The Phoenix Mills Limited (PHOENIXLTD.BO) Q3 FY2026 Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Q3 and 9 Month 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. Shishir Shrivastava. Thank you, and over to you, sir.

Thank you, Danish. Good morning, everyone, and thank you for joining us today. It's a pleasure to connect with you again. During quarter 3 FY '26 across retail, offices, hospitality and residential, we saw strong festive demand and consistent execution. Consolidated revenue for the quarter stood at INR 1,121 crores, an increase of 15% year-on-year, while consolidated EBITDA grew by 19% year-on-year to INR 656 crores, underscoring the operating leverage in our platform. Retail delivered robust consumption growth of 25% year-on-year during the festive quarter, driven by broad-based demand across categories. In offices, we completed approximately 1.2 million square feet of gross leasing year-to-date, corresponding to nearly 25% of our portfolio with a healthy pipeline of advanced stage discussions. Our hospitality business benefited from strong occupancies and rate-led growth, while residential sales and collections continue to progress steadily on a year-to-date basis. Alongside this operating momentum, we continue to maintain a prudent and flexible balance sheet, supported by strong operating cash flows and disciplined capital allocation. This has enabled us to fund our ongoing CapEx and the ISML partner buyout primarily through equity, while keeping overall leverage at prudent levels. Our performance for the third quarter and the first 9 months of FY '26 reflect the consistency of execution across our platform and the quality of growth we are delivering. The strength of our model lies not only in scale, but in the productivity of our assets, capital efficiency and the resilience of our financial position. Even as parts of our portfolio undergo active transformation, the underlying business continues to compound, supported by resilient demand and disciplined execution across our portfolio. I will now hand the call over to Ms. Rashmi Sen to take you through the performance of our retail portfolio in greater detail. Rashmi, over to you.

