'Buy' Anant Raj Shares Maintains Motilal Oswal Post Q1 Results But Cuts Target Price — Here's Why
Motilal Oswal reiterates Buy rating on the stock and revises target price
(Photo source:company website)
Anant Raj launched a new version of independent floors under the brand "The Estate Apartments" at Anant Raj Estate, Sector 63A, Gurugram. The offering received a strong customer response, reaffirming market confidence in the brand and its product.
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Motilal Oswal Report
Anant Raj Ltd.’s residential segment is expected to deliver 14msf over FY25-30, generating a cumulative net operating profit after tax of Rs 72 billion. The residential business cash flow, discounted at an 11.6% WACC with a 5% terminal growth rate, accounts for Rs 2.5 billion in annual business development expenses, yielding a gross asset value of Rs 87 billion, or Rs 253/share.
The annuity business cash flow is discounted at a capitalization rate of 9.5%, valuing it at Rs 10 billion or Rs 30/share.
We expect Anant Raj’s date centre revenue to grow materially, with capacity increasing from 6 MW in FY24 to 307 MW by FY32, along with a shift towards cloud services, which will expand from 0.5 MW to 77 MW over the same period.
We model the free cash flows for the data center business till FY32, using a discount rate of 11.6%, a rental escalation of 3%, and a terminal growth rate of 3%, resulting in an EV of Rs 149 billion or Rs 435/share post deferral of the cloud capex in initial years.
We reiterate our Buy rating on the stock with the revised target price of Rs 807 (earlier Rs 1,085) based on our SoTP valuation.
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