The Phoenix Mills Limited (PHOENIXLTD.BO) Q2 FY2026 Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Q2 and H1 FY '26 Results Conference Call of The Phoenix Mills Limited [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Varun Parwal. Thank you, and over to you, sir.

Thank you, and good evening, everyone. Happy Diwali. It's a pleasure to welcome you all to discuss our operating and financial performance for the second quarter and first half of fiscal year 2026. During the first half, we reported revenue of INR 2,068 crores, reflecting a 14% growth over the same period last year. Our consolidated EBITDA stood at INR 1,231 crores, up 17% year-on-year. The second quarter, in fact, showed an improvement in revenue and profit trajectory with revenue coming in at INR 1,115 crores in up 22% year-on-year and EBITDA of INR 667 crores, up 29%. Growth during this period has been led by a strong performance from our retail portfolio and good sales momentum in the Residential segment. At Phoenix, we are creating integrated destinations where people choose to shop, work, live and unwind. And this interconnected model continues to translate into both resilience and growth. Fiscal year '26 marks a phase of elevating the retail and office experience, strengthening our balance sheet and accelerating our next phase of growth. These results reflect not only our operational discipline, but also the compounding impact of our mixed-use strategy and our commitment to building enduring value. Our Retail story continues to be the engine that drives the Phoenix ecosystem. Under Rashmi's leadership, it is growing stronger and more refined each year. Rashmi, of course, as you know, has been with Phoenix for over 15 years and has played a pivotal role in transforming our mall portfolio into world-class destinations. With over 26 years of industry experience, she continues to champion growth, operational excellence and strong brand partnerships while mentoring the next generation of retail leaders. Rashmi, over to you to take us through how we are deepening our Retail [ structure ].

Thank you, Varun, and good evening, everyone. I'm happy to share that our Retail portfolio continues to build on strong growth momentum, delivering both financial performance and a richer customer experience. Retailer sales for H1 FY '26 reached INR 7,335 crores, up 13% year-on-year. In the second quarter, consumption stood at INR 3,750 crores, up 14%. Retail income for the quarter rose 10% to INR 527 crores, while EBITDA grew 10% to INR 551 crores. Consumption growth for the quarter was led by double-digit gains at Phoenix Palladium and strong traction across Mumbai, Chennai, Lucknow and Bareilly centers. Newer assets such as Phoenix Palladium, Phoenix Mall of the Millennium and Phoenix Mall of Asia also contributed meaningfully. Growth would have been stronger if adjusted for temporary area closures at Phoenix Palladium Mumbai for redevelopment, and strategic upgrades at our Phoenix MarketCity Malls. Our consumption performance remains strong across categories. Fashion and Accessories grew 17% year-on-year. Family entertainment and multiplexes were up 23% on the back of a strong movies late. Athleisure and watches each recorded growth above 15%. This broad REIT strength highlights resilient consumer demand and the trust that leading brands place in Phoenix as their preferred retail partners. A key milestone this year was the launch of Gourmet Village at Phoenix Palladium, a 2-level dining and entertainment hub with 19 outlets. The concept is designed to position F&B as a strategic anchor in our ecosystem, redefining urban retail as a space for experience and celebrations. Its diverse mix of global and local cuisines have resonated strongly with our patrons, driving repeat visits, longer dwell times and higher consumption across the centers. Our malls have long served as the social anchors and density centers, and we continue to evolve them to stay ahead of the changing consumer expectations. The success of Gourmet Village is a reflection of this evolution, and we are now scaling the model across our portfolio as we strengthen our positioning as preferred social and F&B destination. Moving on to our leasing strategy. We are strategically curating and optimizing our retail mix through rightsizing and planned churns to ensure stronger productivity. We are also upgrading underperforming spaces, introducing premium and high-performing brands across categories of fashion, jewelry, athleisure, watches, beauty and F&B to further elevate the shopping experience. Early results are visible in robust retailer sales with sales on a per square feet basis, up over 20% at Phoenix MarketCity Bangalore and 11% at Phoenix MarketCity Pune. With the festive momentum clearly seen across our centers, we remain confident of delivering double-digit growth across our retail portfolio in FY '26, driven by strong consumer demand, robust retailer sales and continued brand enhancement. Going forward, we will continue to build on this momentum through strategic leasing, enhanced customer experiences and ensuring growth across our portfolio. I would now like to hand the call back to Varun to take you through the next set of highlights.