Thank you, Shishir. Good morning, everyone. Phoenix Retail continues to set new standards through innovations, upgrades, new launches and meticulous brand creation. As you all know, we are upgrading our Phoenix MarketCity centers and premiumizing the brand mix by launching flagship formats, marquee brands and differentiated concepts to further strengthen these centers. A key thrust in scaling, experiential and F&B ecosystem, which ensure that our assets function as full-day social consumption and destination hubs. In parallel, we remain deeply focused on enhancing retailer productivity through carefully curated category mix and focused marketing initiatives. And above all, we continue to have a steadfast emphasis on enhancing profitability, driven by consistent rental growth and operating efficiencies. In Q3 FY '26, consumption grew by 25% at INR 4,992 crores with strong momentum across all categories. Rental income grew by 13% year-on-year to INR 573 crores, while EBITDA increased 16% to INR 585 crores, underscoring the operating leverage in our portfolio. For the first 9 months of FY '26, retailer sales reached INR 12,326 crores, marking a year-on-year growth of 17%. To put this in context, our full year consumption for FY '25 was INR 13,750 crores. And in the first 9 months of FY '26, we've already approached that level despite no new mall additions and with large parts of flagship Phoenix MarketCity centers under repositioning and upgrades. This highlights the underlying productivity uplift across the retail portfolio. Moving to consumption trends. Consumption performance during the quarter was broad-based, with growth driven not just by the festive demand, but also by improved tenant mix and higher dwell times. Within the mall portfolio, growth was led by Phoenix Mall of Asia, Bangalore, which saw 112% increase in consumption, supported by 22% growth at Phoenix Palladium, Mumbai, Phoenix Palassio Lucknow and 25% growth at Phoenix Mall of Millennium, Pune. All other centers as well reported a positive mid-teens consumption growth. From a category perspective, fashion and accessories grew 16% year-on-year. While family and entertainment and multiplexes were up by 19% on the back of strong film releases during the quarter. F&B grew by over 11% as well, while jewelry was up by 39%. This diversified performance reflects sustained consumer demand and the continued confidence of leading brands in the Phoenix platform. Moving to brand curation and leasing momentum. Turning to our retail partnerships. Our premium positioning continues to attract marquee brands. And as a result, we continue to deepen our partnerships with leading global and domestic brands, particularly in categories that are driving higher trading density and rental yield for us. Phoenix Mall of Asia, in particular, has emerged as a preferred launch destination with notable openings including South India's first Apple Store, the largest LEGO store in South India, Onitsuka Tiger's first concept store in India and several others. We remain focused on improving portfolio productivity through a more curated retail mix, including rightsizing planned brand refresh and selective upgrades. We are also introducing premium high-performing brands across key categories such as fashion, jewelry, athleisure, watches, beauty and F&B, which is beginning to reflect in better productivity metrics. A direct reflection of the churn and brand refresh can be seen in the notable improvement in trading densities at both PMC Bangalore and PMC Pune. At Phoenix MarketCity, Bangalore, trading density grew to INR 3,011 pspm for 9 months FY '26, by 23% year-on-year. With nearly 80% of the planned transformation already executed, trading density levels at the center are now approaching those of Phoenix Palladium, Mumbai, which have been about INR 3,400 to INR 3,500 pspm between FY '23 and '25. Similarly, PMC Pune recorded a 14% increase to INR 2,214 pspm, with 19% of its GLA under transformation and over 1/3 of new brands already operational. These results demonstrate immediate value unlocked through our asset upgrading initiatives. Beyond retail, we are integrating active lifestyle elements into our malls. A key example is the Phoenix Racquet Club launched in December '25 at Phoenix Palladium Mumbai. Located on top of the mall the facility integrates paddle and pickleball courts with open air cafe and community spaces, creating a lifestyle-led community-driven destination with a luxury retail environment. In just its first month of operations, the Racquet Club welcomed over 1,000 customers, attracted sponsorships and generated approximately INR 50 lakhs in revenue, while also meaningfully increasing engagement and repeat visits at the center. Our expanded F&B ecosystem comprising cafes, restaurants, dining concepts continues to act as a powerful catalyst for engagement. Our Gourmet Village at Phoenix Palladium, a 2-level dining and entertainment destination launched last year, has validated this model by increasing repeat visits, lengthening dwell times and boosting same-store sales growth across the center. Having proven the concept, Gourmet Village now serves as our blueprint for similar rollouts across Phoenix portfolio, especially Phoenix Palassio, PMC Pune, PMC Mumbai and PMC Bangalore. Alongside growth, we maintained a strong focus on capital and cost efficiency with marketing and energy costs serving as key levers for improving asset level returns. One such is example in the reduction of our retail marketing spend by 15% during Q3 FY '26. We achieved this by pivoting towards high-impact targeting initiatives and deeper collaboration with our brand partners. By shifting to sponsored activations such as Sephora Christmas, Armani, Diwali decor at Phoenix Palladium, sharper targeting of high-performing brands and leveraging influencer-led hyperlocal strategies, we have proven that we can do more with less. Despite the leaner spends, we saw positive footfalls, delivered higher consumption growth and meaningfully scaled revenue share income. Our marketing is not just cost efficient, but materially more effective at driving both engagement and monetization. We've also made meaningful progress on sustainability and cost efficiency. Renewable energy now accounts for 30% of our retail energy requirements for common area and HVAC, up from 20% during Q3 last year. We are currently in advanced discussions with multiple renewal energy providers to further scale adoption across the portfolio. Looking ahead, we continue to see good visibility for double-digit growth across our retail portfolio in FY '26, supported by strong consumer demand trends, healthy retailer performance and ongoing portfolio enhancement. With a significant portion of our portfolio coming up for renewal over the next 5 years, major expansions across our existing Phoenix assets and a secured launch pipeline through 2030, we are well positioned for sustained value creation through disciplined execution, leasing and productivity enhancement. I will now hand the call over to Varun to take you through the next set of highlights.

