growth and operating profit over the last five years. Impressively, the company's operating profit has grown annually at 20.5 per cent over the last five years, the fastest among all its peers in the S&P BSE Realty Index. What's more, it is the only company among its peers to report a positive cash flow from operations in each of the last 10 years and also generate a sector-beating operating profit margin of 50.4 per cent as of the 12 months ending September 2023. It's hardly surprising then that the market has taken a shine to Phoenix Mills, with its stock price up over 300 per cent since 2019. Given the company's extraordinary flight in recent years, we decided to closely examine the nearly 120-year-old company. The history of Phoenix Mills Originally a textiles company, Phoenix Mills shifted its focus to commercial real estate only in the 1980s. Ignore the pun but the company's phoenix moment came when it used its land in Mumbai to develop a shopping mall. Even as of FY23, that mall's revenue share stood at a healthy 20 per cent. Spurred by its initial success and India's rising retail consumption needs, the management has continued to focus on consumer-facing commercial real estate projects, including malls and hotels. Over the years, it has amassed India's largest mall portfolio, contributing to around 70 per cent of its revenue as of FY23. Additionally, Phoenix owns and operates hotels and commercial offices, along with a housing project in Bangalore. Maal-a-mall Back in FY19, the company had set a target to double its mall property from 4 million square feet to 8 million square feet through a combination of accruals, debt and by raising equity from institutional investo