Thank you, Rashmi. Moving on to our office portfolio. We remain firmly on track as we build a premium office portfolio, which is seamlessly integrated with our mixed use ecosystem. Each of our offices is envisioned as the best workplace in a city, combining world-class infrastructure, sustainability and the vibrancy of the retail-led environment right at its doorstep. Over the past 2 years, we have more than doubled our office footprint from 2 million square feet across 2 cities in 2023 to now nearly 5 million square feet of completed offices across 4 cities. Key milestones this year include the completion certificate for 1 national park in Chennai and Phoenix Asia Towers in Bangalore as well as Tower 3 of Millennium Towers in Pune. All our office buildings also have the USGBC LEED Platinum or LEED Gold certifications, which reaffirm our commitment to sustainable, world-class office environment. Leasing momentum in offices has been strong, with over 1 million square feet of gross leasing achieved across Mumbai, Pune, Bangalore and Chennai assets by the -- during this year, by the end of October 2025. And occupancy at our operating assets in Mumbai and Pune have improved from 67% at the end of March 2025 to now over 77%. For the first half of FY '26, income from our operational offices stood at INR 106 crores, with EBITDA coming in at INR 67 crores. The robust lease in momentum during the first half of this financial year, position the office portfolio for a significant uplift in financial performance going forward. Turning to the Hotels portfolio. The business continued to deliver steady performance with income of INR 244 crores, up 5% year-on-year and EBITDA up 16% to INR 105 crores for the first half, translating in to healthy margins of over 43%. The St. Regis Mumbai maintained a high occupancy of 85% and also an increase in average room rates of over 2% during the quarter underscoring the resilience and premium positioning of our Hotels portfolio. In the Residential business, our sales momentum has been strong. And during the first half of this year, sales have already crossed INR 287 crores surprassing the full year sales done in FY '25. Revenue for the quarter was about INR 171 crores, led by sales at [indiscernible] at pricing in excess of INR 27,000 per square feet, reflecting sustained demand for our high quality residential products. I would now like to invite Kailash Gupta to take you through the financial highlights.

Thank you, Varun, and good evening, everyone. At the group level, revenue from operations for the quarter stood at INR 1,115 crores, up 22% year-on-year basis. And EBITDA grew by 29% to INR 667 crores. Net profit for the quarter was INR 304 crores, up 39% year-on-year basis. Operating cash flow after working capital, taxes and interest expense was at INR 981 crores for H1, up 21% year-on-year basis. Total CapEx for this H1 was INR 658 crores, largely towards the construction of the various projects ongoing. Our balance sheet remains prudent. Gross debt less is less than INR 5,000 crores, and overall liquidity remains very strong. Net debt, in fact, declined by INR 500 crores in the H1 and currently stood at INR 2,200 crores. Our net debt-to-EBITDA ratio remains healthy at less than 1% -- less than 1 time. We have also reduced our average cost of debt from 8.5% to 7.6%. I think this is truly a good benchmark for any company of our size. Overall, strong cash generation and a disciplined capital framework give us ample headroom to invest in high-quality assets while preserving financial flexibility, positioning us well for the next phase of growth. Just to give you some highlights on the CPP transaction. So this transition was declared in the last Board meeting, which was on 24th of July 2025. Post that we have received CCI approval, shareholder approval and we also completed all the CPs. And now we are ready for the first tranche payment. The first tranche payment most likely will be processed during the first week or the second week of November. And the total INR 1,257 crores payment has been completely tied up. So the outflow will not really put any liquidty pressure on us. This brings me to the end of the financial numbers. Over to you, Varun.

Thank you, Kailash. Before we hand over to the operator for questions, we would like to share an update with you. As you are aware, we recently announced the elevation of Mr. Shishir Shrivastava to Vice Chairman at The Phoenix Mills. Shishir has been an integral part of Phoenix Mills journey since 1999, and his story is deeply intertwined with the company's growth and evolution. Over the past 26, 27 years, he has worn many hats across the modernization, leading diverse functions with remarkable depth and versatility. His leadership, vision and unwavering commitment have guided Phoenix through numerous milestones from transformative growth phases to navigating challenges such as the COVID-19 crisis. On a personal note, I've had the privilege of working closely with Shishir for over 10 years. It has been a truly enriching journey marked by invaluable learning and inspiration. And as he transitions to the role of Vice Chairman, we look forward to his wisdom, perspective and mentorship remaining a cornerstone of our journey ahead. With that, I would now like to hand over the call to Shishir to share his thoughts.

