Phoenix Mills offers a cheaper retail proxy. Real estate is the risk

rental income.Phoenix’s multiple business lines often move in different directions, making consolidated Ebitda less useful as a yardstick, particularly because accounting for real estate construction differs from that for retail and hotels. Investors may instead want to focus on the segment that drives the bulk of the company’s sum-of-the-parts valuation: retail leasing.According to Motilal Oswal Financial Services estimates, the retail leasing segment could post an Ebitda of about ₹2,900 crore in FY26, compared with roughly ₹400 crore from the hotel business.

With Phoenix’s market capitalization at around ₹60,000 crore and net debt likely near ₹5,000 crore, the enterprise value works out to about ₹65,000 crore. After subtracting an estimated ₹13,000 crore in valuation for the construction and hotel businesses, the retail leasing arm is valued at about ₹52,000 crore, implying an EV/Ebitda multiple of 18x.That doesn't appear demanding when compared with listed retailers such as Trent Ltd and Avenue Supermarts Ltd, which trade at 40x and 55x Ebitda multiples.For some investors, Phoenix could well be a case of retail proxy play at a cheaper valuation.

While the risks from a slowdown in retail consumption apply to all retail companies, the other specific risks for Phoenix’s investors could be aggressive deployment of rental leasing cashflows into real estate construction and hotels business that may not deliver comparable returns.Manish Joshi is a chartered accountant (passed in first attempt) with experience of capital markets spanning equities, derivatives, investment banking and private equity in various roles ranging from analyst to fund manager/trader. Previously, he worked with BNP Paribas, Karvy Stock Broking and The