Thank you, Rashmi. Turning to offices. Our focus continues to be on building a differentiated, high-quality portfolio that complements our mixed-use developments. We are prioritizing well-designed, sustainable workplaces that benefit from being embedded within an active retail and lifestyle ecosystem. Over the last 2 years, this strategy has resulted in a significant expansion of our office platform. From a base of around 2 million square feet across 2 cities in 2023, we have scaled now to nearly 5 million square feet of completed office spaces across 4 cities today. In fact, during this year, in Pune, we received occupation certificates for the entire Millennium Tower complex. He also achieved the prestigious USGBC LEED Platinum Certification in November '25 for Millennium Towers in Pune. In fact, as a key strategy of our sustainability initiatives, all our new office developments are USGBC LEED certified, reflecting our emphasis on sustainability and long-term asset quality. Leasing activity for offices through the year has been very healthy and increasing. By December '25, we have achieved nearly 1.2 million square feet of gross leasing across our office assets in Mumbai, Pune, Bangalore and Chennai. Occupancy at our stabilized assets in Mumbai and Pune increased to 76% from 67% at the end of March '25. And in our recently completed developments across Pune, Bangalore and Chennai, lease occupancy now stands at about 41%, with advanced stage discussions, providing good visibility for continued ramp-up across this portfolio. For the first 9 months of FY '26, our operational office portfolio comprising of our assets in Mumbai and in Viman Nagar, Pune, generated income of INR 162 crores with EBITDA coming in at INR 103 crores. With the leasing progress achieved during the year, the office portfolio is now entering the transition from a build and lease phase into a rental monetizing -- monetization phase with newer assets expected to begin contributing meaningfully to earnings and cash flows from FY '27 onwards. Turning to our hotels portfolio. The business delivered a strong performance during the period despite a tough macroeconomic sentiment. For the first 9 months, income stood at INR 423 crores, reflecting an 8% year-on-year increase while EBITDA meaningfully grew much ahead of revenue at 16% and reached INR 190 crores. Our EBITDA margins for the 2 hotels were very healthy at 45%, with an improvement of 300 basis points over the same period last year. The St. Regis, Mumbai drove this EBITDA improvement, operating at a healthy 85% occupancy for 9 months of financial year '26, with average room rates crossing INR 20,000, up 8% year-on-year. Growth was driven by a deliberate shift towards higher-yielding segments such as retail-led demand and celebrations, strong performance in Events and F&B and a continued focus on experience-led differentiation. This reinforced the role of our quota of hotels as yield-enhancing extensions of our mixed-use ecosystem. Courtyard by Marriott, Agra delivered a resilient performance despite a softer city environment, maintaining strong occupancies and market share during the peak season. I will now hand the call over to Kailash to walk you through our residential portfolio highlights and broader financial results.

Thank you, Varun. Let me brief on the residential piece. In the residential business, our sales and collections momentum sustained in the first 9 months. Gross booking for the first 9 months were around INR 412 crores. Revenue recognized for the 9 months is only INR 273 crores. So essentially, INR 180 crores is likely to be booked in the Q4, subject to the registration and other documentation completion. This is primarily led by One Bangalore West and the Kessaku. Pricing was in excess of around 20 -- INR 29,000 per square feet, led by the strong demand in the market. This performance reflects continued end-user demand for premium, well-located residential development and the strength of our differentiating product offering even in the selective market environment. On a financial overview, at a group level, revenue from operations for the quarter stood at INR 1,121 crores, representing a 15% year-on-year increase, while EBITDA grew by 19% to INR 656 crores. Net profit for the quarter was INR 276 crores, up by 4% year-on-year basis. Operating cash flow after working capital and taxes and interest stood at INR 1,508 crores for the 9 months, an increase of 24% year-on-year basis. Operating cash flow from our core businesses, excluding residential was INR 1,333 crores, up by 14% over the same period last year. Capital expenditure towards construction and ongoing projects during the first 9 months amounting to INR 722 crores. Moving to on the update on CPP transaction. So this transaction which we have announced in July 2025, and then post that, we have received necessary approvals and some CP conditions. So first tranche payment has been made for INR 1,257 crores in November 2025. With this, PML stake in ISML stand at now 58.33% up from 51% earlier. Our balance sheet positions remain prudent. Gross debt at 31st December stood at INR 5,200 crores with overall liquidity improving to INR 1,858 crores. The net debt as on 31st December was INR 3,344 crores. Net debt to annualized EBITDA remained at a healthy 1.3x. During the period, we also reduced our average cost of debt from 7.68% to 7.62% in December 2025. Sustained operating cash flow, a prudent balance sheet and a disciplined capital allocation framework provide us the flexibility to continue investing in high-quality assets, while maintaining strong cash, strong credit metrics and balance sheet flexibility. As we move forward, our focus remains on disciplined execution and productivity across the portfolio, and converting the scale we have built into sustained earnings and cash flow growth. We can move to the Q&A now.