Thank you so much Varun. Those were very kind words. Good evening, everyone. I would like to take this moment to express my sincere gratitude to the -- for the tremendous support and trust you've all shown in me throughout my tenure at the Phoenix Mills Limited as the Group CEO and Managing Director. It's been an incredible journey filled with learning, collaboration and shared achievements, which I will always cherish. As I move into the role of Vice Chairman, I genuinely do so with a deep sense of pride in what we've built together, and complete confidence in the leadership that will take PML forward into its next exciting chapter. The Phoenix journey has always been about building enduring value. And I'm confident that the team's focus and discipline will continue to create long-term growth. So I'll be stepping back from day-to-day operations. I look forward to staying closely involved and continuing to work with the team, guiding, mentoring and contributing strategically as we shape the company's future. We can now begin with the Q&A round. Thank you, everyone.

[Operator Instructions] Ladies and gentlemen, we will wait for a moment. The first question is from the line of Puneet from HSBC.

Yes. Congrats on good performance. My first question is actually with respect to your Slide 24 where you talk about the Residential and Other Income and Residential and Other EBITDA. Can you elaborate a bit more on what this income is? And how is the margin so high?

[ Rent ] business, basically, we have the One Bangalore West and Kessaku in Bangalore. So this is a site where the inventory is almost -- it is ready, actually, and it can be -- I mean, ready to sell any time. During this quarter, we are able to make a INR 282 crores as a total sales number. But we could have booked the entire thing, because of the pending documentation we're almost INR 100 crores. So this Inventory -- because it was -- the land has been bought in 2008 and the construction has been completed around 2 years ago. So that's why the total cost of construction, including the land is around 25%. And the realization, as you know, is one of the highest in the country -- highest in the Bangalore.

Okay. So 57% EBITDA margin is how I should [ stenciling ] for future as well?

For the existing inventory, Puneet, that would be the correct answer. At 56%, 57% would have typically be the range for the balance old inventory. And Puneet, P&L perspective, so costs are being recognized on a historical basis. From a cash flow perspective, what we are selling today flows straight down to the free cash flows.

Yes, understood. Secondly, if you can talk a bit about when should one see normalized performance coming back for Pune and Bangalore?

Rashmi, you want to take that? Pune and Bangalore, with all the churn.

Yes. I think we've already seen some of that performance coming back because some of the stores that were under churn have already opened up. And by end of the financial year, we'll see most of that area that is operational. And in fact, when we talk particularly about performance, we are already seeing double-digit trading density growth in both Phoenix MarketCity Bangalore and Pune. So I think both of them are already showing the growth traction coming back. And over the next 2 quarters, we see most of it trading and coming back. I would say over 90% -- I would say over 90% trading by March 2026.

Okay. Both the places, Bangalore and Pune?

Both the places.

That's very helpful. And secondly, just on the office side, while your occupancy indeed has been stuck on your existing portfolio, rentals have not really caught on, if you can throw some light there as well.

So Puneet, these leasing has been done between April and October now, and you'll start seeing the flow-through in the rent and EBITDA happening from quarter 3 and quarter 4 of this year. So Puneet, as is typical, you will have a fit-out period, et cetera, before the rent starts flowing through. So typically, depending for large spaces, it could be as much as 3 months. So that's the -- yes.

So the occupancy you've shown is the leasing occupancy and not a title...

That is the leased occupancy. Yes. Yes, that's correct.

And lastly, on the financial side, there is a -- seems to be a dividend payment of INR 175 crores in first half. What does that relate to?

Puneet that relates to -- its dividend from our joint venture with CPP, which is Island Star Mall Developers. This dividend has been paid in the ratio of our respective shareholding. So Phoenix Mills has received 51% or INR 89 crores. And CPP has received 49% or approximate INR 85 crores -- INR 86 crores of this dividend.

This forms part of the total consideration. It's just one of the heads under which the total consideration of INR 1,257 crore, which is tranche 1 will be paid out. So this is part of that.

But this is already paid out, right? In first half.

No, it's been paid out only recently in this last -- I think last few days of -- yes, last few days of September, it was -- or first week of October. Declared last week of -- and paid out in first week of October.

