Shares of Phoenix Mills Ltd .surged over 5 percent in early trade on Monday after Morgan Stanley initiated coverage on the stock with an ‘overweight’ rating.

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It has given a price target of Rs 1,700 per share on Phoenix Mills, indicating an upside of over 32 percent from the stock’s closing level on Friday.

Phoenix Mills is a leading retail-led mixed-use asset developer that operates 11 malls across eight cities in India and three new malls are currently under construction.

Morgan Stanley said that the company has a portfolio of well-located, mixed-use destination malls and is set to benefit from India’s consumption growth.

Also Read: Phoenix Mills to develop residential project with upto 350 units on newly acquired land parcel in Kolkata

Additionally, Phoenix Mills is in expansion phase and aims to more than double its rental portfolio over the next 3-4 years, the brokerage noted.

The planned expansion of rental assets from 9 million square feet (msf) in 2021-22 to 21 million square feet in 2026-27 should drive an compounded annual growth rate (CAGR) of its operating profit of 27 percent.

Last week, investment broker Motilal Oswal had also initiated coverage on the stock with a ‘buy’ rating, giving a price target of Rs 2,000 per share over a period of two years.

Giving the rationale behind its bullish outlook, Motilal Oswal had said that Phoenix Mills has 11 operational malls with leasable area of 9 million square feet as of March 2023. The company also recently acquired land to develop a 1 million square feet mall in Surat by 2026-27 and has a long-term vision to add 1 million square feet of retail assets every year.

Shares of Phoenix Mills are off opening highs, but are trading 2.8 percent higher at Rs 1,317.60.

(Edited by : Rukmani Krishna)