Anant Raj Stock Faces Sharp Decline: What Lies Ahead in the Three-Year View?
Shares of real estate development firm Anant Raj have experienced a substantial downturn in recent months, falling sharply from their 52-week peak. The stock has retreated from highs of ₹744 to current levels around ₹541, marking a significant correction that has captured investor attention.
Budget Boost and Renewed Focus on Data Centers
The Union Budget 2026 has provided a favorable push to data center stocks, bringing Anant Raj into the spotlight. The company, which has been operational since 1969 and is headquartered in New Delhi, has traditionally focused on residential townships, commercial properties, IT parks, hospitality projects, and malls. However, its increasing emphasis on data centers represents a strategic shift that aligns with government initiatives.
The 2026 budget introduced a tax holiday extending until 2047 for global cloud services operating from Indian data centers. This policy development creates a supportive environment for companies like Anant Raj that are expanding their data center footprint.
Strong Financial Performance and Growth Metrics
Anant Raj has demonstrated impressive financial metrics over recent years. The company has reported three-year compounded sales growth of 64.6%, while net profit growth during the same period reached 105.7%. For the third quarter of fiscal year 2026, revenues stood at ₹641.6 crore, representing a 20% year-over-year increase.
Ebitda margins for Q3FY26 improved to 28.55%, up 229 basis points from 26.27% in the previous year. Net profit grew 30.68% year-over-year to ₹144.23 crore, indicating sustained profitability despite market volatility.
Expansion in Data Center Operations
Anant Raj is advancing aggressively with its data center plans. The company recently operationalized its second data center facility in Panchkula, featuring a capacity of 7 MW IT load. Additionally, the Manesar facility has been upgraded to a 21 MW IT load capacity.
The company plans to invest ₹45 billion in Andhra Pradesh to develop a data center, IT park, and cloud services complex with a total planned capacity of 50 MW IT load. With a target of reaching 307 MW capacity by 2032, data center operations are projected to become increasingly significant to the company's revenue stream.
Currently, revenue from data center, infrastructure, and allied services stands at ₹102 crore, which remains relatively small within the overall business context but shows substantial growth potential.
Real Estate Business Expansion
Beyond data centers, Anant Raj continues to expand its core real estate operations. The company is progressing with several key projects:
- The Estate One (Group Housing 2 project) in Gurugram spanning over 5.09 acres is on track for launch in Q4 FY26
- Phase IV of the Anant Raj Estate with an additional project area of 6.075 acres has commenced
- Another Group Housing project covering over 6.39 acres is progressing as scheduled and expected to receive permissions in Q4 FY26
The company possesses approximately 83 acres of low-cost land, which is expected to drive continued growth in the real estate segment.
Key Financial Strengths and Risk Factors
Anant Raj has successfully reduced its debt substantially over recent years, bringing it down from ₹1,494 crore in FY21 to ₹500 crore in FY25. This deleveraging strengthens the company's financial position and provides greater flexibility for future investments.
However, several factors warrant careful consideration:
- Valuation Metrics: The stock currently trades at a price-to-earnings ratio of approximately 36 and a price-to-book value of 3.4, which some investors may consider elevated
- Execution Challenges: Data center expansion is capital-intensive and could temporarily strain cash flows while delaying profits from new assets
- Project Risks: Execution delays or cost overruns in real estate or infrastructure projects present potential challenges
Three-Year Outlook and Investment Considerations
Looking ahead to the next three years, Anant Raj appears positioned for growth across multiple segments. The combination of a substantial low-cost land bank, expanding data center operations, and continued real estate development creates multiple growth drivers.
The tax holiday for data centers until 2047 provides a favorable regulatory environment, while the company's debt reduction enhances financial stability. However, effective execution across both real estate and data center projects will remain critical to realizing growth potential.
Investors should evaluate the company's fundamentals, corporate governance practices, and current valuations as key factors when conducting due diligence. Monitoring quarterly results, project execution timelines, and industry developments will provide ongoing insights into the company's trajectory.
This analysis examines the current position and future prospects of Anant Raj but does not constitute investment advice. Investors should conduct their own research and consult with financial advisors before making investment decisions.