Okay. That's helpful. And on the debt side, it's quite commendable to see such low cost of debt. Could you say that -- how would this cost of debt pan out when you start paying out CTV on your gross debt levels will go up. Would you anticipate similar cost of debt, assuming interest rates remain where they are?

Absolutely, Puneet. All the debt that we are looking at raising even at the asset level, it's primarily going to be LRD and it is going to be at the similar price range.

Puneet, just to give you 50%, 60% loan has already been tied up by now.

Great. So similar range, 7.7 types.

Correct. Absolutely.

The next question is from the line of Praveen Choudhary from Morgan Stanley.

I have just 1 quick question. The net debt to EBITDA of one turn that's absolutely commendable. It's very good. I just wanted to see if you have a number in mind, which is your peak net debt to EBITDA that you can go to. That will also tell us in terms of what kind of growth you can go for apart from buying a piece of land that you have for the next 5 years, what else could you do to improve or increase the gearing to drive growth? I'm just trying to see the peak number that you can go to.

So we continue to look at our overall cost of funding, Praveen. And for the present, we estimate that we will be in this range of between 1, 1.5. At the peak worst case, we may go up to 2. But that would be -- that is going to be perhaps even if it happens, it may happen for only a short period of time when we may peak and be able to reduce it from the internal accruals. So we don't -- so potentially, we really want to raise capital for growth, we could go even 7x, but that's clearly not the intent. Our current policy is to stay in the range of where we are between 1 to 2x of EBITDA.

That's very clear. And if I could add 1 more question. In terms of land banking, in terms of acquiring great locations, are you done because you clearly have a very good road map or you're still looking for Tier 2 cities and still [ scraping ] through buying land?

See, we have clarity on what assets we are delivering between now and 2030. Our continued -- our goal continues to be to build out at least 1 million to 2 million square feet of retail every year even beyond that. So land acquisition is going to continue to go on. It's -- there is no end. It's a routine for us, and that's a plan that we have. So 1 million to 2 million square feet of retail delivery every year beyond 2030, accompanied by other asset classes such as hotel, office, commercial, residential, depending on the demand at that micro location. So we will continue to acquire land to deliver this.

And Praveen, just to add to what Shishir is saying, we are already having a list of cities actually which we have identified, and it is part of the [indiscernible] all the time.

Understood. And the last question I had was on the consumption growth and retail rental growth. I remember a couple of years back, you had mentioned that same-store sales growth can be as high as 10%, 11%. It has been single digits for some time. Could you highlight what will drive us back to double-digit growth, please?

So some of the impact to our sales growth, as we've spoken a little earlier in today's call and previously as well has come about on account of us reducing trading area by way of churn, so that space is undergoing a fit-out or a change in brand and premiumization and other initiatives that Rashmi will explain to you. So some part of the impact on our consumption growth has come out of area not being available to trade due to churn. We are seeing -- it's been a fantastic season for us this year -- this month of October, and we expect to see these trends to continue through for the next -- for the end of this quarter and perhaps even the last quarter of this financial year. Rashmi, would you like to add?

Yes. In fact, we have seen this trend is already coming back. I was earlier mentioning that fashion and accessories grew at 17%. We are seeing family entertainment and multiplexes have shown a growth of 23%. Athleisure watches grew over 15%, likewise jewelry. So I see that this trend is actually coming back strongly. And the festive season has been very good as well. So the numbers for the festival season are going to be even higher than what I'm telling you. So in fact, this has had a strong comeback, I would say, in terms of the double-digit growth this quarter, and we will see it only growing in the next quarter.

Also, if you take a look at Slide #7 of our presentation, you will see that 5 out of the 12 retail assets here have demonstrated double-digit growth in this last quarter. And the others is where Rashmi has explained the asset and brand enhancement initiatives that are...

Yes. And even those 2 centers where we are undergoing a major churn, Phoenix MarketCity in terms of trading density, grew at 20% and Pune in terms of trading density grew at 11%. So we are seeing a double-digit growth all across.

Okay. That's very clear. And thank you very much. Congratulations on great set of results. Look forward to see you soon.

[Operator Instructions] The next question is on the line of Parvez Qazi from Nuvama Group.

