Anant Raj Nuvama

Long Term Recommendation
Anant Raj
Stepping on the gas pedal
Combined impact of cyclical upturn in the residential sector, all time low inventory and well-located
land bank is expected to drive strong sales volume growth together with pricing power for Anant Raj CMP: INR248
Ltd (ARCP).
Rating: BUY
We initiate coverage on ARCP with a ‘BUY’ and a SoTP-based TP of INR302, implying an upside of 22% Target price: INR302
from the CMP. Our optimism is driven by:
Upside: 22%
i) A 77% CAGR (FY23-26E) in pre-sales to INR4,150cr in FY26E on a significant scale up in launch
pipeline (5.7mn sq. ft. in FY24 and FY25). Date: November 9, 2023
ii) Investment in high-growth data centre space to create a new stream of revenue, we expect
annuity of INR259cr from the 21MW capacity planned in 1st phase by FY27E.
iii) A 76% CAGR in operating cash flows over FY23-26E on strong collections and scale up in annuity
income, which will support capex requirement for data centres. We expect net debt-to-equity Bloomberg: ARCP:IN
ratio to decline from 0.37x in FY23 to -0.11x in FY26E.
52-week
Cyclical upswing in Gurugram’s residential real estate market 88/253
Gurugram is the largest residential real estate market in Delhi-NCR, contributing ~52% of total area range (INR):
absorbed. The upswing in the sector began in FY19/20 and post COVID, the market saw a significant
Share in issue (cr): 32.4
surge in demand on i) increased preference for ownership, ii) requirement of a larger space suiting work-
from-home lifestyle, iii) deployment of household savings in real estate and iv) correction in prices. In
M-cap (INR cr): 7,984
FY23, Gurugram was the best performing market, with absorption growing 95% YoY (pan India
absorption growth of 30.3%). Supply grew 188% YoY on a low base, but lagged absorption, leading to Promoter holding (%) 63.31
inventory declining to an all-time low of ~7 months in Mar 2023. We expect the demand momentum to
continue on i) strong consumer sentiment, ii) increasing preference for branded inventory, and iii) a
continuing shift of commercial centres from Delhi to Gurugram. Record low inventory levels and
constrained supply is expected to drive price appreciation. With more than 170 acres of land bank 700
located in Sector 63A of Gurugram, ARCP is expected to be one of the key beneficiaries of the robust 600
demand. 500
Indexed
400
Scaling up launches to capitalize on the resurgent demand 300
ARCP has planned multiple launches across product categories such as plotted development, group 200
housing, villas and independent floors over ~140 acres of licenced developable land in Sector 63A, 100
0
Gurugram. As of September 2023, it has ~2.26mn sq. ft. under development with unsold inventory of
Oct-20
Apr-19
Oct-19
Apr-20
Apr-21
Oct-21
Apr-22
Oct-22
Apr-23
Oct-23
Jan-19
Jul-19
Jan-20
Jul-20
Jan-21
Jul-21
Jan-22
Jul-22
Jan-23
Jul-23
0.65mn sq. ft. (GDV - ~INR818cr). It has planned to launch another 5.46mn sq. ft. over FY24 and FY25
with a GDV of INR7,974cr. Post these developments, ARCP will still be left with ~30 acres of land. Apart
from Sector 63A, it has land parcels of ~83 acres spread across Delhi and Haryana, for which it is yet to Sensex Anant Raj
finalize development plans. Over FY23-26E, we expect ARCP’s pre-sales to deliver a 77% CAGR, from
INR748cr to INR4,150cr.
Foray into high-growth high-yield data centre segment
JLL anticipates an addition of 678MW to the digital transformation industry over 2023–25 on i) rising
data consumption trends, and ii) preference for data localization post implementation of Digital Personal
Data Protection Bill in June 2024, taking the industry capacity to 1,456MW. Delhi-NCR is expected to get
11% of the incremental supply, with capacity addition of ~80MW over 2023-25. Hyperscalers will be the
key end-users, followed by the Government and corporates. To capitalize on the growing demand, ARCP
has made aggressive plans to develop a capacity of 300MW over 7-8 years. In the 1st phase, it has
planned a capacity of 21MW, to be delivered by Q1FY25. By FY25-end, it plans to take the capacity to
50MW. We are considering only the 1st phase in our estimate and see an annuity of INR259cr from the
planned 21MW by FY27E.
Ramp up in pre-sales, expansion of annuity portfolio to drive 60% CAGR OCF and fund capex
requirement
Led by consistent launches, healthy pre-sales and strong growth in annuity income, we expect ARCP to
generate OCF of INR641cr in FY26E from INR117cr in FY23, a 76% CAGR. Strong OCF will fund the capex
requirement of its annuity and data centre assets and we do not see it taking any additional long term
debt. We foresee a net D/E ratio of -0.11x in FY26E against 0.37x in FY23.
We initiate coverage on ARCP with a BUY rating and SoTP-based TP of INR302
We value the residential real estate, data centres and commercial annuity portfolio at NAV and use
EV/EBITDA multiple to value hospitality assets. Residential/data centres/commercial/hospitality
segments make up for 71%/17%/10%/1% of the enterprise fair value.
