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Edited Transcript of PHOE.NS earnings conference call or presentation 30-Jul-20 6:30am GMT

·Lesedauer: 48 Min.

Q1 2021 Phoenix Mills Ltd Earnings Call Aug 2, 2020 (Thomson StreetEvents) -- Edited Transcript of Phoenix Mills Ltd earnings conference call or presentation Thursday, July 30, 2020 at 6:30:00am GMT TEXT version of Transcript ================================================================================ Corporate Participants ================================================================================ * Pradumna Kanodia The Phoenix Mills Limited - Group CFO, Head of Finance & Accounts, Director of Finance and Executive Director * Shishir Ashok Shrivastava The Phoenix Mills Limited - MD & Executive Director ================================================================================ Conference Call Participants ================================================================================ * Abhinav Sinha Jefferies LLC, Research Division - Equity Analyst * Abhinav Bhandari * Abhishek Bhandari Macquarie Research - Analyst * Amandeep Singh Grover AMBIT Capital Private Limited, Research Division - Research Analyst * Atul Mehra * Biplab Debbarma Antique Stockbroking Ltd., Research Division - VP * Dushyant Mishra * Kunal Lakhan CLSA Limited, Research Division - Research Analyst * Mohit Agrawal IIFL Research - Assistant VP * Prem Khurana Anand Rathi Financial Services Limited, Research Division - Research Analyst * Pulkit Patni Goldman Sachs Group, Inc., Research Division - Equity Analyst * Puneet J. Gulati HSBC, Research Division - Analyst * Swagato Sourya Ghosh Franklin Templeton Asset Management (India) Private Limited, Research Division ================================================================================ Presentation -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [1] -------------------------------------------------------------------------------- Very good afternoon, ladies and gentlemen. And I hope that you are all keeping well. We take pleasure in welcoming you all to discuss the operating and financial performance of the company for the first quarter of FY '21. We are extremely pleased to share with you that our malls in Mumbai and Pune will now recommence operations from August 5, 2020, as per the directive of the state government. We assure you of the implementation of the highest standards of safety and look forward to welcoming you all back into our malls. We commenced operations across Phoenix MarketCity, Bangalore; Phoenix United, Lucknow; and Phoenix United, Bareilly on the 8th of June as per the guidelines of the respective state government. Currently, these malls are operating at an occupancy of close to 90% of the permissible operational area with some activities, which are not permitted at each of these locations. At Phoenix MarketCity, Bangalore, the average daily consumption has witnessed sustained improvement since reopening and has reached about approximately 47% of the average daily consumption of July 2019 for the permissible activities. And this was reached in the week of July 22 through 26. The consumption trend has been consistently going up since reopening. Further, the average spend per footfall has also increased over 3x to approximately INR 2,670 in the week of July 22 through 26th. And this is higher than -- much higher than the average daily spend of July 2019 by over 3x. We have also launched new digital initiatives, including home delivery and curbside pickup as of last week, where customers can now message with -- message us on WhatsApp, select merchandise from an online catalog or through assisted virtual shopping from the comforts of their home, pay online for their orders and choose either home delivery or curbside pickup from the mall. The response from the customers to this initiative has been extremely encouraging, and we look forward to sales ramping up on account of the same. We are also extremely happy to share that we launched our latest retail mall asset, Phoenix Palassio in Lucknow on the 8th of July. This was a brownfield acquisition, and we took possession of this asset in August 2018 and completed the construction, and it was actually ready to commence operations in less than 21 months in March 2020. However, in light of the ongoing crisis, we had decided to defer the opening of the mall and the same commenced operations on 8th of July. The mall is spread across approximately 950,000 square feet of the total leasable area and will be a key district consumption hub for us in the region going forward. We take this opportunity to thank all our retail partners for their support in completing their fit-outs and being ready to commence operations in this current environment. It possibly makes Phoenix Palassio, Lucknow, the only new mall to open up in India and possibly across the world during this pandemic. Our commercial office portfolio has seen -- has been a steady performer despite the outbreak of COVID-19. Art Guild House in Mumbai has a leased occupancy of approximately 87% as of June 2020. Fountainhead Tower I in Pune has a leased occupancy of approximately 95% and is fully operational. Construction work at Fountainhead Tower II is complete, and we are witnessing strong interest from potential lessees. Work at Fountainhead Tower III is on course, and we anticipate to complete work in the next 3 to 4 months. Speaking about our projects under development, in the retail segment, work across our new malls, Millennium -- Phoenix Millennium in Pune; Mall of Asia, Bangalore; Phoenix Citadel at Indore; and Palladium, Ahmedabad is back on track. We remain extremely positive on the long-term prospects of retail consumption in India and are extremely confident of strengthening our leadership position once normalcy returns. We are well on course to double our retail portfolio and significantly increase our commercial portfolio by financial year 2024. With this, I would like to hand over the call to Mr. Kanodia, our Group Director of Finance, who would brief us on our financial performance. -------------------------------------------------------------------------------- Pradumna Kanodia, The Phoenix Mills Limited - Group CFO, Head of Finance & Accounts, Director of Finance and Executive Director [2] -------------------------------------------------------------------------------- Good afternoon, friends. Ladies and gentlemen, thank you for joining us on this call. Continuing with the briefing, which Mr. Shishir just gave, I would like to share with you some of the key financial highlights of our performance for the quarter ended June. The focus, of course, was on cash flows and conserving our resources because malls, except for Lucknow, Bareilly and Bangalore were largely shut during this period. To give you a better sense of the cash flow during this period, the collections from the retail malls across the group was approximately INR 400 million. From our office commercial portfolio, the collection during this period was INR 330 million, while the hotels contributed around INR 118 million during the same period. Our residential portfolio also contributed INR 100 million for the quarter ended June. And to add to this, we have received income tax refunds across our various SPVs to the tune of INR 400 million during the same quarter. Our cumulative CapEx spend was approximately INR 664 million for this quarter, largely on the 3 ongoing projects, namely Pune, Ahmedabad, Indore and also some expenditure on Destiny at the Lucknow mall, which became operational. Payments towards statutory dues, including GST, which covered the period for March till May was approximately INR 460 million. And other operational expenses across all our assets, including malls, commercial office, retail, residential, was around INR 850 million. As informed to you earlier, we have carried out various cost rationalization efforts across our business verticals, which will ensure that we can bounce back strongly once the business environment normalizes in the near future. To summarize the cash flow, we had a total inflow of approximately INR 1,350 million during the quarter, while our expenses were around INR 2,000 million. So this resulted in a cash burn of approximately INR 650 million for the quarter ended June. Despite a challenging business environment, we continue to maintain a robust balance sheet. Our consolidated debt and cash stood at INR 47,489 million and INR 7,500 million, respectively, as on June 2020. We continue to remain prudent in our expenditures and continue to engage with various stakeholders