The Phoenix Mills FY26: Strong Cash Flows, Retail Momentum, and a Bigger Office Platform

The Phoenix Mills ended FY26 with a strong operating year and a clear message from management: growth came without adding new retail capacity. Consolidated revenue rose to INR 4,423 crore, up 16 percent year on year, while consolidated EBITDA increased to INR 2,637 crore, up 22 percent. The EBITDA margin expanded to 60 percent in FY26 from 57 percent in FY25.

Net profit after tax, after share of associates and minority interest, increased to INR 1,224 crore, up 24 percent. Cash generation also remained healthy. Operating free cash flow was reported at INR 2,140 crore as of March 31, 2026, up 23 percent year on year.

These numbers reflect a portfolio that is still primarily retail-led, but with growing contributions from offices and steady performance from hospitality. The company also used FY26 as a transition year to invest into its next growth phase, while keeping leverage contained.

Retail: Consumption scaled faster than rentals, but the runway is visible

Retail remains the core engine. FY26 consumption across the portfolio reached INR 16,587 crore, up 21 percent, while Q4 FY26 consumption was INR 4,261 crore, up 31 percent year on year.

Retail rental income grew to INR 2,157 crore in FY26, up 10 percent, and retail EBITDA increased to INR 2,246 crore, up 12 percent. The slower growth in rentals versus consumption was addressed directly in the earnings call. Management attributed the lag to the company’s lease structure, which is the higher of minimum guarantee or revenue share, and to the category mix where jewellery and electronics can drive high sales but carry structurally lower revenue share ratios.

The company also pointed to a practical driver of near-term rental upside: leased occupancy in key malls is largely in the 95 to 99 percent range, while trading occupancy is still catching up in several repositioned assets. Management expects trading occupancy in Phoenix MarketCity Pune and Phoenix MarketCity Bangalore to improve meaningfully in the near term, supported by store openings including Uniqlo.

Offices: Scale has doubled, and occupancy ramp-up is the next catalyst

The office platform has expanded quickly. Leasable area increased from about 2.0 million sq ft in Mar-24 to 4.8 million sq ft in Mar-26, following three major completions during 2025.

During FY26, gross leasing was about 2.2 million sq ft, and the overall portfolio reached about 70 percent occupancy as of March 2026. Operational assets reported occupancy of 83 percent, while the 2025-completed assets reached 62 percent leased from a low base.

Income from operational offices in Mumbai and Pune was INR 213 crore in FY26, up 6 percent, and EBITDA was INR 141 crore, up 7 percent. Management highlighted the typical lag between leasing and revenue recognition in offices and stated expectations of occupancy progressing towards 90 percent over the next few quarters, implying an earnings ramp from FY27 onwards.

Hotels and residential: Resilience in Mumbai, pressure in Agra, cash flows from Bengaluru

Hospitality performance was mixed but resilient at the portfolio level. FY26 hotel income grew to INR 596 crore, up 8 percent, while hotel EBITDA rose to INR 276 crore, up 14 percent.

The St. Regis Mumbai delivered FY26 income of INR 540 crore, up 9 percent, and EBITDA of about INR 262 crore, up 17 percent, with a 49 percent margin. Courtyard by Marriott Agra, however, reported FY26 income of INR 56 crore, down 2 percent, and EBITDA of about INR 14 crore, down 22 percent.

Residential continued to function as a cash-generating vertical. FY26 gross sales were INR 471 crore and collections were INR 467 crore. Revenue recognized was INR 489 crore. Management described the segment as selective and focused on monetising ready inventory, primarily in Bengaluru, with average sales price around INR 28,000 to 29,000 per sq ft.

Financial summary and balance sheet

The company reported liquidity of INR 2,004 crore as of March 2026, gross debt of INR 5,164 crore, and net debt of INR 3,160 crore. It also highlighted a reduced cost of debt, with average cost of debt at 7.51 percent in March 2026.

Capital allocation: ISMDPL buyout and a visible project pipeline

The most material strategic transaction is the structured buyout of CPP Investments’ 49 percent stake in ISMDPL, with total consideration of about INR 5,449 crore to be paid over 36 months in four tranches. Tranche 1 of INR 1,257 crore was paid in Nov-25, taking PML stake in ISMDPL to 58.33 percent after tranche 1.

Management described the acquisition as intended to enhance control and earnings visibility and stated funding would be substantially from surplus cash, internal accruals, and incremental debt at ISMDPL.

On development, the company highlighted progress across several cities. Thane, Coimbatore, and Chandigarh have moved from approvals to execution, with excavation either commencing or expected to commence shortly. Under-construction retail assets in Kolkata and Surat were discussed on the call, with management expecting them to launch in the second half of FY28.

Takeaways

FY26 reinforced Phoenix’s positioning as a retail-led mixed-use platform with strong cash generation. Consumption growth is running ahead of rental growth, but management sees catalysts in trading occupancy catch-up, lease resets, and continued churn-led repositioning.

The office platform has scaled rapidly and is now entering the phase where leasing should translate into higher reported income. With leverage maintained at low levels and operating free cash flow expanding, the next phase of growth will depend on execution across occupancy ramp-ups, development timelines, and the multi-tranche ISMDPL buyout structure.