A couple of questions from my side. First, we have seen pretty decent improvement in leasing on the office side in Q2. So what is incremental progress here, let's say, by the end of FY '26 where would we be in terms of the leasing status in the 2-odd million square feet recently completed projects on the office side. Second, some status on the under construction assets, both on the retail and OpEx side will be great.

Parvez, with regards to the existing operating office assets that we have, we've mentioned that our internal goal to the team has been to hit an average of 80% across all assets by the end of this quarter, 80% to 90% is the target. If we just look at the progress that we've made and which has been almost 1 million square feet of leasing that we've achieved in this financial year, we are really excited that the team and the new leadership -- under the new leadership is going to continue to demonstrate strong leasing progress and we hope to achieve our target. For the second part of your question, which is an update on the retail assets under construction. And Rashmi, if you would like to take that one.

So the retail assets under construction, leasing is progressing very well. We have Kolkata, which is leased over 75%. Surat is also close -- at least close to 35%, 40%. And we are doing expansions at the Bangalore Center in 2 phases. The second phase, which is the F&B expansion is leased over 60%. Next is the expansion here at Phoenix Palladium again which is receiving a very good traction. And apart from that, we are building flagship centers in Chandigarh and Thane where currently, we are at the drawing board stage in terms of the architectural plans and the larger vision for the center and for those centers as well we've received early very good traction from the retailer community. So yes, we are very excited about all the new projects. And so likewise, is the retail industry.

So in terms of project completion, Parvez, we'll just complete that. In terms of project completion, we are happy to report that we are on track both on budget and on time lines. We are expecting the Grand Victoria Mall Kolkata to be ready by sometime in the third quarter of FY -- of calendar year '27. Similarly, the mall at Surat is going to be -- see a similar time line. In Bangalore, the retail expansion is expected to be completed in the next calendar year, again third quarter of next calendar year. The office expansion at -- Phase 1 office expansion at Phoenix MarketCity, Whitefield will also be completed simultaneously in the third quarter of the next financial year. And the Grand Hyatt Hotel is slated to open by the end of calendar year 2027.

Sure. Last question. When will we be repositioning in the Palladium [indiscernible] date complete?

We've already started that. And I think next year, you will see a lot of it in terms of execution that will be visible at the mall level.

The next question is from the line of Parikshit from HDFC Securities.

Can you hear me now?

Parikshit, we can hear you. How are we doing?

Yes. Congratulations on your elevation, Shishir. So my first question is on the like-to-like consumption growth in the Mumbai Mall -- Palladium Mall, so if can help us understand adjusted for the increased area -- GLA area.

Sorry, can you just repeat your question properly?

The Palladium Mall, what is the like-to-like consumption growth Y-o-Y adjusted for the increased GLA?

13% is the answer for that. Like-to-like -- without accounting for the additional area, like-to-like growth is 13%. There is adjustment for the area, which has been demolished as well. So did you get that, Parikshit?

Adjusted for the demolished area as well you're saying, -- so like ...

Adjusted for the demolished area and not accounting for the new space. So like-to-like growth for the stores that continue to operate or the area that continues to operate from last year.

Okay. And in particular, what was the drivers I mean such a -- I mean, because this seems to be a matured mall, it's a matured mall? So what was driving this -- I mean, stupendous growth of 13%, so...

I would say Gourmet Village has been instrumental in driving that growth out of the 19 outlets, 14 are already operational. And with all the Marquee Brands that we have in this place, I think it's -- the stickiness is coming from the new F&B destination that we created. The city is loving it. We have new customers that are walking in. We have repeat customers. We have increased dwell time. And in fact, this is something that we are seeing that F&B is really becoming the new anchor in terms of anchoring the growth all across. And the other thing is what we are seeing all across is that fashion has picked up. And even in Phoenix Palladium, we've seen a growth of 15%. Watches, beauty again have shown a growth of 15%. And I think generally, the overall mall is doing very well in terms of consumption growth.

And to add to that, there are a lot of new brands that Rashmi and team have launched in this quarter -- at location. So the brand premiumization -- brand premiumization is driving higher consumption.

Yes, we've had a lot of new brands.

New cafes, new brands, the Gourmet Village as she said, just recap, all of these strategies have worked out and led to this growth.

Okay. I think that's helpful. Second question is on PMC Bangalore and Pune. So I mean there, the growth has been muted. So what are we doing there to again report much better growth in the future?

