 "Motilal Oswal initiates coverage on Anant Raj with 'Buy'; share hits record")
Anant Raj share price: Real estate company Anant Raj shares were buzzing in trade on Friday, December 20, 2024, as the scrip soared up to 3.74 per cent to hit an all-time high (record high) of Rs 869 apiece.
The rise in Anant Raj share price came after domestic brokerage Motilal Oswal Financial Services Limited (MOFSL) initiated coverage with ‘Buy’ for a target price of Rs 1,100, reflecting an upside of 31.3 per cent from the previous close (December 19) of Rs 837.60.
“While execution risks remain, we expect significant revenue and earnings before interest, tax, depreciation and amortisation (Ebitda) margin expansion, driving long-term value creation. We initiate coverage on the stock with a ‘Buy’ rating and a target price (TP) of Rs 1,100,” said Abhishek Pathak, Abhishek Lodhiya, Keval Bhagat and Tushar Dhonde of Motilal Oswal, in a note.
On the bourses, Anant Raj shares have risen over 27 per cent in the past month, while they have climbed 95 per cent in the last six months. In comparison, BSE Sensex has gained a little over 2 per cent in the last six months.
Given this, here are the top factors for initiating coverage on Anant Raj:
Ongoing diversification
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Analysts noted that Anant Raj is shifting from its core real estate focus to a more diversified business model, with strategic investments in data centres (DCs) and cloud services. The move, they believe, taps into India's rising data localisation and digital transformation trends. With a target of 300MW capacity for DCs over the next 4-5 years, the company is leveraging its existing technology parks to improve execution speed and cost efficiency.
Focus on profitability
Anant Raj's entry into higher-margin cloud services (IaaS) through its partnership with Orange strengthens its profitability potential, with cloud capacity expected to hit 25 per cent by FY32. The company's residential segment remains solid, with 14 million square feet (msf) in deliveries anticipated by FY30, contributing a cumulative net operating profit after tax (NOPAT) of Rs 8,510 crore.
Multiple growth levers at play
According to Motilal Oswal analysts, the company’s strong pre-sales, collections, and operational cash flows provide a strong foundation for growth. Despite execution risks, major revenue and Ebitda margin expansion is expected, driving long-term value creation.
In a separate report dated December 2, domestic brokerage firm Emkay initiated coverage on the company with a ‘Buy’ rating for a target price of Rs 925, reflecting an upside potential of 37 per cent.
Analysts at Emkay said, “We initiate coverage on Anant Raj with ‘Buy’ and SoTP-based TP of Rs 925 (37 per cent upside). Anant Raj has garnered a strong brand name as a reputed real estate developer in the NCR market, over the last 5 decades. A comfortable launch pipeline (availability of low-cost land bank and scope to accumulate more) would drive bookings/collections compound annual growth rate (CAGR) of 18 per cent/39 per cent, respectively, during FY24-27E, generating a healthy cash flow stream.”
At 11:00 AM, Anant Raj shares were trading near record high levels, up 3.58 per cent at Rs 867.60 apiece. In comparison, BSE Sensex was trading marginally lower (0.03 per cent) at 79,196.84 levels.