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Jan 19, 2012, 02.35 PM IST | Source: CNBC-TV18

Anant Raj back in action; launches township project

CNBC-TV18 catches up with the director and chief executive officer of Anant Raj Industries to get the behind-the-scene action as the company launches its township project.

Amit Sarin, Director, Anant Raj Ind

Anant Raj Industries is out to make the best of the opportunities in the housing space. The company in fact made quite a comeback in 2011 with five projects of which three have already been launched. Yesterday, Anant Raj announced the launch of its township project, namely the Anant Raj Estate at Sector 63A, Gurgaon.

The stock has reacted, rebounding back to above Rs 60 levels from its lows of Rs 36 in December. CNBC-TV18 catches up with the director and chief executive officer of the company, Amit Sarin, to get details of the developments with the company and the way forward.

Sarin says that phase I of the new project is spread over 100 acres of land. “The good part is that the main land acquisition for this project has been done in the past one and half years which was not a very good year for real estate," he says. So the benefit of the low land cost has come to the company, which to a point, will is likely to be passed on to the customers.

According to Sarin, the company will be able to maintain its margins while the focus is going to be on bringing down debt on books. Currently, the company has debt of nearly Rs 1100 crore.

Below is the edited transcript of the interview. Also watch the accompanying video.

Q: Tell us about this township project – when are you planning to launch it and what are the details?

A: The first phase of the project is already launched. We carried out an ad in the papers today; that is how we informed the stock exchanges yesterday. This (phase I) is about 100 acres which we have launched. Initially the launch is just plots, and then maybe a week later from now, we will be launching villas and the row-housing too.

Q: What is this in terms of cost? Was the land historically an old purchase?

A: This is a brand new project. Anant Raj in the past one and half years, came back into residential, and in that time, we have spent about Rs 900 crore on land acquisition itself. This is hard cash. On this project alone, we have spent approximately Rs 700 crore on buying the land. The land is now fully complete and fully paid for. We are now launching this project in phases. The good part is that the main land acquisition for this project has been done in the past one and half years which was not a very good year for real estate. So the benefit of the low land cost really came to the company which to a point is also being passed on to the customers.

Q: Will you have to take up more loan in the next year for this project or any of your projects?

A: No more loans; we are done. The net asset value of company of Anant Raj Industries today is about Rs 3,800 crore and the total loan on the company now is about Rs 950 crore. That is it, this is a peak loan. The peak loan was higher, it was about Rs 1200 crore, but we have repaid about Rs 250 crore, and now we are in the trend to reduce the loan. Hopefully by Diwali this year, we will bring the loan to less than half of what it is right now. We do not need any more money, we are fully funded, and internal accruals will take care of the execution of this project completely.

Q: Will you have to take up more loan in the next year for this project or any of your projects?

A: No more loans; we are done. The net asset value of company of Anant Raj Industries today is about Rs 3,800 crore and the total loan on the company now is about Rs 950 crore. That is it, this is a peak loan. The peak loan was higher, it was about Rs 1200 crore, but we have repaid about Rs 250 crore, and now we are in the trend to reduce the loan. Hopefully by Diwali this year, we will bring the loan to less than half of what it is right now. We do not need any more money, we are fully funded, and internal accruals will take care of the execution of this project completely.

Q: Your real estate business has seen quite a bit of a slum. Last quarter it slipped about 40% or so what kind of a revival are you hoping to see both in terms of prices and the quantum of how much you sell, what run rate are you hoping to close?

A: Real estate is a very different business. We are not like other sectors where you have a recession everything goes down and when you have a move everything goes up. This is sector-wise and area-wise. Fortunately, at Anant Raj, we were a zero-debt company till April 2010. April 2010, we had Rs 500 crore of cash in the bank. We went on to take debt and we went on to execution full swing, plus land acquisition. We came back into residential; we basically acquired five residential projects which are pretty huge. This is the fourth one which is now being launched. The launches are pretty much on track. The land cost was very low for us, so in spite of the recession, we are in a position to make decent margins for ourselves and give the benefit of the low land cost to the customer as well. Therefore, if you see project-wise, it is not that bad at all.

Q: What kind of a run rate are you expecting in terms of revenue growth for your company in FY13? What kind of margins do you think you will post and importantly, how are you seeing real estate prices as well trending in the places where you have interest?

A: Where we have interest, we see the prices being very stable. All these five places where we are launching these projects, they are fully established, the infrastructure, everything is in place. So we do not see prices going down from here by any chance. The demand is decent, and because of our low land acquisition cost, our margins will really improve. Our top-line would more than double now for the next year, in fact, even higher than that because now the real effect of these residential projects will start to come in the balance sheet numbers as well.

Q: On debt, when do you plan to scale it down completely and interest cost has been a huge burden for you what is the plan? How much of interest cost are you going to bear from hereon?

A: Interest cost is not very huge for us. We were at Rs 120-130 crore of interest outflow which is easily taken care of by the inflows into the company. Like I just told you, in the beginning, we will bring debt to definitely less by half by this Diwali, which is October-November this year, and by the next financial year, we will be back again to zero-debt company.

Anant Raj stock price

On September 02, 2014, at 12:21 hrs Anant Raj was quoting at Rs 57.25, up Rs 0.75, or 1.33 percent. The 52-week high of the share was Rs 83.45 and the 52-week low was Rs 40.45.


The company's trailing 12-month (TTM) EPS was at Rs 2.81 per share as per the quarter ended June 2014. The stock's price-to-earnings (P/E) ratio was 20.37. The latest book value of the company is Rs 133.14 per share. At current value, the price-to-book value of the company is 0.43.

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