Pheonix Mills Valuation Excel Model and Intrinsic Value of Shares

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Pheonix Mills Valuation : About the Company

Phoenix Mills was originally started in 1905 to manufacture cotton textiles in Bombay. The company, which has been listed on the Bombay Stock Exchange since 1959, is owned by the Ruia family. High Street Phoenix, formerly known as Phoenix Mall, is one of the largest shopping malls in India, situated in Lower Parel, Mumbai. Its gross floor area is 3,300,000 square feet (310,000 m2). In addition to the mall, the compound hosts a five-star hotel, a multiplex, commercial space and a residential tower. The mall consists of SkyZone and Grand Galleria. South Asia’s largest 20 lane bowling concourse was first started here in the year 1996. India’s first Hypermarket concept Big Bazaar was introduced in 2001 at High Street Phoenix. From here, we go ahead with Pheonix Mills Valuation and Intrinsic Value of its shares.

Methodology Used:

Discounted cash flow (DCF) is a valuation method used to estimate the value of an investment based on its expected future cash flows. DCF analysis attempts to figure out the value of an investment today, based on projections of how much money it will generate in the future. The following step by step procedure is followed.

  1. Determining the Revenue Growth Rates
  2. Forecasting the Financial Statements
  3. Deriving the FCFF and FCFE
  4. Calculating the Terminal Value
  5. Calculating the Discount Rate
  6. Discounting the Cashflows
  7. Arriving at the Intrinsic Value of the Shares

You can also get the formula based DCF Excel Model from below:

Step 1: Determining the Revenue Growth Rates

We arrive at the below table by using the past and expected future performance of both the company and the economy. This along with adjustments to changes in the management expectations, extraordinary events and other macro factors give the revenue growth rates for Pheonix Mills Valuation.

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Financial Year Revenue Growth Rate
Year 1 2%
Year 2 -42%
Year 3 72%
Year 4 21%
Year 5 16%
Revenue Growth Rates: Pheonix Mills Valuation

Step 2: Forecasting the Financial Statements

The financial statements are forecasted for a period of 5 years using the annual report data of the company. The assumptions used for forecasting are tabulated below. The Excel model is completely editable and can be adjusted for specific changes which may happen over a period of time.

Financial Statements Forecast : Pheonix Mills Valuation
Financial Statements Forecast : Pheonix Mills Valuation

Step 3: Deriving the FCFF and FCFE

Free cash flow to the firm (FCFF) represents the amount of cash flow from operations available for distribution after accounting for depreciation expenses, taxes, working capital, and investments. FCFF is a measurement of a company’s profitability after all expenses and reinvestments. It is given as follows.

Free cash flow to equity (FCFE) is a measure of how much cash is available to the equity shareholders of a company after all expenses, reinvestment, and debt are paid. FCFE is a measure of equity capital usage.

F/S Items (INR Millions) Mar-20 Mar-21 Mar-22 Mar-23 Mar-24
Free Cash Flow to Firm 3545 -838 -310 3287 4186
Free Cash Flow to Equity -15742 -34930 22945 9592 7457
FCFF and FCFE values: Pheonix Mills Valuation

Step 4: Calculating the Terminal Value

Terminal value (TV) is the value of a business or project beyond the forecast period when future cash flows can be estimated. It assumes that a business will grow at a set growth rate forever after the forecast period. Terminal value often comprises a large percentage of the total assessed value.

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Terminal Value Calculation Units INR Millions
Free Cash Flow to Firm 4186.46
Growth Rate 5.00%
Cost of Capital 9.97%
Terminal Value 88499.11
Terminal Value: Pheonix Mills Valuation

Step 5: Calculating the Discount Rate

DCF analysis helps assess the viability of a project or investment by calculating the present value of expected future cash flows using a discount rate. Here we use the Weighted average cost of capital (WACC) to discount the cash flow. The below table from the excel model shows the calculation of WACC for Pheonix Mills Valuation.

WACC Calculation for Pheonix Mills Valuation.
WACC Calculation for Pheonix Mills Valuation.

Step 6: Discounting the Cashflows

The WACC and the Cost of Equity for the company calculated in the above step are then used to discount the FCFF, FCFE and Terminal Value calculated in Step 3 and 4. In our case, we’ll only consider the FCFF based Intrinsic price of the shares as it represents the cash flow to all the suppliers of capital and not only to the equity shareholders. Thus we arrive at Present value of future FCFF for Pheonix Mills Valuation. (Units are INR Millions)

PV of FCFF and FCFE  for Pheonix Mills Valuation.
PV of FCFF and FCFE for Pheonix Mills Valuation.

Step 7: Arriving at the Intrinsic Value of the Shares

Dividing the PV of the FCFE and Terminal Value (the Value of the entire firm) by the number of outstanding shares we get the per share intrinsic value. We can compare this price with the current market price of the stock to get the Discount or Premium to its intrinsic price.

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Ashok Valuation Units
PV in INR Million 33201
No of Shares Outstanding (In Million) 153
Intrinsic Value 217.00
Current Market Price of Share 745.00
Current Discount/Premium 243%
Intrinsic Value of the Shares: Pheonix Mills Valuation

Pheonix Mills Valuation and Intrinsic Share Price = INR 217.00

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References: Investopedia
Our 150+ Stock Valuations
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(Note: All the research done by me is only for educational purposes and should not be seen as Investment recommendations. I am a Research analyst and not a SEBI registered Investment Advisor. My research completely reflects my personal opinions and not of my employers. Kindly do your own due diligence before Investing)



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