to ensure sufficient cash flows across the group. Thank you very much for these opening comments, and we would be happy to take any specific questions now. Thank you. ================================================================================ Questions and Answers -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- (Operator Instructions) The first question is from the line of Kunal Lakhani (sic) [Lakhan] from CLSA. -------------------------------------------------------------------------------- Kunal Lakhan, CLSA Limited, Research Division - Research Analyst [2] -------------------------------------------------------------------------------- So basically, the rental income that we have booked in P&L is about 32% of the run rate of same quarter last year. Now this is based on accrual accounting, as I understand. So I just want to understand what is the status and visibility on the actual collection of these rents? I understand we collected about INR 40 crores in this quarter. Would this also include some of the historical collections? Or this includes only the collections for this quarter? -------------------------------------------------------------------------------- Pradumna Kanodia, The Phoenix Mills Limited - Group CFO, Head of Finance & Accounts, Director of Finance and Executive Director [3] -------------------------------------------------------------------------------- Yes. So you're right in your assessment that the accrual system of accounting has been followed and all this income that has been booked is based on our concluded or ongoing negotiations with the retailers. And accordingly, the income has been booked. Our collections, which you referred to around INR 40 crores during the period, comprises of -- because it is period, April, May and June, so some of the collections during April were pertaining to Feb and March, but largely they are pertaining to this period of April, May and June. And we continue to see robust collections in July as well. And as -- during this month, we have seen significant cash flow coming in as well. -------------------------------------------------------------------------------- Kunal Lakhan, CLSA Limited, Research Division - Research Analyst [4] -------------------------------------------------------------------------------- Okay. So just -- is it fair to assume that the INR 84 crores of rental income that we have booked in Q1, we should be able to collect by Q2 or worst by Q3? -------------------------------------------------------------------------------- Pradumna Kanodia, The Phoenix Mills Limited - Group CFO, Head of Finance & Accounts, Director of Finance and Executive Director [5] -------------------------------------------------------------------------------- So we had also indicated in our last call that there was a deferment that we had offered to our retail partners, so that they could take some time to start paying us the amount that were due during the lockdown period. We now hope that as the malls start operations, Bombay, Pune will commence operations very soon within a week's time. And of course, Lucknow, Bareilly and Bangalore have already commenced. So for the period under the operating period, we hope to collect the funds in the same months or in the same period. While for the previous period, which is under lock down, the payments will be a little more staggered and come over a period of time. So it may not be apple-to-apple, but yes, we are hoping that our deals, which we have concluded with our retail partners, would enable us to recover this money in due course of time. And since this deferment is an advantage, which we have passed on to our partners, they will make sure that these payments get paid out over a period of time. -------------------------------------------------------------------------------- Kunal Lakhan, CLSA Limited, Research Division - Research Analyst [6] -------------------------------------------------------------------------------- Sure. That's helpful. My second question is on the malls in Maharashtra. Like you said is the expected (inaudible) Can you give some color on the rent negotiation status on these malls since they've been shut for a longer period? Also since they have been shut for a longer period, would a waiver there be more than 50% that we had offered for Bangalore retailers and (inaudible) cash flow support over there? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [7] -------------------------------------------------------------------------------- Kunal. So just to clarify that we have concluded our discussions with the bulk of our retailer partners across all malls across the group. So it's not -- these negotiations were not limited to only Bangalore and Lucknow Mall, which became -- and Bareilly, which became operational on June 8. The understanding has generally been that for the period of lockdown, on a brand-to-brand negotiation or group-to-group negotiation, we have given a waiver of fixed rental to a certain percentage for the period of lockdown. This would roughly translate, I would say, to about anywhere between 45% to 50% waiver -- 55% waiver for this period of lockdown in each mall. Having said that, we have not concluded the negotiation with certain brands who have not been permitted to commence operations on account of the government notification because we -- the brands and us we felt it would be better to get into that negotiation once there was visibility of their activities being permitted and once they could start trading. So we have taken into account that for the purpose of Q1, we have considered for the moment, just to give -- be absolutely transparent, we have considered negligible to no income coming from these activities. And therefore, our rental estimate for this quarter has shrunk, but we hope that as our negotiations conclude, we will be able to get more than this approximate 30% that we have considered of fixed rental for the first quarter. Moving on, once the malls become operational, the extent of discount reduces, but we have, on the other side, have also agreed on a higher percentage of revenue share with several of the brands. And as consumption ramps up, we expect this recovery to increase significantly, rather the rental income to increase significantly. And so looking at our -- our estimate would be that Q2 would certainly show a much higher revenue coming than Q1. -------------------------------------------------------------------------------- Kunal Lakhan, CLSA Limited, Research Division - Research Analyst [8] -------------------------------------------------------------------------------- Right, right. And my last question is on the cash flow side. The cash burn of INR 65 crores, would that be the peak cash burn for this year considering there was a refund -- IT refund component of about INR 40 crores which should not be there in the second quarter or subsequent quarters -- would you still assume that INR 65 crores be the peak cash burn in this year? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [9] -------------------------------------------------------------------------------- I would say that, yes, for the quarter, we -- since our income is going to be going up with the Mumbai and Pune malls also operating, we would -- and our operating expenses have been -- we've been very, very prudent on reducing those, we would not expect -- we don't see any reason why our cash burn would go beyond this number. -------------------------------------------------------------------------------- Operator [10] -------------------------------------------------------------------------------- The next question is from the line of Puneet Gulati from HSBC. -------------------------------------------------------------------------------- Puneet J. Gulati, HSBC, Research Division - Analyst [11] -------------------------------------------------------------------------------- If you can -- I missed out the breakup of the INR 200 crores of total expenses, INR 46 crores, you said, was statutory dues, INR 85 crores was others, and what was the balance? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [12] -------------------------------------------------------------------------------- CapEx. -------------------------------------------------------------------------------- Puneet J. Gulati, HSBC, Research Division - Analyst [13] -------------------------------------------------------------------------------- Okay. That was CapEx. Okay. So on CapEx, what is the plan? Or what are your thoughts on how you would spend for the balance of the year? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [14] -------------------------------------------------------------------------------- So CapEx is -- largely, we have 4 projects that are currently underway. We have Phoenix Millennium in Pune, Mall of Asia in Bangalore, Phoenix Citadel in Indore and Palladium, Ahmedabad. Between these -- and of course, we have Fountainhead Tower II, et cetera, Tower II and some -- there may be some payments to be done against Tower I as well -- Tower III as well. So cumulatively, we expect our CapEx not to exceed INR 300 crores to INR 320 crores, somewhere in that range. But it could get impacted and be reduced in the event the contractors who are working at these sites are unable to ramp up their manpower. So on the outer side, it could be that number. But it could be less than that as well if (inaudible) are not as fast as we expected. -------------------------------------------------------------------------------- Puneet J. Gulati, HSBC, Research Division - Analyst [15] -------------------------------------------------------------------------------- Okay. Now on your discussions with the retailers, have you seen any instances where retailers have walked out and have said that they will shut their shops in any of the malls? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [16] -------------------------------------------------------------------------------- No. We've not really -- see, let me clarify that with the -- we've not seen any such issue in -- with the large groups and brands that we have across malls. There may be a few smaller single-store outlets, which are localized to each city, which may not be able to survive this crisis. And this could be mostly in, let's say, F&B and food court. So across the malls, there may be about 10, 12 at each location, 10 to 12 stores that may not be able to open. But there's not really been any termination as such. About 1% -- one could assume a 1% of the total GLA getting impacted by certain retailers who are not able to continue with their operation on account of their financial crisis. -------------------------------------------------------------------------------- Puneet J. Gulati, HSBC, Research Division - Analyst [17] -------------------------------------------------------------------------------- Okay. 1% is still a small number. Okay. Secondly, on your retailer, you were expected to receive some rent by July as well. Have they largely paid? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [18] -------------------------------------------------------------------------------- We have received roughly -- in July, so far, we've received about INR 20-odd crore of collections from retailer rents. -------------------------------------------------------------------------------- Puneet J. Gulati, HSBC, Research Division - Analyst [19] -------------------------------------------------------------------------------- Okay, okay. And this is what percentage of the commitments the retailers would have made to you? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [20] -------------------------------------------------------------------------------- I think we will deep dive on this off-line, Puneet, and explain the numbers better. -------------------------------------------------------------------------------- Operator [21] -------------------------------------------------------------------------------- The next question is from the line of Pulkit Patni from Goldman Sachs. -------------------------------------------------------------------------------- Pulkit Patni, Goldman Sachs Group, Inc., Research Division - Equity Analyst [22] -------------------------------------------------------------------------------- 2 questions. Firstly, when I look at the equity invested till June 2020 on Slide #23, just wanted to get a sense, has the equity commitment on these projects changed in the last few months? Or is it the same number that you had expected to spend on these projects? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [23] -------------------------------------------------------------------------------- Yes. In fact, no, there has been no change in our equity commitment towards these projects. We continue to have -- in PMC Wakad, Hebbal and Indore, we continue to have cash that remains to be deployed as what we had earmarked out of equity there. And Palladium, Ahmedabad as well. We've just commenced drawing down debt -- drawing down the construction finance on Palladium, Ahmedabad. In May, we did the first drawdown. It's at an average cost of about 8.6%. In the other 3 projects, which are at Pune, Hebbal, Bangalore and Indore, we have not drawn down any construction finance. And we have enough cash in the JV to fund construction activities going forward for the next 9 to 12 months. -------------------------------------------------------------------------------- Pulkit Patni, Goldman Sachs Group, Inc., Research Division - Equity Analyst [24] -------------------------------------------------------------------------------- Sure. So the change that we see in your debt schedule quarter-on-quarter is a reflection of a, the moratorium interest getting added and the additional debt on Palladium Ahmedabad? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [25] -------------------------------------------------------------------------------- That would be correct. -------------------------------------------------------------------------------- Pulkit Patni, Goldman Sachs Group, Inc., Research Division - Equity Analyst [26] -------------------------------------------------------------------------------- Sure. And my second question is on the previous -- based by the previous participant about there would be some cancellations. I understand that these cancellations -- can you highlight what is the treatment of the security that you have against some of these early terminations? And is that something that we have gained from in the previous quarter in the INR 40 crore rental number that you discussed on the retail front? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [27] -------------------------------------------------------------------------------- No. So let me clarify that contractually, we have -- at an average, we have about 6 months rent as a security deposit. But the termination clause beyond the lock-in may require anywhere between 1 to 3 months notice. So in the event that there is an early termination, which is within the lock-in period, then clearly, there is a 6-month rent that can get adjusted against the security deposit. If it's after the lock-in, then for 1 to 3 months, that is the notice period, and one can adjust the security deposit against that. In our current collections that we have discussed earlier in the call or the rental income that we have demonstrated, we've not -- since there have been no terminations, we've not had to adjust any security deposit against that. -------------------------------------------------------------------------------- Operator [28] -------------------------------------------------------------------------------- The next question is from the line of Dushyant Mishra from SageOne Investment. -------------------------------------------------------------------------------- Dushyant Mishra, [29] -------------------------------------------------------------------------------- I have just 2 questions. One, have you renegotiated any payment terms to any of these construction companies who are working on your project? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [30] -------------------------------------------------------------------------------- Mr. Mishra, may I request you to repeat your question again? -------------------------------------------------------------------------------- Dushyant Mishra, [31] -------------------------------------------------------------------------------- Yes, of course. I was just asking if you had any -- adjusted your payment terms with the construction companies working on any of the construction projects? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [32] -------------------------------------------------------------------------------- Not really. We've not had to renegotiate or change any payment terms. We have, in fact, been looking at ways and means to support them. And there were several running bills that had been generated prior to the lockdown. So this was money that we owed the contractors. And we have, over the last 3 months in small amounts, disbursed funds against these invoices that were raised against this complete -- work completed. But we've not had to renegotiate any payment terms. -------------------------------------------------------------------------------- Dushyant Mishra, [33] -------------------------------------------------------------------------------- Okay. Okay. And the second question is on the waiting list. So given that you only had 10 to 12 people leave at each mall, how is the waiting list looking according to that? Well, is it fair to assume you'd be able to operate at those 98% occupancy going forward? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [34] -------------------------------------------------------------------------------- Well, we remain confident that vacancies, if any, and largely, these are in the -- as I mentioned, in the F&B and food court space, as we start seeing some level of normalcy return, and as you know, in Maharashtra, they have not yet allowed F&B to commence operations, we hope that these vacant spaces, as they come up, will get replaced by newer formats because the F&B business generally does see a lot of churn. But we've also seen that where there is a vacuum created, there are always new formats and new operators that come into play. So yes, I would say that we should be in the high 90s in terms of trading occupancy going forward as well. If there is a drop off, it may be for a very short period. -------------------------------------------------------------------------------- Operator [35] -------------------------------------------------------------------------------- The next question is from the line of Abhishek Bhandari from Macquarie. -------------------------------------------------------------------------------- Abhishek Bhandari, Macquarie Research - Analyst [36] -------------------------------------------------------------------------------- Shishir, I have 2 questions. First, on the upcoming fundraising program. One of the reasons you have mentioned for raising that kind of money is seeking growth opportunities in the current environment when many of these players might be exiting or you might have some opportunities. So if you could give us some kind of idea about what kind of opportunities you're seeing? Are they more in Tier 1 market? Or are they more brownfield kind of nature or land? That's one. The second thing especially is on the reopening of malls, congrats on that, finally some good news coming in Mumbai and Pune. So what kind of percentage of leasing area will be started in the first few weeks? Those 2 are my questions, and I'll ask if there is any more. -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [37] -------------------------------------------------------------------------------- Thank you for the question, Abhishek. I want to mention here that we have -- we will only take a decision on further capital raise once -- after we get our shareholders approval. Our belief is that in this current environment, companies that have a strong balance sheet, liquidity and cash on its books, these are companies that are going to continue to grow bigger and stronger going forward. That's our approach to this capital raising. We have not decided finally on the final quantum or timing as yet. I would like to again draw attention to our last investor call on this matter where we had explained that we would -- if we were to raise cash, it would be to have a bit of a nest egg or a war chest available with us to bide over the present uncertain times. And as we start seeing some level of normalcy starting to return, that's the time when we will look at growth opportunities. There are sporadic few growth of -- a few acquisition opportunities that have been presented, both in completed assets and brownfield assets. But these are -- we will seriously evaluate these only once we start seeing some level of normalcy return. We expect that after in about 4 to 6 months, that would be a time to really consider any serious evaluation of acquisition. But for the moment, we would like to hold on to this cash and just keep it available as a war chest or a nest egg to bide over uncertain times. Your second question, if I may request you, Abhishek, to repeat again. -------------------------------------------------------------------------------- Abhishek Bhandari, Macquarie Research - Analyst [38] -------------------------------------------------------------------------------- Yes, second question was Mumbai and Pune malls, which will open on 5th of August so what kind of leasable -- I mean, what percentage of GLA will start it in the first few weeks? Just like in Bangalore, if I remember correctly, it was almost between 75% and 80%. What is the number, what you think would be in those? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [39] -------------------------------------------------------------------------------- Okay. So let's understand that there are certain activities that are not permitted. So we know that restaurants are not permitted, family entertainment centers are not permitted and the multiplexes are not permitted to commence operations. Cumulatively, these may translate to about 25% or thereabouts at an average of our total GLA. So about -- one can say, about 75% of our total GLA is permitted to operate. We are -- since this notification has come up only yesterday, our teams are now actively engaged as we speak with our retailer partners to understand their opening plan and how soon they can inventorize their stores and get their staff back in. But I would assume that we should see a similar trend as we've seen in Bangalore. As far as the mall is concerned, we are extremely well prepared to welcome our guests back in terms of all safety standards, sanitization procedures, other initiatives. But it would be safe to assume that in the first 4 weeks, out of the 75% of the permissible activities, we should be able to hit about at least 80% of that area. -------------------------------------------------------------------------------- Operator [40] -------------------------------------------------------------------------------- The next question is from the line of Amandeep Singh from AMBIT Capital. -------------------------------------------------------------------------------- Amandeep Singh Grover, AMBIT Capital Private Limited, Research Division - Research Analyst [41] -------------------------------------------------------------------------------- Sir, can you help us understand what has been the operational area and early trends at Phoenix Palassio, Lucknow? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [42] -------------------------------------------------------------------------------- It's too early days Amandeep to talk about Phoenix Palassio. But just to give you a broad overview, we have approximately 100 stores that are currently operating at Phoenix Palassio. We have seen footfalls of roughly around 4,000 people averaging every day. In UP, malls are not being allowed to operate on weekends. So Saturday, Sundays are off. The mall is shut. And about -- of the permissible area -- of the permissible activities, roughly 60% or slightly higher than that is currently operating. In the next 60 days, we expect this number to move up closer to about 80% as the fit-outs are ongoing with other stores. So this is an important point to understand that retailers and several of the large brands are working at, I would say, at a very good pace to complete their fit-outs and/or refreshing of their stores to open. Every day, we are seeing 2, 3, 4 stores open up at an average at this mall. -------------------------------------------------------------------------------- Amandeep Singh Grover, AMBIT Capital Private Limited, Research Division - Research Analyst [43] -------------------------------------------------------------------------------- Sure, this is helpful. And sir, as a follow-up on this, I believe that the in-place rental were around INR 105 per square foot per month. Will it be fair to assume that minimum guaranteed negotiations have also been extended to this mall? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [44] -------------------------------------------------------------------------------- Yes, for an initial period, I would say, of about 3 months. Some relief we have given for the initial period of 3 months. And in some cases, we may have extended some relief until December. -------------------------------------------------------------------------------- Amandeep Singh Grover, AMBIT Capital Private Limited, Research Division - Research Analyst [45] -------------------------------------------------------------------------------- Sure, sir. And sir, lastly, you were witnessing increasing traction on your residential portfolio as highlighted in the previous call. Sir, will there be any update on the same? Or it's too early to comment? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [46] -------------------------------------------------------------------------------- As I had mentioned in the last call, we have created a new product in our luxury towers there, where we have actually resized some apartments and split the larger apartments into smaller apartments. We launched this sometime in the middle of June, and we have seen significant traction in terms of the number of people coming in and the interest level remains high in this period. We have concluded -- formally concluded 1 transaction, and there are 3 more, which have reached a stage of finalization and initial deposits have come in or will be coming in any day. Roughly around 15,000-odd square feet between these 4 transactions will get completed in terms of sales. And the average price would be somewhere in the middle of -- range of about INR 14,500 to INR 15,000 per square foot. -------------------------------------------------------------------------------- Operator [47] -------------------------------------------------------------------------------- The next question is from the line of Biplab Deb from Antique Stockbroking. -------------------------------------------------------------------------------- Biplab Debbarma, Antique Stockbroking Ltd., Research Division - VP [48] -------------------------------------------------------------------------------- My first question is, sir, looking at the EBITDA margin, just trying to understand what would be fixed employee costs including management salaries and other corporate expenses that can't be passed on as CAM charges? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [49] -------------------------------------------------------------------------------- So I'm going to answer this in multiple parts. A, we have been -- firstly, all the employees, who are located and working within a mall, their costs do get translated into the CAM expenses, and they get passed through there. Secondly, it's only the -- therefore, it's only the head office team whose costs do not get passed onto the -- passed on as CAM, right? Secondly, during this period, we have also taken certain steps in terms of reducing salary costs. We've had to work with our teams, and we -- everybody has been very, very forthcoming in taking a little bit of a reduction in those costs. Typically, in our hotels, our employee cost was about INR 56 crore per year and that is now down to about half. -------------------------------------------------------------------------------- Biplab Debbarma, Antique Stockbroking Ltd., Research Division - VP [50] -------------------------------------------------------------------------------- Hello? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [51] -------------------------------------------------------------------------------- Sorry, does that answer your question? -------------------------------------------------------------------------------- Biplab Debbarma, Antique Stockbroking Ltd., Research Division - VP [52] -------------------------------------------------------------------------------- No, I just wanted to -- yes, partly, sir, I just wanted to understand what is the employee cost that can be passed on to as CAM, because further, I mean, there will be some head office cost... -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [53] -------------------------------------------------------------------------------- Essentially, the head office cost is what you are looking at approximately? -------------------------------------------------------------------------------- Biplab Debbarma, Antique Stockbroking Ltd., Research Division - VP [54] -------------------------------------------------------------------------------- Yes, sir. -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [55] -------------------------------------------------------------------------------- We will just look it up, and we will answer that question shortly. -------------------------------------------------------------------------------- Biplab Debbarma, Antique Stockbroking Ltd., Research Division - VP [56] -------------------------------------------------------------------------------- Okay. That's fine, that's fine. Second question is, sir, regarding -- as you mentioned, family entertainment, F&B and multiplex not allowed to start in Maharashtra. Although it's a good news that they have -- they're allowing malls to operate, very much welcome. But just trying to understand the impact of that? Sir, in general, the pre-COVID, what would be the income contribution of these segments, multiplex, F&B and family and entertainment in terms of percentages of the total income that the mall earns? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [57] -------------------------------------------------------------------------------- Okay. So in some states, F&B has been permitted. So for example, we know in Bangalore, our restaurants and all have commenced operations. Generally, the contribution from entertainment, F&B and multiplex is less than about -- in the range of about 17% to 20% across the malls, the contribution of rent -- towards overall rent is in that range. And just to answer your previous question, our head office costs are in the range of about INR 1 crore. Currently, they've been reduced to about INR 1 crore to INR 1.25 crore per month. That's the reduced cost that does not get passed through as CAM. -------------------------------------------------------------------------------- Operator [58] -------------------------------------------------------------------------------- The next question is from the line of Atul Mehra from Motilal Oswal Asset Management. -------------------------------------------------------------------------------- Atul Mehra, [59] -------------------------------------------------------------------------------- So particularly on the Slide 11, very interesting initiative by us on the pickup initiatives like shop on the go and home delivery. So just want to understand a little bit more over here. So a lot of these -- so while you chat on the WhatsApp, the shopping assistant is primarily the employee of the retailer who's interacting or is it one of our Phoenix Mill's employees who's interacting? How is it so far? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [60] -------------------------------------------------------------------------------- Yes. So we -- what -- we have a kind of a concierge service across all locations. We've initiated this -- we've taken this initiative as a starting -- as a test case in Bangalore. And it is our team member who sits at that asset as part of the concierge team who will -- who coordinates this entire effort. So the WhatsApp messaging happens with our concierge team, and they are the shopping assistant who reach out to the retailer. We try and provide a catalog and facilitate the sale -- the transaction. And also I want to add here that in Bangalore, we've also started this new initiative, where from our Instagram handle, one can order food as well online. So there's a link-up through Zomato from our Insta handle and one can order food as well from the restaurants there. -------------------------------------------------------------------------------- Atul Mehra, [61] -------------------------------------------------------------------------------- Right. And just in this shopping interface that we have on WhatsApp. So is that also that over and above, say, the initial conversation that we might have for -- with one of our employees, does it also redirect to, say, one of the store employees, if at all, there is a deeper level of inquiry or negativity or... -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [62] -------------------------------------------------------------------------------- So the customer interface is our team member. And that does not get redirected to the store employees. -------------------------------------------------------------------------------- Atul Mehra, [63] -------------------------------------------------------------------------------- Right. And Shishir, just 1 more thing. I'm just thinking about this and -- led by this slide of yours. When we think about Phoenix as a place to visit, it's one of the more affluent places to visit with very interesting in terms of store and brand presence. At this point in time, if you look at it from a digital perspective, you don't have any in terms of digital platform, which will have the store mix and the brand mix that you offer. So is it possible for us? And is it something that we can think about where we can have an online platform in terms of having all our brands and stores listed and taking this initiative forward, like we've done with WhatsApp? Is that something that we can look at? Because in today's time, like a lot of people I'm aware of, who are regular shoppers, and today, this time, they are somewhat thinking about to visit or not and so on. So that can be like a great enabler for your regular shoppers per se. So anything on that sort? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [64] -------------------------------------------------------------------------------- Yes. So what you're referring to is what we are internally working on an initiative called the omnichannel, which basically -- if you see our -- our new websites of all Phoenix MarketCity, you will see that it has been designed in a manner to facilitate an omnichannel platform, which we are currently working on with our retailers, which allows them to use our platform to facilitate as an additional sales channel, to facilitate online sales. So this is an initiative that we have undertaken and it's being developed. -------------------------------------------------------------------------------- Atul Mehra, [65] -------------------------------------------------------------------------------- Very interesting. And just one final thing on this. As we maybe look at this platform and so on, I think what is also important is, given like, for us in the past, we were like one -- like popular destinations to come and everybody knows about it. The awareness around, say, even the WhatsApp or the Phoenix MarketCity platform, we might need to build some awareness through advertising, maybe if we can participate and with the retailers and co-promote in terms of the online platform or the omnichannel experience. So that can potentially build a lot of awareness in that sense. So just on that. -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [66] -------------------------------------------------------------------------------- Thank you. Thank you for that thought. I think our teams are actively working on this. As I mentioned, we have kicked off these initiatives at Phoenix MarketCity, Bangalore. And soon, they will extend to our other locations. Currently, direct marketing is what we are focusing on. And it's been only a couple of weeks since we've launched these initiatives at Bangalore. So there will be a lot of social engagement that will continue to follow as we see traction pick up on this. -------------------------------------------------------------------------------- Operator [67] -------------------------------------------------------------------------------- The next question is from the line of Abhinav Bhandari from Nippon India. -------------------------------------------------------------------------------- Abhinav Bhandari, [68] -------------------------------------------------------------------------------- While in the initial comment that you mentioned on the lockdown period, the waiver of rental is pretty clear. Just wanted to understand more on the breakup between revenue share and the guaranteed rental. So what we hear from media with some of the mall developers is that the breakup has gone down to as much as 50-50 or 60-40 in some of the cases for the next 12 to 15 months. So where we would be in this overall breakup of scheme of things? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [69] -------------------------------------------------------------------------------- Sorry, may I request you to explain what is (inaudible)? -------------------------------------------------------------------------------- Abhinav Bhandari, [70] -------------------------------------------------------------------------------- So the minimum guaranteed and there is a revenue share from retailers, right, which I understand -- if I understand correctly, was about 80 to 20 or 85-15 for us previously. Is there a change in that structure also in the negotiations? And if yes, up to how much and up to what tenure, just to understand. -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [71] -------------------------------------------------------------------------------- Okay. So let's understand that typically, our -- out of our gross rental, approximately 90% was coming from the fixed rental. And because consumption was growing, we were getting the incremental, say, 10% or thereabouts on account of increasing revenue share. -------------------------------------------------------------------------------- Abhinav Bhandari, [72] -------------------------------------------------------------------------------- Correct. -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [73] -------------------------------------------------------------------------------- Now for the period of lockdown, as you mentioned, is quite clear. Once the mall becomes operational, there is a reduction on the fixed rental component for a fixed period that we may have agreed with on a case-to-case basis. I think if we just look at majority of the cases, nothing kind of really spills over into FY '22 now that Maharashtra malls are also opening. So if such waiver may continue for 2 quarters and in some cases, until the end of FY '21 before we return to contractual rental. So one could assume that as consumption picks up, by the end of this year, in some cases, you may see fixed rental becoming about 80% or 75% to 80% in that range of the overall rental and the incremental coming from revenue share. But it all depends on how consumption starts picking up. And sorry, does that answer your question? -------------------------------------------------------------------------------- Abhinav Bhandari, [74] -------------------------------------------------------------------------------- Got it. So just the main base of 90-10, there is no change on that base, right? Is that understanding correct? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [75] -------------------------------------------------------------------------------- See, like I said, for... -------------------------------------------------------------------------------- Abhinav Bhandari, [76] -------------------------------------------------------------------------------- For the lockdown period, I understood. For the lockdown period, I understood. -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [77] -------------------------------------------------------------------------------- Yes. Let me explain the construct of our rental arrangement with retailers. It is always the higher of either the fixed rent or the agreed percentage of revenue, whichever is higher is what one derives. -------------------------------------------------------------------------------- Operator [78] -------------------------------------------------------------------------------- The next question is from the line of Mohit Agrawal from IIFL. -------------------------------------------------------------------------------- Mohit Agrawal, IIFL Research - Assistant VP [79] -------------------------------------------------------------------------------- So my question is, are banks looking at any of the deposits that we maintain with them. So like the debt services of accounts and all. Are they looking at that differently for us or for industry, considering there could be some volatility in the rentals for some time? So that is -- or once the moratorium opens, do you foresee any change in that? So that was my first question. -------------------------------------------------------------------------------- Pradumna Kanodia, The Phoenix Mills Limited - Group CFO, Head of Finance & Accounts, Director of Finance and Executive Director [80] -------------------------------------------------------------------------------- So as far as the DSRA, which is a debt service reserve account, which is maintained as a part of any standard loan agreement, we have already, in the past, created the fixed deposit with the bankers at the time of the sanction and disbursement of the loans. Some of them is in the way of fixed deposits and some also are by way of blocking off our OD limits to the extent of the amount that is required for DSRA. So it allows us to avoid any negative carry because fixed deposits are generally at a lower rate and the interest which they charge on the loans are on a higher side. So some of the banks have allowed us to block the OD limits to create the DSRA. So between these 2, we have