[Operator Instructions] Our first question comes from the line of Puneet from HSBC Bank.

Congratulations on great performance on the retail piece. Can you talk a bit about what's happening in Mall of Asia, consumption level numbers off the charts, but rents still lagging, and it looks like it's much low. You're still at 88% occupancy. How should one think about the potential for growth on the rentals for this part of the portfolio?

Puneet, thank you so much for your question. And yes, I think Mall of Asia's performance has been phenomenal. We launched a mall in October 2023. And from there to today, it has nearly reached the levels that we see in Phoenix Palladium. We have seen several first-time global brands that have opened their stores at Phoenix Mall of Asia within our portfolio itself. And I will hand the call over to Rashmi now to share some key highlights on the type of brand mix that we have seen and the upcoming new retailers that are expected to open up in Phoenix Mall of Asia going forward.

So Mall of Asia has been seeing a great trajectory. It's built up as a destination center really fast. I think all factors have contributed to the exponential success of the center that we are seeing. Bangalore as a city has been thriving. It's a great location. When we acquired that land parcel, we knew that this is the location where we have to build the Mall of Asia. The architecture and the interiors that we've done for the center, I mean, the response that we received from the city, from the retailers who visit across the globe, they rate it as 1 of the best centers that they are seeing in recent times that has been built up. But above all, I think it's always the tenant mix. I think the tenant mix that we've achieved at that center is extraordinary. And we keep adding to that extraordinary tenant mix. In the recent times, we've opened the flagship store of Apple, Rolex, Onitsuka, several other BTL brands that have opened over the last 6 months. And not only that, we'll continue to see a lot of marquee brand openings over the next 3 to 4 months as well. And so this center continues to be on a great growth trajectory going forward. And we've seen a very positive rental growth trend at the center along with consumption. And we'll see a lot more of it in the coming quarters as well.

So in fact, Puneet, just putting some numbers for the benefit of everyone on the call. Consumption at Mall of Asia reached INR 732 crores for the third quarter, and it is up 112% year-on-year, while rental also has grown by 58% and quarterly rental for this asset reached INR 62 crores. In fact, occupancy right now is at 88%. And typically, you would see for the rest of our portfolio, all new malls are at 95% or thereabout in those trading levels. And even in Mall of Asia, in the coming next 2 quarters, we are going to see occupancy stabilize at the 94%, 95% level going forward. So we are hopeful that the consumption performance should continue going forward as well.

So there, if I look at consumption, it is just about 7% lower than High Street Phoenix Palladium, but rental income is almost half, right? I mean do you think it can trend towards the same as High Street Palladium? Or do you think structurally, it will remain lower there?