So you know both Phoenix MarketCity Bangalore and Pune, it's a strategic churn. So while Phoenix MarketCity Pune is trading at 85%. The leasing occupancy is 94%, and a large portion of the new brands are currently already under fit up. Likewise, in Phoenix MarketCity Bangalore, while the trading occupancy is 82%, the leasing occupancy is 97%. And there, again, some of the brands have already opened, and a lot of our other brands are under fit out currently.

So as Rashmi already explained earlier on the call, Parikshit, we are expecting that this last quarter of this current financial year is when you will start seeing the effect of all of these stores, which are not trading today, but leased occupancy stands at 97%, as Rashmi explained in the case of Pune and Bangalore. You're going to see the impact of all of this to the consumption in this last quarter.

Sure and just the last question on the residential piece. So now Alipore, I think you spoke last quarter that we are getting from launch. So any update there? And also on Bangalore last phase of launches. So the new last -- I think, the last tower, so any update on that?

No, we are working on our plans and approvals and construction at site over there where development is underway. We'll come back to you. Hopefully, we'll have some significant updates for you in the next quarter.

Both on Alipore and Bangalore, right?

On Bangalore, as you know, I was talking about Alipore resi. What's the question on Bangalore, if you could repeat that.

So Bangalore also, I think, one tower -- the areas yet to be launched. So when do we expect that to come for launch?

Towers 8 and 9, we are -- we have the plans finalized. In fact, you will remember that several years ago, we had already completed the work up to the plinth level for these towers. We are currently waiting to exhaust a significant amount of our existing inventory before we launch another premium product in that market.

[Operator Instructions] Next question is from the line of Pritesh Sheth from Axis Capital.

And congrats to Shishir on your elevation. First question on the category-wise growth. As you highlighted, like quite a healthy growth across categories. Just want to understand -- how much of that is probably some effect of base last year? And how much do you think as is in the GST-related consumption boost has contributed to this growth? And how do you think about it going ahead in terms of categories which are going to benefit most with whatever the government is trying to do. Yes.

Pritesh, let me take the first part of that question before I hand it over to Rashmi. I think I would say that what you're seeing as like-for-like growth is what you're seeing is overall growth in the category is quite coming from like-to-like areas. The area that was in operation last year versus the area that is in operation this year, there has been no change in that. At the same time, we have been carrying out brand changes, whether it is at Phoenix Palladium or at our other malls. And the impact of some of this churn as well -- and the underlying pent-up demand is what is showing such strong growth on a like-to-like basis. And in fact, like Rashmi mentioned in our opening remarks, the growth that you are seeing is very broad-based across categories and across all [indiscernible] that answer your question?

Yes, yes. I was just trying to see how much of that is because of the base effect of whatever weakness we had last year, post elections and overall weaker consumption environment? And how much is because of the GST-led benefit? Has anything of that trying to come through or probably yes.

I don't think anything has changed structurally. There are 2 aspects which have contributed for this growth across categories. One is clearly the premiumization that we have already carried out across our locations. There are completion of some projects which have led to driving consumption growth. There is brand changes, which have led to driving consumption growth. And yes, there has certainly been a positive impact of the GST. But one has to consider that, that has probably taken effect only in the last part of this quarter. That has only had an effect of maybe a couple of weeks in this last quarter. So it's the growth that you are seeing in for the quarter -- for the second quarter or the first half of this year is not on account of GST. It's account of several initiatives. I don't think structurally anything has changed that the base was very depressed last year and that's been an effect there. I don't -- I would not take that view.

Got it. And which category you think will continue to see this kind of healthy double-digit kind of growth?

Well, we have across different locations, we have different strategies of what we are taking as initiatives for -- undertaking initiatives for brand churn or category changes, et cetera. So at different locations, you'll see different impacts coming from different categories. For example, you'll see F&B impact in a few of our malls, you'll see fashion category is growing faster than others in a few of our malls where we have new brands opening up, more premium brands opening up. So it will be a mix of it all.

Got it. Fair enough. That's very clear. And second question on your Slide 11, where you have broken down the trading occupancy impact and the trading density increase, I'm just trying to understand now that once we get back to a mid-90s kind of trading occupancy for all these malls, you think that trading density can remain at similar levels or can has the potential to further go up with the kind of brands we are bringing. And then overall will it boost the growth even better than just the trading occupancy increase that we will see? So how do you think about this growth?

