This article first appeared on GuruFocus .
Release Date: October 31, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Annuity business revenue grew 16% YoY to INR 1,055 crores in Q2 FY27, with EBITDA up 21% and PAT up 31%, driven by existing operational portfolio.
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Retail consumption grew 25% YoY to INR 4,685 crores, with double-digit growth across all malls and broad-based category performance.
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Office portfolio occupancy improved to ~79% from 70% in March 2026, with rental income up 64% YoY to INR 89 crores.
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Strong balance sheet with net debt-to-EBITDA at 1.2x, average cost of debt reduced to 7.66%, and expected credit rating upgrades.
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Robust development pipeline with projects like Rise (60% leased), Kolkata (90% leased), and Surat (50% leased) progressing well, and new cities planned for 2035-36.
Negative Points
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Consolidated revenue growth was lower due to residential revenue recognition timing, with only INR 62 crores recognized in H1 vs. a higher base last year.
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Trading occupancy at some assets like Phoenix Marketcity Mumbai and Indore declined due to strategic churn, impacting near-term consumption.
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About 5% of leasable area is under fit-outs, which had a 2-3% impact on quarterly consumption growth.
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Kolkata residential project launch delayed by over 3.5 years due to approval issues and plan changes, now expected in 2 quarters.
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New large assets like Thane, Coimbatore, and Chandigarh are only expected to be operational by calendar year 2030, limiting near-term growth from new additions.
Q & A Highlights
Q: With consumption growth running at 25% in Q2, what is the outlook for October and the festive season, and how should we think about the consumption-to-rental elasticity? A: Varun Parwal, Investor Relations, said October 2026 is not directly comparable to October 2025 because Diwali fell in October last year; on a normalized basis, growth is expected at 20% to the higher end of 25%. He noted rent and consumption do not move in lockstep quarter-on-quarter but converge over a 5-year period, and the rent-to-consumption ratio has improved to 13% from a low of 12% in Q4, normalizing toward the long-term average of 13.5% to 14%.
Q: Can you quantify how much of the 25% consumption growth came from higher trading occupancy versus trading density, and what is the FY '27 rental growth guidance? A: Varun Parwal, Investor Relations, said trading occupancy rose only about 3 percentage points year-on-year, so no more than 3% of the 25% growth is attributable to occupancy, with the rest from natural growth; roughly 5% of leasable area is under fit-out, which trimmed 2% to 3% from reported consumption growth. On guidance, he said the 15% rental growth target given in April should now be 1 to 2 percentage points higher given H1 performance, and he is optimistic the company will cross 15% for FY '27.
Q: What is the pre-leasing status and expected rental profile of the projects opening in CY '27, including Rise at Lower Parel, Kolkata and Surat? A: Rashmi Sen, CEO - Malls and Whole Time Director, said Kolkata is about 90% leased, Surat 50%, the Bangalore expansion about 70%, and the Rise 1 expansion at Palladium 60% leased. Rise 1 will add about 150 stores, roughly 50% of them new brands, with rentals expected above 500 PsPM, higher than the existing Palladium complex rent. Kolkata fit-outs start around Q2 with launch about six months later; Surat completes in '27 and opens in '28.
Q: What are the key drivers behind Mall of Asia's strong performance, and what is the outlook for the asset? A: Rashmi Sen, CEO - Malls and Whole Time Director, said Mall of Asia has become one of the largest malls by consumption in the portfolio, supported by marquee brands and a strong catchment, with significant headroom to grow. Varun Parwal, Investor Relations, added that performance is not expected to peak in FY '27, with healthy double-digit growth expected in FY '28, and lease expiries and renewals in FY '28 will allow rental repricing and re-optimization.
Q: What is the status of the office portfolio in terms of leasing and rent-generating occupancy? A: Varun Parwal, Investor Relations, said the office portfolio is 79% leased and 54% rent-generating, with a target of 70% rent-generating occupancy by March and 80% by June-July next year. Office income grew 64% year-on-year to INR 89 crores in Q2, with EBITDA up similarly to INR 56 crores, as tenants complete fit-outs and commence operations.
Q: What is the timeline for the Thane, Coimbatore and Chandigarh malls, and which other assets are scheduled to come on stream? A: Varun Parwal, Investor Relations, said Thane, Chandigarh and Coimbatore are targeted for operations in calendar year 2030, allowing elbow room for regulatory approvals and retailer fit-outs. Kailash Gupta, CFO, said Kolkata and Surat malls plus the Lower Parel and Bangalore expansions of about 1 lakh to 1.5 lakh square feet are scheduled for FY '28-'29, with the Kolkata residential launch also expected in that period.
Q: What is the update on the ISML acquisition from CPP Investments? A: Kailash Gupta, CFO, said Tranche 1 completed in November 2025, raising PML's stake in ISML from 51% to 58.33%. In October 2026, NCLT approved the selective capital reduction scheme forming part of Tranche 2, expected to complete in November 2026, lifting the stake to 68.1% at a capital reduction consideration of INR 1,350 crores.
Q: What drove the gap between consolidated revenue growth and annuity business growth in Q2, and what is the CapEx breakdown for H1? A: Kailash Gupta, CFO, said consolidated revenue was INR 1,153 crores with EBITDA of INR 710 crores at a 62% margin, and PAT after minority interest of INR 326 crores; consolidated growth was lower because residential revenue is recognized on unit handover, with only INR 62 crores booked in H1 versus a higher base last year, though INR 120 crores of sold units will be booked in H2. Varun Parwal added that H1 CapEx of about INR 1,440 crores comprised roughly INR 800 crores for land and FSI, including the ~INR 700 crore Chandigarh land payment, and about INR 700 crores for construction.
Q: Why has the Kolkata residential project been delayed, and what is the deal pipeline for new land acquisitions? A: Kailash Gupta, CFO, said the original plan was for a different development before switching to pure residential, and approvals took longer than expected due to elections and other factors; the launch is expected in about two quarters. Varun Parwal, Investor Relations, said the deal pipeline is very strong, with one marquee land parcel at a very advanced stage for which an advance has already been paid, but details will be announced only after approvals and documentation.
Q: Does the 10-city new location pipeline change the annual mall area addition guidance, and what is the 2030 target? A: Varun Parwal, Investor Relations, said the old benchmark of adding about 1 million square feet of retail a year is now 1.3 to 1.4 million square feet, with Palladium and Phoenix Marketcity Bangalore targeted to double to about 2 million square feet each and Thane and Chandigarh pushed to 1.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