I think structurally, Puneet, you have to look at consumption and rent trajectory converging over a 3- to 5-year period. So there are times when we start off with a particular rental contract, the fixed rent kicks in immediately, whereas brands consumption take time to scale up. In Phoenix Mall of Asia, the rents, of course, started very strongly in the first year. We were nearly at INR 160 crores of annual rental last year. And this year also, we are seeing rents growing strongly. Now consumption for many of these brands is scaling up sharply, and we will see rents also aligned with this rising consumption growth in the coming quarters.

Secondly, Rashmi, on the broad portfolio, you've clearly outperformed the rest of the market on the retail side. All the retailer numbers were quite poor, and you guys have done extremely well. If you can talk a bit more about it, how much of it has to do with footfall versus value growth?

So that's a good question. So firstly, a lot of our retail partners tell us that their performance in our portfolio is an outlier, even though at a broad category level for them, the numbers may look very different. And if you look at the flagship stores across all the listed retailers we have, all of them have shown remarkable double-digit growth. So that was talking about the listed retailers. Secondly, we are seeing that growth has been spread across all categories. So whether we talk about the fashion category, gold jewelry category, you talk about electronics. Also, I think the other parameter, which has added to exponential growth this quarter, 1 is the festive season, of course. You see a sharp growth in numbers in Q3, which has the Diwali and Christmas festivities. You see this every year in our portfolio and generally in the market. What has further added to the growth is the strong repositioning that we've been doing in our centers, whereby we have churned out a lot of low-performing categories. For example, some of the malls where we had hypermarkets, which were very large, 30,000, 60,000 square feet. And the trend has changed towards shopping at such large hypermarket and churning them and converting them into high trading department stores or converting part of that area into high trading in-line flagship stores. That has impacted the overall trading as well. And further, we've had a lot of new marquee brands opening across our portfolio this quarter. And some of those individual brands have also done remarkably well, adding to the growth further.

Okay. And this is across the portfolio, right? I mean, even the Chennai...

Across the portfolio, because if you see our repositioning efforts, we've already -- we are halfway through the asset upgrades at the Phoenix MarketCity, Mumbai and Phoenix MarketCity, Pune. And some of the other centers as well. We have -- we opened the Gourmet Village here, which is an F&B destination at Phoenix Palladium and this is a very successful concept. While now we are taking this concept to other centers, but in some small ways, we have started making F&B changes across all our malls and marquee F&B brands coming in. So we are seeing the impact of that F&B change also across all our malls. In terms of marketing strategies and marketing plans, we've really been evolving. We have an excellent marketing team, and there are a lot of things we've been experimenting with on our marketing side. And we see a huge impact on the consumption side on account of the marketing initiatives we've taken. We are constantly focused on increasing the consumption of our brands and all activities and activations we do are in that direction. And so the inputs and our strategies are resulting in those outcomes.

Understood. That's very helpful. And secondly, Varun, if you can talk about where are we in terms of launching Kolkata residential? And what is the plan for Thane now?

So Puneet, on Thane, we have planned a retail-led mixed-use development. We acquired this land parcel back towards the end of 2023, in November '23. And from then to now, we have planned, I would call it a fabulous mixed-use district here with a destination retail mall with an area of approximately 1.3 million to 1.5 million square feet in terms of leasable area. Our office, a Grade A office tower for the growing district of Thane and the huge commercial demand that we are seeing emerging there. And luxury event center...

Sorry, how big office?

Offices right now, Puneet, they are between 0.5 million square feet to 1 million square feet. The overall FSI potential for Thane is in excess of 4 million square feet. So we are optimizing what we can add and what we can maximize in terms of the FSI consumption here in Thane without compromising on the experience that each user will experience when they come to this mixed-use platform. In fact, if I just add on Thane, Puneet, we are right now in the final stages of obtaining -- securing our approvals. We have -- we are awaiting the environmental clearance. And we, at the moment, have commenced demolition activities of the old existing structures on the Thane side, and in the next 2 or 3 months, we also expect to commence excavation and the subsequent construction activities. Tenders are already out for excavation, and we are also very soon going to be launching the tenders for the civil contract for constructing the entire development at one go.