You know our business as well as we do, I think, because it's quite clear and evident, right? All of these initiatives that Rashmi and our team have undertaken which have resulted in a temporary dip in occupancy is all driven to drive a higher trading density.

And to add to that, you have to look at consumption and trading density together and not in isolation, right? Because like we mentioned, we are churning a lot of anchor areas at current. So you may see a little spike there when you look at trading density in isolation. But like Varun mentioned earlier, the positive part is that when we churn, we are churning out the low-performing brands, and we bring in the high-performing Marquee Brands. So overall, you're going to see a jump in both trading density and consumption. When you compare it with the previous year at the end of the financial year, you will see a robust growth, both in consumption and trading density as compared to the previous year.

Got it. Got it. So absolutely. I was just trying to understand, once occupancy ramps up, will that be the only lever for consumption growth? Or even the trading density will further increase and both will add up to overall consumption growth. That's what I was saying.

[Operator Instructions] The next question is from the line of Abhinav Sinha from Jefferies.

Shishir, just a few questions here. So on Palladium Mumbai, are we now done with this round of changes? And is that fully reflected in trading density? Or you think maybe 1 or 2 more quarters, we will see the stabilized numbers?

As you know, we have that entire project rise and convergence -- convergence is the area adjacent to the courtyard, which we have demolished. That is under development, and it's being done in parallel with the other part, which is a little behind where you also have the offices in the tower above, right? So that is going to add another 200,000 square feet of retail space, additional 200,000 square feet of retail space, which will further drive growth in consumption. And of course, GLA, additional GLA.

Okay. I wanted to ask if for the current changes which we have seen with the Gourmet Village open now -- so for that area, is it the correct quarter or...

We still have a few stores yet to open over there. So maybe you should look at the performance of next quarter to understand what the consistent performance of that block is going to be. If you want to estimate some type of projection on what the...

The 91% trading occupancy that we have on 1.03 million GLA, this includes the recent demolition or does not include?

No, no, it is adjusted for that area. It's taken over...

Okay. Okay. So we should be at say 98% very soon on trading occupancy, right?

Absolutely, absolutely.

Our leasing percentage is already 98%.

Right. And Rashmi, that should be fully operational and reflected in the trading density and the consumption by the March quarter? Is that right?

Yes, it certainly will. It's certainly will.

Okay. In Bangalore, also -- PMC Bangalore. So I see that the density has now jumped up massively by like some 21%. So clearly, there is active churn. And this number is a very close to Palladium. So is this like going to be the stable ratio, let's say, Palladium moves to 50 -- 3,500, so this moves to 3,100 or something?

So in the long-run, yes, Bangalore is emerging as a very strong market. Our center in Bangalore is emerging as a very strong destination. And with all the efforts that we are putting in and we will continue to put in, in terms of premiumization, upgrading the asset, bringing in new brands, new experiences in the center, and there's generally a lot of organic growth also around the center. So in the long-run, yes, the center holds very strong potential.

Abhinav, Rashmi is going to enjoy every center is going to be a Palladium, okay? We love all our [indiscernible] equally.

Right. Shishir, on the other land parcels, so you've given us good updates on Victoria and Surat. The 3 other ones, Coimbatore, Mohali and Thane. When do we start seeing proper construction plinth level, et cetera?

So Abhinav, as you know, our process, you've seen how we've built our malls in the past, and we've been able to stay within time lines and budgets. We get into detailed designing before we break ground. We wait for all of our approvals in place before we break ground, and we ensure that we have 50%, 60% visibility on the project costs by way of tenders awarded before we break ground, okay? Because once we break down, then we move very, very fast. And don't get stuck for lack of approvals or lack of clarity on design or site issues. I'm happy to report that for our Chandigarh project we've recently -- just last week, we've received the environment clearance. We are going into other approvals now. Coimbatore is about to commence construction probably in this quarter. And as far as Thane is concerned, again over there. We've got our preliminary approvals in place. we've applied for the environment clearance. We've got the terms, the TOR has -- draft has been approved, we're in that process. So we are on track. Typically, we have a 6-year program from the time of acquisition before the mall gets operational, and we are well on track to achieve that across these 3 locations.

The next question is from the line of Biplab from Antique Stockbroking.

Congratulations, Shishir. I have just 1 question. Could you outline -- could you share what retail and office assets are expected to come on stream say, in the next 3 years, in FY '26, '27, '28?

