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    Anant Raj

    ANANTRAJStrong
    Realty·27 Apr 2023
    Management Summary

    Anant Raj delivered a landmark performance in FY23, crossing the ₹1,000 crore revenue milestone and nearly tripling its profits. The company is undergoing a strategic transformation, leveraging its existing commercial land bank to pivot into the high-margin Data Center business while maintaining strong momentum in its Gurgaon residential township. Management is focused on debt reduction and self-funding its expansion through robust internal accruals from residential sales.

    Highlights

    7

    • Annual turnover crossed ₹1,004 crores for the first time in the company's history.

    • Net Profit (PAT) surged to ₹151 crores in FY23, up from ₹54 crores in FY22.

    • Data Center business launched with 3 MW operational; targeting 21 MW in one year and 50 MW in two years at Manesar.

    • Successfully refinanced high-cost debt (20%) with Apollo at a lower rate (14%), reducing weighted average cost of debt to 13.7%.

    • Residential inventory at Anant Raj Estate (Gurgaon) valued at approximately ₹1,700 crores.

    • Ashok Estates project (plots) launched in July 2022 is already 50% sold with ₹250 crores collected.

    • Data center unit economics: ₹25 crore capex per MW with monthly rentals of ₹85-90 lakhs per MW.

    What Changed1

    vs Q2 FY24

    Risks discussed2 → 3 (+1)

    Key financials

    Single quarter

    04 metrics
    1. 01Revenue₹1,004 Cr
    2. 02Net Profit₹151 Cr+1.8%YoY
    3. 03Weighted Average Cost of Debt13.7%
    4. 04Residential Inventory Value₹1,700 Cr

    Segment breakdown

    Data Centers
    3 MW Operational Capacity85 MW Rental Income₹25 Cr Capex per MW
    Commercial/Leasing
    5 Mn Constructed Area₹50 Cr Annual Rental Income₹14 Cr Hotel Revenue
    List

    Guidance & targets

    5
    CategoryTargetPriority
    Capacity
    Data Center Capacity (Manesar)
    6 MW
    		High
    Capacity
    Data Center Capacity (Manesar)
    21 MW
    		High
    Capacity
    Data Center Capacity (Manesar)
    50 MW
    		Medium
    Volume
    New Residential Launch (Group Housing)
    1,000,000 sq ft
    		High
    Debt
    Funding Strategy for Data Centers
    0 new debt
    		High

    Risks & concerns

    4
    RiskSeverity

    Geographic Concentration

    The majority of current and future residential revenue is tied to Sector-63A in Gurgaon. — Analyst acknowledged

    medium

    Execution Risk in Data Centers

    While demand is high, the company must execute the rollout of racks and infrastructure (₹25 Cr/MW) on time. — Management acknowledged

    medium

    High Interest Rates

    Management believes end-user demand in Gurgaon is sustainable despite broader rate environments. — Management downplayed

    low

    Areas of Evasion(1)

    • Specific names/profiles of private data center clients (cited confidentiality).

    Q&A highlights

    3

    “Old one was at about 20% this is 14%, so this is further bringing down the cost of debt to the company.”

    Confirms a significant 600bps reduction in interest costs for a portion of their debt, improving cash flow.

    asked by Amanjit Singh

    2 min read4 chapters

    Detailed Narrative

    01

    Strategic Pivot to Data Centers

    Anant Raj is aggressively repurposing its existing commercial buildings into data centers, targeting a total capacity of 300 MW across three locations. The Manesar facility is the immediate focus, with 3 MW already operational and a clear roadmap to reach 21 MW within a year. Management highlighted a significant competitive advantage: since the land and buildings are already owned and constructed, they can deploy capacity faster and at a lower capex of ₹25 crore per MW compared to greenfield projects. The business model is highly lucrative, with expected monthly rentals of ₹85-90 lakhs per MW and operating expenses limited to 25%.

    02

    Gurgaon Residential Momentum

    The company's residential business in Sector-63A, Gurgaon, remains the primary cash engine. The 'Ashok Estates' plotted development has seen 50% of its inventory sold within months of launch, with prices in the region appreciating by nearly 60% over the last few years. Anant Raj currently holds an inventory of approximately ₹1,700 crores in this sector and plans to launch another 1 million square feet of group housing in the next six months. Management noted that 70% of demand is coming from end-users, which they view as a sign of market sustainability.

    03

    Debt Optimization and Refinancing

    A key theme of the call was the improvement in the company's balance sheet. Anant Raj successfully refinanced high-cost debt, previously at 20% interest, with a new ₹200 crore tranche from Apollo at 14%. This has helped bring the weighted average cost of debt down to 13.7%. Management emphasized their 'aversion' to increasing debt, stating that the ₹400-450 crore investment required for the next 21 MW of data center capacity will be funded through internal accruals from residential sales rather than new borrowing.

    04

    Asset Monetization and Leasing

    Beyond new developments, the company generates steady income from its 5 million square feet of constructed commercial space. Currently, about 1 million square feet is leased out, generating ₹50 crores annually, while hotel assets contribute another ₹14 crores. The company is strategically evaluating whether to lease remaining commercial space traditionally or convert more of it into data centers, which offer significantly higher yield potential.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.