already taken care of our existing obligations. Given the fact that there has been this moratorium, which has been extended by the banks for the first 2 quarters, there has been no additional requirement of DSRA or any other conditions that have been stipulated by any of our bankers. We continue to remain at the same terms and conditions as was before the start of the COVID and the lockdown and the moratorium. So from that point of view, there has been no change. And we hope that once the mall operations begin and cash flows start becoming normal, the banks will feel that much more comfortable, and they would really not feel any need for imposing any additional condition, which is really not required and not called for, because the assets clearly are very, very superior in terms of the security cover that we have offered. So from a security cover point of view, each of these assets offer more than 2x of the loan amount. And it was a temporary mismatch of the cash flows, which have been -- which this moratorium extended by RBI has allowed us to overcome. So I don't see, going forward, there would be any issues with our banking partners from any of these points of view. -------------------------------------------------------------------------------- Mohit Agrawal, IIFL Research - Assistant VP [81] -------------------------------------------------------------------------------- Sure. Sir, that's clear. And sir, just 1 clarification. You said that the first quarter numbers when you gave the cash flow, that will be the peak cash burn. You said that even as the next quarter, the rental might still be low, but you may start servicing the debt. So you maintain that even in the second, third quarters, you would see the cash burn lower than first quarter? Is that understanding correct? -------------------------------------------------------------------------------- Pradumna Kanodia, The Phoenix Mills Limited - Group CFO, Head of Finance & Accounts, Director of Finance and Executive Director [82] -------------------------------------------------------------------------------- Yes. I think because the first 2 quarters -- if you see our rental income typically the last year used to be -- our EBITDA used to be equal to our rental income or even greater than that. So from that point of view, any recoveries that we have and as malls begin operations, our ability to recover all our operating costs through CAM is clearly there. So there will be no burning of cash there. And it's only fair to say that whatever surplus that we get will get utilized towards meeting our debt and interest and principal obligations, but largely, the INR 65 crores, which you saw, was towards our CapEx and all. So it was not really a burn, which is on account of the operational cost or the cost that we were incurring during the lockdown period. So from that point of view, if you were to break it between CapEx and non-CapEx items, including the interest obligation that we would have going forward, I think we should be clearly meeting our obligations and the cash burn may not be to that extent. -------------------------------------------------------------------------------- Operator [83] -------------------------------------------------------------------------------- The next question is from the line of Abhinav Sinha from Jefferies. -------------------------------------------------------------------------------- Abhinav Sinha, Jefferies LLC, Research Division - Equity Analyst [84] -------------------------------------------------------------------------------- I have 2 questions. One is on the category wide sales that you have given, the sales trend. So the fashion, accessories, these bits are running fairly low. Now you would attribute this to some trend change in consumption? Or these things do vary with footfall, which seems to be lagging? So that's one. And second question is on fundraising part, again, a follow-up to what the earlier participants asked. Now here, I mean there is -- I suppose the banks are extending the moratorium or doing a restructuring. And either of the 2 seems to be the outcome in the next 30-odd days. Why do you really want to raise equity at this point in time? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [85] -------------------------------------------------------------------------------- So let me answer your first question. It's quite evident when people are not -- not being allowed to step out of their homes for any social activities, social engagements, going out to restaurant, bars, night clubs. People are not buying fashion and accessories. So that is clearly an interim impact that one will see for some time as we start seeing more activities getting unlocked, right? So this is -- that's the reason. But if we actually look at Bangalore, what we have provided is for the period of June on a like-to-like basis compared to June 2019, where also operations in June in Bangalore were impacted on account of an extended 10-day lockdown that was announced in July. There was some -- I would say, some restriction of operations on weekend on Sundays, which continues even now. If we just look at the category of fashion for the last week of June, the number would have been higher than this 19%. This is an average for the full month, and it kind of picked up during the month. Abhinav, may I move on to your next question? -------------------------------------------------------------------------------- Abhinav Sinha, Jefferies LLC, Research Division - Equity Analyst [86] -------------------------------------------------------------------------------- Sure, sure. Yes. -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [87] -------------------------------------------------------------------------------- With regards to capital raise, as I mentioned, that finally, the decision on the quantum and timing will be taken later once we have shareholders' approval. Today, we have adequate cash and even to service -- let's say, if the moratorium does not get extended, we have adequate cash to service our debt obligations for the coming 3 quarters. Having said that, these are uncertain times, and none of us had imagined this kind of a pandemic. It makes sense to just be safe and have adequate liquidity to weather any further storms. We don't intend to dip into the cash that we raise if we go ahead with the capital raise. We don't intend to dip into that cash for any of our existing obligations of operating expenses or interest servicing, et cetera. But it's good to have that cash available on your balance sheet to weather any unforeseen -- further unforeseen circumstances. And as I mentioned, this is the time when we anticipate several opportunities for growth that are likely to come up in the next 12 to 18 months. Some of those we may evaluate once we start seeing some level of normalcy start to return. -------------------------------------------------------------------------------- Operator [88] -------------------------------------------------------------------------------- The next question is from the line of Swagato Ghosh from Franklin Templeton. -------------------------------------------------------------------------------- Swagato Sourya Ghosh, Franklin Templeton Asset Management (India) Private Limited, Research Division [89] -------------------------------------------------------------------------------- I have 2 questions. First one is, are we closely tracking the financial health of various tenants, maybe at the company level or the franchise level? And if we are, what percentage of our total tenant pool is under stress now? And what is our contingent plan if some of these tenants are not able to resume operations or have to somehow shut shop, especially for maybe the restaurant industry, which has not been allowed to open yet? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [90] -------------------------------------------------------------------------------- Right. So I would say that excluding F&B, we have not seen any indication. We understand that there is -- this is a time of financial stress for everybody. Retailers at large, in general, are looking at reducing the number of nonperforming stores, and they have been shutting stores across the country. Their stores in our malls continue to be extremely profitable for them. Retailers have a general view, as do we, that as people start stepping out for their shopping needs and the malls open up, malls will become their preferred port of call for their shopping needs, simply because we are able to provide a very safe and secure environment as opposed to, let's say, high street locations. And this is the view that our retailer partners have also taken. So while they may be shutting nonperforming stores or stores where they believe sales are not going to be high across the country, they continue to have high level of confidence in our malls. And we've not seen any -- as such, any termination. Moving on to F&B, as we've said, yes, F&B operators barring the ones who have a pan-India presence and have some cash. Typically, this is not a balance sheet business. It's -- so one can see some stress happening in F&B operators and the smaller localized ones more so who have food court operations. But as I mentioned earlier, the contribution from F&B to our overall rental is not that high. And the business is one of skill. So if one operator does shut down, it gets replaced by another operator, and one will see that happening in the coming months. -------------------------------------------------------------------------------- Swagato Sourya Ghosh, Franklin Templeton Asset Management (India) Private Limited, Research Division [91] -------------------------------------------------------------------------------- Okay. But are we proactively maybe having those conversations? Or will we wait till they come to us and say that they can't continue? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [92] -------------------------------------------------------------------------------- So we've seen in Bangalore, our F&B operators have started commencing operations in Bangalore because the state government has permitted them to commence operations there. So bulk of them have already recommenced their stores. Bars are not yet permitted to operate. But that's a discussion at a time when they will be permitted to operate, we will get into that. We've negotiated and closed the negotiation with those activities that are permitted to operate. -------------------------------------------------------------------------------- Swagato Sourya Ghosh, Franklin Templeton Asset Management (India) Private Limited, Research Division [93] -------------------------------------------------------------------------------- Got it. Got it. And second question is, while for all our operational assets, we have the safety measures in place, do we have any data on how we are actually doing on the safety part? What I mean is how many people we have turned away who are probably symptomatic? Or how many people who have visited and probably tested positive, but has not been able to spread the virus within our assets? Any of that sort of data, which would give us the confidence that the measures we have put in place are actually working? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [94] -------------------------------------------------------------------------------- Sure. So we are insisting that mall visitors have Aarogya Setu as a contact tracing app on their phones. And so we are not letting people in who do not have the app. I am not personally privy to how many people have been turned away because the thermal camera showed the temperature exceeding normal levels. But at the operational level, we have -- I would say, we would have the correct protocols in place for that. -------------------------------------------------------------------------------- Swagato Sourya Ghosh, Franklin Templeton Asset Management (India) Private Limited, Research Division [95] -------------------------------------------------------------------------------- Okay. Okay. But have the authorities demanded any of that sort of data? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [96] -------------------------------------------------------------------------------- Yes. There are strict guidelines at both in Lucknow and as well as in Bangalore of records to be maintained, and we are complying. We are compliant with all guidelines. -------------------------------------------------------------------------------- Operator [97] -------------------------------------------------------------------------------- The next question is from the line of Prem Khurana from Anand Rathi. -------------------------------------------------------------------------------- Prem Khurana, Anand Rathi Financial Services Limited, Research Division - Research Analyst [98] -------------------------------------------------------------------------------- So my questions have already been answered. Just one and if you may help me with Slide #10. So the data that you have given essentially comes to imply, I think, over July over June, we seem to have seen a sharp drop in footfalls. Because when I look at average daily consumption for the month of, let's say June versus July, there's a 34% growth, but average spend per footfall is up by 76-odd-percent which eventually means that either people have started -- rather, the invoice size has gone up substantially. So what would explain this sharp jump? Is it that -- I mean, there is change in terms of category mix or? Or would you kind of attribute this to the fear that there could be further lockdowns, which is why people have started stocking more? Which is why the size would have gone in terms of average bill? -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [99] -------------------------------------------------------------------------------- Okay. So a couple of things. Firstly, we are seeing that the profile of the shoppers coming into our malls is -- these are serious shoppers. I would say in terms of -- as you rightly mentioned, our average spend per footfall has been almost, I would say, more than 3x compared to the previous year. So these are serious shoppers who are coming in into mall. The other thing, there has been an impact, as I mentioned earlier, in July, for 10 days -- for 7 or 8 days, the mall was actually shut because of the lockdown being announced in Bangalore again. And even today Sundays are not operational -- the mall is not operational on Sundays. I don't believe that the average spend per footfall has gone up because of people wanting to stock up. If you look at the category-wise consumption, that indicates that there is some discretionary spend also. The average daily consumption has -- as you can see, average daily sales has roughly gone up to about almost INR 1 crore a day, [peak] of operation, compared to the last year. Also interestingly, last year, we had the end-of-season sale, where the base of consumption was very high in the month of June. And this commenced only sometime in the middle of July in Bangalore. And that too was shut down again, it was impacted by 7 days. So right now, end-of-season sales are ongoing. And that does drive a little bit of the consumption up. -------------------------------------------------------------------------------- Pradumna Kanodia, The Phoenix Mills Limited - Group CFO, Head of Finance & Accounts, Director of Finance and Executive Director [100] -------------------------------------------------------------------------------- Sure. But I mean, if I look at the same trend for Lucknow, it seems to be reversed. Essentially, it seems footfalls have been going up, but the average size is going down, so... -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [101] -------------------------------------------------------------------------------- Lucknow, the malls are not operating on weekends. And there was a 3-day lockdown also announced earlier in July. In fact, the weekend after we opened our Phoenix Palassio, immediately for 3 days, there was a lockdown in the month of July. So yes, compared to June, where the weekends we were operating, in July the weekend business has been impacted because of the lockdown on Saturdays and Sundays. -------------------------------------------------------------------------------- Operator [102] -------------------------------------------------------------------------------- Ladies and gentlemen, due to time constraints, we'll take that as the last question. I now hand the conference over to Mr. Shishir Shrivastava for closing comments. -------------------------------------------------------------------------------- Shishir Ashok Shrivastava, The Phoenix Mills Limited - MD & Executive Director [103] -------------------------------------------------------------------------------- Thank you, everyone, for joining in on this call, and we look forward to interacting with you at the end of the next quarter. -------------------------------------------------------------------------------- Operator [104] -------------------------------------------------------------------------------- Thank you. On behalf of (technical difficulty)