That's interesting. And Kolkata, when should you expect the launch?

Kolkata Residential, I think we are in the final stages of approvals as well as design fine-tuning. I think in the coming 2 quarters, we'll come back and update you on the launch time line of Kolkata..

Our next question comes from the line of Pritesh Sheth from Axis Capital.

So just carrying forward the previous conversation on lagging consumption and revenue that we are seeing in most of the assets. And in fact, if I look at rent-to-consumption ratio, it's 11% this quarter. which was -- I think it is the lowest since we have seen in 2014. So if you can explain me what's happening here? You talked about eventually it converges, but does everything get converged? Because I understand jewelry brands, everyone might not be at MG plus variable. So you can correct me if I'm wrong. So just some insights and thoughts on that.

Sure, Pritesh. Varun this side. Let me take this question. One, Pritesh, I think the consumption growth during the quarter was very strong. And like Rashmi mentioned in her comments, all categories contributed to the strong consumption growth, including fashion, where we combine a number of categories and it accounts for 50% of our consumption area. We, in fact, saw strong 16% growth in consumption. And if I especially exclude the high trading density categories like gold, jewelry and electronics, the underlying growth is in very high double digits. And this is, in fact, the strongest growth that we have seen per se in the portfolio over the last 5 years. Rents per se at times are lagging factor. They -- we see rent growth happening when we enter into new contracts and retailers start paying the fixed rent from day 1, while their consumption scales up. Over the last 2 years, we have had very strong growth. And as we had indicated also earlier during this year, rent growth has sequentially improved as we have opened up new stores and revenue share has -- brands have crossed the revenue threshold and started contributing to revenue share.

So how much time...

I think in between from quarter-to-quarter and especially quarter 3, if you see, quarter 3 is a quarter with more emphasis on high trading density categories such as gold, jewelry, et cetera, and consumption versus rent on -- in quarter 3 per se historically has also seen a bit of a divergence. But when you annualize it, consumption and rental growth is actually very near to each other over a 3-year period.

Got it. Fair enough. And second, on this trading occupancy ramp-up at MarketCity Pune and Bangalore. By when do you think we should be back at 95% considering these are already like well leased out. So a quarter from here, a couple of quarters, some time lines, if you want to attach to that?

Absolutely, Pritesh, I think we are on track to cross 90% trading occupancy in both Bangalore and Pune by March 2026, in line with our original time lines. And we have a lineup of some great first-time brands that are entering the city such as IKEA, Uniqlo, et cetera, that are opening their first store in the city of Pune. And Bangalore will also have a similar trajectory. I think you should expect to see the 95% levels by the middle of FY '27. In fact, 10% of overall area is already under fit-out at this point in time. So in a staggered way, we will see the launches happening in the next 3 to 6 months.

Our next question comes from the line of Murtuza Arsiwalla from Kotak Securities.

Varun, just to delve deeper into this lead lag between the consumption growth and the rental growth. Can one attribute it entirely to the mix that kind of changes plus the fact that you could have some malls in a ramp-up phase and therefore, there are minimum guarantees. So we don't see a good correlation between consumption growth and rental growth. And just to understand that better, let's say, you have a certain amount of consumption growth on a quarterly basis. Is it that a strong consumption growth on a mature mall would reflect in better rentals in a subsequent quarter? Like is there a 1 quarter reset? Or it's a straightforward percentage of consumption, so it's almost instant set of repricing? So that's the first question. I just want to understand because it's obviously been coming up a couple of times in terms of consumption growth ahead of rental growth and vice versa. So I just want to understand that. And then I have another 1 on the commercial piece.

