Phoenix Mills Limited annuity growth outpaces consolidated growth

Phoenix Mills Limited (PML) said its annuity businesses generated Rs 2,089 crore of revenue and Rs 1,318 crore of earnings before interest, tax, depreciation and amortisation (EBITDA) in the first half of financial year 2027 (H1 FY27), up 16% and 20%. Consolidated revenue rose 8% to Rs 2,228 crore as residential and other revenue fell 49% to Rs 139 crore.

Why did PML's consolidated revenue lag annuity growth?

PML's consolidated revenue grew more slowly because residential and other income contracted while annuity revenue increased. Revenue from retail, offices, hotel and asset management increased by Rs 295 crore to Rs 2,089 crore in H1 FY27, while residential and other revenue declined by Rs 135 crore to Rs 139 crore from Rs 274 crore in H1 FY26.

The revenue composition consequently shifted in the half year. Annuity businesses represented about 94% of consolidated revenue in H1 FY27, calculated as Rs 2,089 crore out of Rs 2,228 crore, compared with about 87% a year earlier, when they generated Rs 1,794 crore out of Rs 2,068 crore.

The same divergence was visible in the second quarter (Q2) of FY27. Annuity revenue rose 16% to Rs 1,055 crore from Rs 914 crore in Q2 FY26, but residential and other revenue declined 52% to Rs 98 crore from Rs 202 crore. Consolidated quarterly revenue therefore increased 3% to Rs 1,153 crore, below the annuity businesses' growth rate.

How did PML's EBITDA mix change in H1 FY27?

PML's annuity EBITDA increased faster than consolidated EBITDA because residential and other EBITDA fell 75% in H1 FY27. EBITDA from retail, offices, hotel and asset management rose by Rs 223 crore to Rs 1,318 crore, while residential and other EBITDA decreased by Rs 102 crore to Rs 34 crore.

The annuity businesses supplied about 98% of consolidated EBITDA in H1 FY27, based on Rs 1,318 crore of annuity EBITDA against Rs 1,352 crore of consolidated EBITDA. In H1 FY26, their calculated contribution was about 89%, with Rs 1,095 crore of annuity EBITDA within Rs 1,231 crore of consolidated EBITDA.

This composition explains the difference in growth rates. Consolidated EBITDA rose 10% to Rs 1,352 crore in H1 FY27, while annuity EBITDA rose 20%; the lower residential and other contribution offset part of the Rs 223 crore annuity increase. The consolidated operating EBITDA margin increased by 1 percentage point to 61% from 60%.

In Q2 FY27, annuity EBITDA increased 21% to Rs 669 crore from Rs 552 crore, while residential and other EBITDA declined 64% to Rs 41 crore from Rs 115 crore. Consolidated quarterly EBITDA consequently rose 7% to Rs 710 crore, and the operating EBITDA margin increased by 2 percentage points to 62%.

What happened to PML's profit after tax by business type?

PML's annuity profit after tax (PAT) rose 31% in H1 FY27, while residential and other PAT declined 75%. Annuity PAT reached Rs 793 crore from Rs 605 crore in H1 FY26, whereas residential and other PAT fell to Rs 25 crore from Rs 98 crore.

Consolidated PAT increased 16% to Rs 818 crore in H1 FY27 from Rs 703 crore. The annuity businesses accounted for about 97% of that total, with Rs 793 crore of PAT, compared with about 86% in H1 FY26, when they generated Rs 605 crore of Rs 703 crore.

The quarterly comparison showed the same pattern. Q2 FY27 annuity PAT rose 31% to Rs 391 crore from Rs 298 crore, while residential and other PAT declined 62% to Rs 33 crore from Rs 85 crore. Consolidated Q2 PAT increased 11% to Rs 424 crore from Rs 383 crore.

PML also reported net profit after tax, after share of associates and minority interest, of Rs 623 crore for H1 FY27, up 14% from Rs 545 crore. Diluted earnings per share (EPS) increased 14% to Rs 17.40 from Rs 15.23, alongside the 16% increase in consolidated PAT in the business breakup.

Did PML's operating free cash flow show the same shift?

PML's operating free cash flow showed a similar tilt towards retail, offices and hotels, which contributed Rs 1,137 crore in H1 FY27. That contribution rose 30% from Rs 872 crore in H1 FY26, while the residential contribution declined 38% to Rs 78 crore from Rs 126 crore.

Net cash from operating activities increased 19% to Rs 1,367 crore in H1 FY27 from Rs 1,148 crore. After net interest paid of Rs 151 crore, compared with Rs 149 crore a year earlier, operating free cash flow increased 22% to Rs 1,215 crore from Rs 998 crore.

The Q2 cash-flow figures also favoured the retail, office and hotel operations. They contributed Rs 570 crore of operating free cash flow, up 28% from Rs 446 crore, while residential contributed Rs 60 crore, down 13% from Rs 69 crore. Total quarterly operating free cash flow increased 22% to Rs 631 crore after Rs 80 crore of net interest paid.

PML defines operating free cash flow as net cash flow from operating activities after taxes, adjusted for interest paid or received. In H1 FY27, the Rs 1,137 crore contribution from retail, offices and hotels was more than 14 times the Rs 78 crore residential contribution, compared with roughly seven times in H1 FY26.

Conclusion

PML's H1 FY27 results became more dependent on its annuity businesses: their calculated share of consolidated revenue increased to about 94% from about 87%, while their share of consolidated EBITDA rose to about 98% from about 89%. The fall in residential and other contributions limited the pace of reported consolidated growth despite higher annuity revenue, EBITDA and PAT.

The presentation does not state a forward revenue or EBITDA target for either business type. Subsequent results will show whether residential and other revenue, at Rs 139 crore in H1 FY27, remains a smaller contributor and whether retail, offices and hotels sustain their Rs 1,137 crore operating-free-cash-flow contribution.