Anant Raj — Q4 FY23 earnings call

Call held 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

  • 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.

Key financials

  1. Revenue ₹1,004 Cr
  2. Net Profit ₹151 Cr +179.6%YoY
  3. Weighted Average Cost of Debt 13.7%
  4. Residential Inventory Value ₹1,700 Cr

What they filed

Q1 FY27: revenue up 12.5%, net profit up 12.9% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue298 328 337 352 371 +24%374 +14%394 +17%396 +13%
EBITDA51 55 65 69 79 +55%74 +35%90 +38%92 +33%
Net profit53 58 65 70 74 +40%78 +34%77 +18%79 +13%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Data Centers
    3 MW Operational Capacity85 lakh /mw/month Rental Income₹25 Cr Capex per MW
  • Commercial/Leasing
    5 million sq ft Constructed Area₹50 Cr Annual Rental Income₹14 Cr Hotel Revenue

Guidance & targets

Capacity

  • Data Center Capacity (Manesar) Capacity · by September 2023 · High confidence 6 MW
    As of now we have three which is up and running, three will go to six by September

    — Amit Sarin, Managing Director

  • Data Center Capacity (Manesar) Capacity · by April 2024 · High confidence 21 MW
    One year will be 21, the income kicking in from 21

    — Amit Sarin, Managing Director

  • Data Center Capacity (Manesar) Capacity · next 2 years · Medium confidence 50 MW
    In Manesar, we plan to completely do about 50 and which we plan to do in the coming two years

    — Amit Sarin, Managing Director

Volume

  • New Residential Launch (Group Housing) Volume · next 6 months · High confidence 1,000,000 sq ft
    In the next six months we will see one more big launch coming in by way of group housing... that is about one million square feet.

    — Amit Sarin, Managing Director

Debt

  • Funding Strategy for Data Centers Debt · next 12 months · High confidence 0 new debt
    The whole idea is to do this without taking on debt, we are very clear that we do not want to do this by taking debt.

    — Amit Sarin, Managing Director

Risks & concerns

  • Geographic Concentration

    medium

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

    Analyst acknowledged

  • Execution Risk in Data Centers

    medium

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

    Management acknowledged

  • High Interest Rates

    low

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

    Management downplayed

Areas of evasion (1)

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

Q&A highlights

3 direct
Debt Refinancing and Cost Reduction Direct
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

Data Center Economics and Capex Direct
The rental here goes per megawatt, and it is anything in between 85 to 90 lakhs per month per megawatt. The expense which you incur is about 25% of that. The balance is free cash flow.

Provides granular unit economics for the new business segment, showing high EBITDA margins (~75%).

Asked by Hitendra Gupta

Funding for Data Center Expansion Direct
We have enough money coming in from Ashok Estates and Anant Raj Estates and that is getting diverted here... we feel that we will be able to fund this on our own.

Management is prioritizing self-funding over equity dilution or additional leverage for their most capital-intensive growth project.

Asked by Avinash Gorakshekhar

2 min read 4 chapters

Detailed narrative

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%.

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.

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.

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.

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