Buy Anant Raj; target of Rs 925: Emkay Global Financial

Emkay Global Financial's research report on Anant Raj

A comfortable launch pipeline (availability of low-cost land bank and scope to accumulate more) would drive bookings/collections CAGR of 18%/39%, respectively, during FY24-27E, generating a healthy cashflow stream. This, coupled with a deleveraged balance sheet and likely fund-raise of Rs20bn, would pave the way for a sharp ramp up of the company’s Data Center (DC) business. Availability of land/civil structures gives competitive advantage and would aid faster capacity addition (expected @102MW by FY27E; 6MW, as of Q2FY25). Rise in share of cloud-based services would further boost profitability. EBITDA/PAT of the DC business is likely to sharply increase to Rs6.5bn/Rs3bn by FY27E (nil in FY24). Overall, we expect ~21% IRR for the DC business (up to FY45E).

Outlook

We initiate coverage on Anant Raj (ARL) with BUY and SoTP-based TP of Rs 925 (37% upside). ARL has garnered a strong brand name as a reputed real estate developer in the NCR market, over the last 5 decades.