Emkay Initiates Coverage On Anant Raj; Bullish On Real Estate, Data Center Businesses

Emkay Global has initiated coverage on Anant Raj Ltd. with a 'buy' rating and a target price of Rs 925, implying a 37% upside.

With a massive 220-acre land bank in NCR and an untapped development potential of 12 million square feet in Delhi, Anant Raj's residential business is on solid footing, according to the brokerage.

The company is poised for an 18% compound annual growth rate in bookings and a 39% CAGR in collections over fiscals 2024 to 2027. Emkay claims that the Rs 7,000 crore launch pipeline and additional GDV (Gross Development Value) potential of Rs 10,000 crore make this a standout play in the NCR real estate space.

Anant Raj’s data center business, which took off in fiscal 2023, is scaling rapidly with a planned capacity ramp-up to 307MW in the next 4-5 years from 6MW currently, as per the report. Leveraging its access to low-cost land and civil structures, the company has a cost and time advantage, positioning itself to capture the growing demand for digital infrastructure, driven by 5G, fiber expansion, and data protection policies, added the firm.

The data center business is projected to generate revenue of Rs 850 crore by the financial year 2027, compared to nil in the last fiscal. Margins are expected to remain strong, with Ebitda margins steady at 75-80%. Additionally, Emkay also stated that the business is expected to deliver a healthy internal rate of return of 21%, reflecting its strong growth potential.

With a deleveraged balance sheet and plans for a Rs 2,000 crore fundraise, Anant Raj is well-equipped to fund its dual growth engines, says Emkay. By fiscal 2027, consolidated earnings are expected to post a 35% CAGR, supported by strong cash flows from real estate collections and DC profitability.