Right. So I think -- thank you, Murtuza for that. And I will just take a step back to also address this question as well and bring out 1 of the points that Rashmi spoke about earlier in her opening remarks, but probably, we need to dive a bit more deeper on that aspect. I think first of all, strong consumption growth is very important in terms of getting the right set of brands to come to the mall. So there's a mix of both the experience factors that we drive through our marketing events and our fine dining destinations that we open up as well as the entertainment centers that drive this sticky footfall as well as in terms of the high trading necessity categories and the new upcoming fashion categories that 1 opens up at the mall. Now strong consumption growth gives a great platform for our leasing teams to attract the right set of new brands to take space in the mall at better rentals or improved revenue share percentages. And across our mall portfolio today, we have, in the next 3 years, over 50% of the area is going to be up for renewals and repricing. That provides a great opportunity for us to reorient some of the low trading necessity stores as well as renegotiate on rentals as well as the revenue share that we are driving and also add new experiences to the mall. So this repositioning exercise is a continuous exercise. High consumption growth actually facilitates this conversation that our leasing teams do across malls. And does that address your question to some extent?

To an extent, but I want to understand, let's assume, let's say, let's take 1 store, for instance, and it is doing INR 100 of consumption and you are taking a INR 15 rental. Let's say, in the next month, the consumption moves to INR 200. Does that simply imply that the rental would move to INR 30 from INR 15? Like is that repricing instant or there is a lead lag to that repricing?

That's -- okay. So let's correct now. So suppose our consumption is INR 100, typically, in a mall that has just started off, you will see rentals being at about INR 11 or INR 12. Now as consumption grows from, say, INR 100 to INR 200, and we typically expect consumption to double in our malls over a period of 4 to 5 years. This revenue -- this rental that we are seeing would naturally grow from INR 11 to INR 12. It grows to about INR 22 to INR 24. And with tweaks in the revenue share with higher revenue share, et cetera, coming in, we are able to drive this towards INR 27, INR 28. So the revenue share increases from an initial 11% to 12%, it goes up to 14% to 15% as we tweak and fine-tune the brand mix and the commercial agreement, the economic agreement that we have with those particular brands. So historically, if you see FY '13 to today, we have seen consumption growing at a 14% CAGR and our rentals keeping pace with that consumption growth over the last 12.5 years.

Okay. Okay. Also, a second question on the office assets. You've talked about the new assets doing 41%, but you've excluded out 2 towers in Pune, about 1 million square feet, which got the OC in December. Any sense on what is the preleasing for those drivers currently?

I think we, in fact, have a very strong pipeline for those towers as well, Murtuza. And we have a significant pipeline, which is in final closing stages, where we have agreed on the commercials and the documents are being negotiated and executed. Give us a quarter more, and we will come back to you with very strong leasing updates for the overall portfolio.

[Operator Instructions] Our next question comes from the line of Gaurav Khandelwal from JPMorgan.

I've got a couple of those. My first question is how much of the consumption strength in this quarter was due to GST cuts? And could you also give us some color on how our consumption trends different for the listed and unlisted players, which operate in your mall assets?

Thank you, Gaurav. Those are very interesting questions. I think on the GST cut, we have evaluated our brand portfolio and the impact that we have is, I would say, it's a sentimentally positive impact. But otherwise, it is not that material or needle mover in our perspective. It has -- I think the prices of goods, especially when you look at clothing, et cetera, the impact is on a 3% to 4% level, and that really is not moving the needle much per se. To your other question, I think it's better to compare, say, listed retailer performance to what they are reporting at their portfolio level. And when we have a number of large listed players with their flagship marquee stores across our portfolio. And we believe that the performance that they are seeing in our stores versus the overall portfolio performance that they are reporting, our stores have been demonstrating very strong sustained growth over a period of last several quarters within the brand mix.

Got it. And just a housekeeping question. Your tax rate in last 2 quarters have increased to almost to 24%, 25%, which is much higher than, let's say, the preceding 8, 12 quarters. How should I think about the ongoing tax rate from here for next quarter and next year? Does it normalize closer to 25% levels?

