Anant Raj Limited 10 April 2017

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 Company Profile
Anant Raj Group is one of the leading Construction and
Infrastructure Developers in North India

The company have an experience of almost a century in

construction and over thirty years in Construction and
Infrastructure development in the National Capital Region.
The Group has constructed some of the iconic landmarks in
the capital city of Delhi, and is now well on the way to
revolutionizing the very cityscape and skyline of NCR.

Source: www.anantrajlimited.com
 Points to Consider

Lowest Cost and Fully Paid Up Largest Land Bank in NCR

The company has a land bank of 1038 acres. This is the

highest land bank is the NCR region. But what is more
important is that the entire land bank is acquired at a very
low price and it is fully paid. Again, this land bank is within
50 KM of Delhi area.

Balanced Portfolio of Assets

The company has portfolio of real estate assets which are

spread in balanced manner. There are land plots as also
ready to lease commercial plots. Again company also has a
township project named Anant Raj Estate. In addition, there
are hotel plots also. This diversified balanced portfolio
provides company the rental income, which generates cash
flows, while other part of the real estate provides capital
appreciation
 Points to Consider

Focus on Low Cost Housing

The mission of housing to all by 2022 is the one which is one

of the most important priority of our PM Shri Narendra Modi.
An important constituent of this is low cost housing. To
commemorate the seventy five year’s of India’s independence,
housing for all by 2022 initiative has been taken. Under this
initiative. 305 cities have been identified in nine states where
there is a target to build two crore houses for poor in urban
area.

To develop a low cost housing project, critical requirement is

to have a low cost land, as this is the major portion of the
overall project cost. Anantraj has a low cost land portfolio and
this provide them with an edge over other developers in this
emerging opportunity. The company is one of the few ones to
have completed and delivered a low cost homes. It has
delivered 2600 low cost homes at AASHRAY at Neemrana,
Rajasthan.

Thus company is well poised to exploit this opportunity as it

has low cost land, excellent execution capabilities, and
sufficient experience and have completed a low cost project in
Anant Raj Estate – a – Valuable Asset
record time.
The marquee residential project of the company – Anantraj
Estate, located at 63A in Gurgaon, Haryana is spread over 160
acres. It has a developable area of 6 million Sq Ft,
approximately. This has scope of potential monetization of up
to Rs 5000 Crore to Rs 6000 Crore within four to five years. Till
recently, the company had only developed 65 acres of the total
160 acres in this project. The execution work at Anant Raj
estate is in the full swing.
 Points to Consider

Commercial Real Estate has shower good traction

This segment of the business has shown good traction as the

investment and business sentiment has improved in recent times.
This has resulted in an improvement in commercial office space
demand. Again there was a noticeable decline in new launches.
Thus quality commercial real estate is in short supply.

In recent times absorption of commercial real estate has increased

in all the major important cities of the country. These has resulted
in an increase in the lease rentals.

The rising demand of commercial real estate space has created an

excellent opportunity for the company. The company has over 5.5
million Sq ft of high quality ready for fit-out office space in NCR.
This is one of the largest commercial ready real estate.

Again, the most exciting part is that the entre commercial real
estate portfolio is completely paid for. This means that there is no
fresh fund required to unlock its value.

A new sales team with clear focus on leasing out commercial real
estate is put on place. Their focus is to pursue new clients in IT/ITES,
e-commerce, manufacturing sector etc for renting out commercial
space. They will be in constant with rental market, with their ears on
the ground, such that this portfolio is leased out to prime clients at
the best rates.

All these should yield an estimated incremental rental income of Rs

50 Crore on a conservative basis.
 Points to Consider

Focused development

The company has focused development in National Capital

Region. This has enabled it to gain in depth insights and
knowledge of the region. It is one of the few companies, which
have detailed information regarding the demographics,
emerging consumer trends and key growth locations that can
provide sufficient capital appreciation to consumers.
Large hotel plots

It is the largest land owner for the hotel and hospitality plots in
NCR with 14-15 prime land parcels.

These projects are expected to get additional area for the

development of commercial space, club, service apartments, hotel
rooms etc. under the new norms that are incorporated in the
master plan. This will help the company to grow its revenue,
substantially in future.

However, company is very clear that while it will develop these

hotels, they will either lease or sell the same to hotel chains but will
never involve themselves in to day to day management of the
company.

No more CAPEX needed

The biggest strength of the company is that it does not need any
more capital expenditure. The funds are required only for
execution and these are linked to sales. This will help the
company not to increase debt and falling interest rates can make
debt servicing easier.
 Technical Overview

Daily chart on Anant Raj depicts that the prices are on

uptrend, however, nominal correction on back of profit
booking can not be ruled out. Such profit booking may drift
prices lower to the key support level of 64- 62.00 mark.

Any decline to test the aforesaid mark of 64-62 band will

offer an entry opportunity for the bargain hunters as this
level was an important resistance and is now working as
support – as shown in the given chart. There are high
chances that prices may rebound from this level.

RSI on daily frame witnessed divergence and this may lead to

near term correction in prices. However, by indentifying the
overall trend we expect the correction to be nominal and such
correction should be used as buying opportunity.

On the weekly time frame, price resistance exists around 82

level and price sustaining above this will lead to the next
resistance which is placed at 96 mark.

If prices break the level of 96 on weekly closing basis, we

may see sharp rally in the scrip to make it reach 104 and
115 mark, depending on the demand pressure.

On the downside, support mark is placed at 62-64, which is a

buying zone. If prices fail to rebound and break this level due
to supply pressure, then the next support will come around 50
mark. But this does 62-64 band is difficult to be broken.
 Financials

Key Highlights – Anant Raj Limited

Profitability – Anant Raj Limited Liquidity – Anant Raj Limited

 Financials

P/L Account – Anant Raj Limited

 Financials
Balance Sheet – Anant Raj Limited

Source: Bloomberg & www.anantrajlimited.com – Annual Report

 Valuation

The stock is currently trading at a price to book of 0.48 which is quite underpriced. Again, the current
market cap is around Rs 2,000 Crore. The company has a debt of Rs 1400 Crore. Thus its enterprise
value stands at Rs 3400 Crore.

Again this company has portfolio real estate assets which could easily fetch Rs 10,000 Crore, even in
tight market conditions. In a better market conditions and with the way company is moving it could
even generate Rs 15,000 to 17,000 crore over a period of time.

Thus we recommend to buy the stock of Anantraj at a price of 67 with the target of 96.