Okay. I'll cover it again, briefly discussed this earlier, let me put it down for you again. We have the Phoenix Grand Victoria Mall Kolkata likely to be operational in calendar year 2026. We have -- just one moment -- yes, we have the Surat mall, which is also going to be operational in calendar year 2027. In Bangalore, Phoenix MarketCity, the retail expansion is expected to be completed in calendar year 2026 by the third quarter. Bangalore Phoenix MarketCity offices that we are building there, Art Exchange, the first phase will be operational in calendar year 2026, 3rd quarter. And we expect the Grand Hyatt Hotel at the same development to be operational a year later in 2027.

Okay. So Kolkata in '26, Surat in '27?

So Kolkata also in '27.

Calendar year?

Yes, calendar year or you can say third quarter FY '28.

Okay. And when do you expect the project rise mall in office to be ready?

Same time, calendar year 2027, maybe in that third quarter of the calendar year. So all of our projects are getting delivered between '26 and 2027. And then, of course, Surat -- the Thane and Chandigarh and Coimbatore will be in 2030 and thereafter.

The next question is from the line of Akash Gupta from Nomura.

Am I audible?

Akash, yes, we can hear you.

Just 1 question on my side. I just wanted to understand the impact on the consumption -- on your retail malls after the GST tax cut. How has consumption improved? And how are you thinking about it going forward?

I think we covered this a little while ago when -- but see how -- it's very difficult to gauge the impact. We believe that there has been an impact of the GST changes, but that would have only been in the last 2 weeks of this quarter under discussion. So we are clear that the consumption growth that we have seen in this last quarter has been driven on account of the operating initiatives and asset enhancement and brand enhancement initiatives that have been undertaken by Rashmi and the team.

The next question is from the line of Puneet from HSBC.

Yes. My first question is on the Indore mall. There seems to have been some -- bit of issue on the infrastructure side, but yet consumption has grown quite nicely, 15% of our -- a few quarters now. EBITDA hasn't caught up, can you elaborate on why there has been this discrepancy?

Sorry, what is the discrepancy, Puneet? May I request to repeat it.

Yes. So the consumption in Indore mall has been growing quite nicely, 15% despite the infrastructure-related issues, but the EBITDA hasn't grown as much.

You know that typically, you would see a 3-month -- 2- to 3-month lag between consumption and growth and this impact on the rental or amount of incremental rental on revenue share. So currently, the brands over there have now started breaching the minimum guarantee threshold and they will start contributing the incremental rent on account of revenue share. It will take -- we are hoping that with this infrastructure getting completed and access improving in this, let's say, in the first quarter of the next financial year, we will start seeing some significant positive impact, both on construction and...

But for last 4 quarters, you are double digit in consumption, but rents have lagged. That's the only -- that I'm trying to understand.

Yes. Also, Puneet, for this period, we have had discussions with our retailer partners. And when there has been an impact on account of the infrastructure on the overall consumption in the mall, we are also sensitive. We are equally there, right? So we have adjusted for rentals. We have given them some waivers.

Extended some support. We do see that the flyover that is under construction is having a short-term impact on the retailer sales and because of that, we have extended some support to them in the short-term.

Understood. Very clear. And lastly, on Lucknow as well. You've been reporting leasing occupancy at 99%, but trading occupancy has stayed at 96%. Do you think one should think of this gap being bridged or it will largely remain at this level, some people will keep coming, some will go, keep on going on.

Puneet, I think that's, I would say, a normal part of our business, even when we talk about stabilized trading occupancy, we typically refer to levels of 95% plus, and we get -- in Palladium and in the Phoenix MarketCity malls like Bangalore and Pune, we have gone to 98%, 99% trading occupancy. But when it comes for churn, then you have -- then one faces a lot of operational issue and moving retailers around to create the right desired space for a new tenant. But 96% trading occupancy at Phoenix Palassio is very much the desired targeted occupancy, it keeps the center vibrant and healthy and yet leave some room for us to -- many who are retailers around when required.

And we're undergoing some strategic changes at this center as well, entering into the fifth year, and we are undergoing some strategic changes here as well.

That was the last question for the day. I would now like to hand the conference over to the management for the closing comments. Over to you, sir. On behalf of The Phoenix Mills Limited that concludes this conference. Thank you for joining us, and you may now disconnect your lines.