Recommendation from Construction Sector

ANANT RAJ LIMITED.:REAL GROWTH IN REALTY

HERE IS WHY
✓Strong financial position
✓Contributing to India’s real estate growth story
✓A potential turnaround

After a downturn for many years we are witnessing an upturn in the real estate cycle.This is expected to continue for a few more years as consumption is showing a healthy uptick reflected in marked pick up in retail (malls), hospitality and residential sales volume. One real estate company that will benefit from this upward spiral is Anant Raj Limited. With a vast land bank and as one of India’s premier infrastructure development firms, the company is reinventing corporate spaces through the establishment of special economic zones and IT parks.

More than 20 million square feet of real estate projects have been completed by the company in the housing, commercial, IT parks, shopping malls, hotel, residential and affordable housing sub-segments. The company reported net sales of Rs462 crore in FY22, up from Rs250 crore in FY21. This is an almost 85 per cent increase. In FY22, increasing transactions in both the residential and commercial categories drove the rise.

EBIDTA was Rs76 crore in FY22, up from Rs35 crore the previous year. That represents an increase of more than 117 per cent, reflecting the impact of its low debt and low capital expansion approach.

Since fiscal year 2018, the company has regularly reduced its debt. In addition, its PAT grew four-fold from Rs11 crore in FY21 to Rs55 crore in FY22. The company’s cash conversion cycle has been reduced from 64 days in FY21 to 17 days in FY22, which helped it to lower its net working capital and reduce the interest burden. It also saw a 405 per cent increase in cash flows from operations, rising from a negative operating cash flow of Rs150 crore in FY21 to Rs458 crore in FY22. Net sales for the quarter ended March 2022 were Rs216 crore. This reflects a massive growth of 123 per cent on a QoQ basis and an increase of 88 per cent YoY. Its EBITDA excluding other income was Rs25 crore in FY22, representing a 9 per cent rise on a QoQ basis and a roughly 19 per cent increase YoY. Looking at its net profit, it stood at Rs23 crore, a 123 per cent increase on a QoQ basis and a 188 per cent increase on a YoY basis. Indian real estate players anticipate strong demand for houses in 2022 and the near future. With consistent performance and speedy recovery, the real estate sector has re-established buyer and investor confidence and accelerated the growth momentum.

According to the most recent CREDAI data, housing prices in Delhi NCR have climbed by 43 per cent since the pandemic began in 2020 and commercial prices in Delhi NCR have increased by roughly 11 per cent year on year. Anant Raj Limited is a prominent real estate developer in the NCR. This firm also claims to be a pioneer in the affordable housing category, having recently received a project from Andhra Pradesh Industrial Infrastructure Corporation to develop and build 2,000 affordable homes in Tirupati.

The Indian real estate sector is anticipated to be worth USD 1 trillion by 2030, up from USD 200 billion in 2021 and will contribute 13 per cent of the country’s GDP by 2025. Retail, hotel and commercial real estate are also expanding rapidly, thus supplying the much-needed infrastructure for India’s expanding requirements. Anant Raj Limited being one of the prominent players in the sector is likely to benefit from such developments. On account of all such factors, we advise our readerinvestors to BUY this stock.