So Kailash here. I don't think this is the right way to compare the tax rate in every quarter because there would be some adjustment item, which keep happening in every quarter. So that doesn't -- so you should always look at the 9 month or YTD numbers, which will give you better color to the tax numbers. If you see the YTD 9 months for current year, it is around 23.7% on a blended basis. Now this year somehow the 2 component, which is the hotel, which was actually having a huge accumulated losses earlier has been completely adjusted. So now that has come in to a full tax regime, which is 25%, and even the residential business, which comes to a full tax regime. Otherwise, all the rental which we recover from either commercial assets or the retail is normally having a tax in the range of around 18% to 19%. So my suggestion would be that you -- for the modeling purpose, I think 22% to 23% range will sustain in future. 25% could be in 1 of the quarter, but that is not something which will happen for the entire year.

The next question comes from the line of Girish Choudhary from Avendus Spark.

Firstly, I have a question on the -- like you mentioned on the repositioning exercise for malls like Bangalore, Pune and Chennai, right, where there's a conversion which is expected in the next 3 to 6 months. What I wanted to specifically understand is what's the repricing you have been able to achieve versus the earlier brands in the same spaces?

Sure, Girish. So in fact, let me say in Phoenix MarketCity, Bangalore, for example, we have repriced almost 35% of the overall leasable area of the mall. And if I just compare the increase in the fixed rent compared to the total rent that we were seeing previously, we expect to see a 35% to 40% increase in the area that we have optimized in Phoenix MarketCity, Bangalore. Similarly in -- similarly in Pune as well, we have optimized and refreshed almost 40% of the area. And there, the overall impact that we are seeing is about 25%.

Great. So this -- as and when the trading occupancy increases, right, which is when we'll start seeing the reflection of this repricing in our numbers?

Yes. So in fact Girish, trading occupancy started going back up in quarter 3 of this year. We had hit a low of 80% trading occupancy during quarter 1. And now Phoenix MarketCity, Bangalore and Pune are back to about 85%, 86% trading occupancy level. This should now naturally increase to about 90% by March '25. And then in June, July of 2026, we should be back at about 94%, 95% level.

So for the incremental...

I was just completing the point that from -- already, we are starting to see a significant improvement in the trading density. So Phoenix MarketCity, Bangalore has reported a 30% growth in the trading density for quarter 3. And Phoenix MarketCity, Pune and Chennai have seen a 20% and an 18% growth in the trading density.

Got it. So what I was also -- as a follow-up asking is that for the incremental 10%, which is still there, right, convergence from leased -- the trading occupancy moving up. So this 35%, for example, for a mall in Bangalore, you will start seeing those reflecting in the numbers?

Yes. I think you'll see the full impact of it in the numbers during FY '27, Girish.

Got it. Got it. Great. And the second question is that you also mentioned about a 50% renewal opportunity available in the next 3 years, right? So there, what's the repricing or MTM opportunity available?

Girish, historically, we have seen anywhere between a 20% and a 30% improvement, but that is driven not just by repricing of the existing brands, but also in terms of how we have optimized the area given to existing brands and new brands as well as the economics that we have been able to negotiate with the incoming brands. So this is what we have done historically. And as we go ahead and renew the area going forward, we'll keep you posted on how the rents are moving.

So this 50%, which is, let's say, annualized 16%, 17% per year, is over and above the normal renewal rates? I mean, norms?

No. So this 50%, I would say, Girish, is the contractual expiries that are coming up. Over and above this, we may from time to time, do targeted churns and optimizations in consultation with our brand partners. And that is in addition to what is there -- what is available to us contractually.

Thank you. Ladies and gentlemen, due to the time constraint, that was the last question for today. I would like to hand the conference over to the management for the closing comments. Thank you, and over to you, team.

Thank you so much, everyone, for joining us on today's conference call. We look forward to seeing you next quarter. Thank you.

Thank you so much. Ladies and gentlemen, on behalf of Phoenix Mills Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.