Buy Anant Raj Ind; target of Rs 95: Motilal Oswal

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Buy Anant Raj Ind; target of Rs 95: Motilal Oswal

Motilal Oswal is bullish on Anant Raj Industries and has recommended buy rating on the stock with a target of Rs 95 in its February 10, 2012 research report.

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Motilal Oswal is bullish on Anant Raj Industries and has recommended buy rating on the stock with a target of Rs 95 in its February 10, 2012 research report.

"Anant Raj Industries (ARIL) is a focused city-centric developer and is one of the largest land owners in Delhi, with a fully paid land bank of ~1,000 acres. Given its citycentric focus and large holdings of prime land in and around Delhi, we expect it to be a key beneficiary of the revival in the RE sector. ARIL has ~4msf of completed commercial/retail projects along with ~3msf under construction, which it can lease to bolster its rental income."

"ARIL has a robust business model with multiple revenue streams and high monetization visibility from strong pre-sales in ongoing projects. Approval in much awaited Golf course Road project is a strong positive. The project would be key sales driver over next3-5years. Triggers are a) successful response to Golf course project and b) improvement in leasing in Manesar IT Park and rental uptick from Kirti nagar mall. ARIL is facing challenges with regard to leasing of its key commercial and retail projects, due to the low demand in these segments. ARIL is over-exposed to RE market of NCR. This could be a key risk in case of market specific torpidity. Slower execution in ongoing projects till date." ARCP's ongoing projects witnessed QoQ decline in sales at 0.4msf (INR0.9b) as against 0.6msf (INR1.6b). ARCP received LOI for first 102 acres of Golf Course Road (Sector 63A) integrated township project and launched plotted sections at a price range of INR75- 77,000 per square yard (plot sizes of 400/500/800 sq yards)."

"Approval in the much awaited Golf Course Road project is a strong positive. We believe successful monetization of Golf course project is the near-term triggers for the stock. The stock trades at 8.1x FY13E EPS of INR8.8, 0.5x FY13E BV and at ~44% discount to our NAV of INR129.Maintain Buy," says Motilal Oswal research report.

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To read the full report click on the attachment