DIWALI PICK 2024🪔

~ CA Shyam Kalani, NiSM Certified

ANANT RAJ

CMP 683

Target 922 ( 1 year)

Fundamental Analysis of Anant Raj Limited

Company Overview

Anant Raj Limited is strategically focused on expanding its presence in the rapidly growing data center market in India. The company, through its subsidiary Anant Raj Cloud, is making significant investments to meet the increasing demand for data storage and cloud services, driven by technological advancements.

Key Financial Metrics

Market Capitalization: ₹23,755 Cr.

Current Price: ₹683

High/Low: ₹796 / ₹230

P/E Ratio: 68.5

Book Value: ₹112

Dividend Yield: 0.11%

ROCE: 8.56%

ROE: 8.05%

Face Value: ₹2.00

Profit Growth (3 Years): 213%

Profit Growth (5 Years): 45.4%

Change in Promoter Holding (3 Years): -5.04%

Debt to Equity Ratio: 0.10

Promoter Holding: 60.0%

Reserves: ₹3,759 Cr.

Market Position and Growth Potential

1. Market Dynamics:

The Indian data center market is projected to grow at a CAGR of 18% from 2024 to 2029.

Currently, India consumes 30% of the world's data but holds only 3% of global data center capacity, indicating significant future demand.

2. Strategic Investments:

Anant Raj is investing over ₹10,000 crore to develop 307 MW of data center capacity, with facilities in Manesar, Rai, and Panchkula.

By FY25, the company plans to have 28 MW of IT load operational.

3. Innovation and Partnerships:

The company recently won the ‘Best Innovation in Data Center Design and Infrastructure’ award, underscoring its commitment to excellence.

The upcoming launch of “Ashok Cloud” in partnership with Orange Business aims to address growing storage demands within the GCC (Government Community Cloud) sector.

Financial Health

Profitability: The high P/E ratio of 68.5 may suggest that the stock is overvalued relative to earnings. However, a 213% profit increase over three years reflects strong growth potential.

Low Debt Levels: A debt-to-equity ratio of 0.10 indicates a solid balance sheet, allowing for flexibility in financing future growth.

Promoter Confidence: With 60% promoter holding.

Issue of Preference Share Capital

In Dec,23, company allotted 9,02,527 equity shares at a price of Rs. 277 to Gagandeep Credit Capital Private Limited. The company approved issuing 17,85,714 Fully Convertible Warrants at an issue price of Rs. 280/- to promoter, Shri Ashok Sarin Anant Raj LLP

Risks and Considerations

Valuation Concerns: The high P/E ratio can indicate overvaluation, especially if future earnings growth does not meet market expectations.

Competitive Landscape: As the data center sector grows, competition will intensify. Anant Raj will need to innovate and maintain service quality to secure its market position.

Disclaimer this is not buy or sell recommendation