Key financials
Year to March (INR cr) FY22 FY23 FY24E FY25E FY26E
Revenue 462 957 1,267 1,657 2,533
EBITDA Margin 16% 21% 31% 42% 41%
Pre-sales value 386 748 1,288 3,737 4,150 Amit Agarwal
Operating cash flow 231 117 636 801 641 [email protected]
OCF per share (INR) 7.8 3.6 19.6 24.7 19.8 Rishith Shah
Net Debt 1,252 1,035 889 130 (470) [email protected]
Net-Debt/Equity (x) 0.47 0.37 0.29 0.04 (0.11)
Nuvama Group has two independent equity research groups: Institutional Equities and Professional Clients Group. This report has been prepared by the Professional Clients Group. 1
Anant Raj
Table of contents
Business structure .................................................................................................................................................... 3
Valuation .................................................................................................................................................................. 4
Sensitivity analysis ................................................................................................................................................... 8
Valuation methodology ........................................................................................................................................... 8
Investment rationale
I. Cyclical upswing in the residential real estate market of Gurugram .................................................................... 11
II. Scaling up launches to capitalise on the resurgent demand................................................................................ 13
III. Betting big on data centres, a high-growth, high-yield real estate opportunity................................................. 20
IV. Steadily growing commercial annuity portfolio .................................................................................................. 24
V. Pre-sales growth, scale up of rentals from data centres to drive 76% CAGR in OCF ........................................... 25
VI. Internal accruals to fund investment in data centres, net debt to decline ........................................................ 26
Key risks ................................................................................................................................................................... 26
Company overview .................................................................................................................................................. 27
Financials.................................................................................................................................................................. 28
Anant Raj
Business structure
Established in 1969, ARCP was a prominent EPC player in Delhi-NCR for the first 30 years of its operations, where it executed construction and civil
contracts for the Government. Currently, the company owns more than 300 acres of land parcels, of which more than 75% is concentrated in Sector
63A, Gurgaon. The balance is spread across multiple locations in Delhi and Haryana. Till date, ARCP has delivered more than 20mn sq. ft. of residential
projects, utilising ~60 acres of the land bank. Over the remaining land parcels, it has ongoing developments of ~2.4mn sq. ft. and plans to add another
~5.5mn sq. ft. in the near term. The projects are a balanced mix of group housing, plots, independent floors and commercial buildings, catering to
premium and above categories. The company also has a comprehensive annuity portfolio where it owns and operates office and hospitality assets
and is foraying into high growth data centre segment with plans to develop a load handling capacity of 300MW over 7-8 years (3MW commissioned
and 3MW to be commissioned by December 2023).
We expect ARCP’s pre-sales to increase to INR4,150cr in FY26E from INR748cr in FY23, a CAGR of 77%, on:
i) Significant scale up in launch pipeline, we expect launches of 2.7/2.8mn sq. ft in H2FY24E/FY25E.
ii) Cyclical upswing in Gurugram market on strong demand (H1FY24 absorption up 75% YoY), record low inventory levels (5.2 months as of
September 2023) and increased preference for quality and branded inventory.
iii) A strong growth in average realisation over FY23-26E on improving product mix and price appreciation in Gurugram market.
In the leasing segment, ARCP has planned development of ~1.65mn sq. ft. of mix use asset containing hotels, service apartment and office space,
which will drive significant scale up in revenues.
The new vertical of data centres is expected to contribute meaningfully from FY26E onwards as capacity of ~21MW becomes operational. While
management has guided at capacity of ~50MW and ~100MW by the end of FY25E and FY26E, we are considering only the first phase of 21MW in our
estimates. We expect revenue from data centres to grow to INR201cr in FY26E, from INR 2cr in H1FY23.
Driven by strong growth in pre-sales with expansion of leasing and data centre portfolio, we expect ARCP’s operating cash flow to grow at 76% CAGR
over FY23-26E. While a large part of the OCF would be deployed towards capex for Data Centres, we do not expect the company to take on additional
long-term debt and see improvement in gearing. We expect net debt-to-equity ratio improving to -0.11x in FY26E from 0.37x in FY23.
We are optimistic on ARCP’s growth story owing to i) cyclical upswing in Delhi-NCR’s residential real estate market, ii) increasing preference for quality
branded inventory across products, iii) significant expansion in ARCP’s launch pipeline and pre-sales growth, iv) multi-fold expansion in annuity
portfolio, v) investment in high-growth data centre segment and vi) improving cash flows and balance sheet strength. We initiate a ‘BUY’ on ARCP
with a price target of INR302, valuing the business at 1xFY24E NAV.
We expect pre-sales in residential real estate Revenue from annuity portfolio to expand at Led by improving product mix, growth
segment to grow at 77% CAGR over FY23-26E 118% CAGR over FY23-26E on in annuity income and low
to INR4,150cr on: development cost, we expect EBITDA
i) Foray into data centres (phase 1 -
margins to expand to 41% in FY26E
i) Aggressive monetisation of land bank; 21MW)
from 21% in FY23. OCF to grow at 76%
Scale up in launches, 5.5mn sq. ft. to be ii) Expansion of commercial and mix use
properties CAGR, aiding capex requirements for
launched in H1FY24 and FY25
ii) Cyclical upswing in Gurugram market iii) Planned expansion of ~0.2mn sq. ft. data centres. Net D/E ratio to improve
iii) Robust growth in average realisation hotel premises to ~1.65mn sq. ft. mix use to -0.11x in FY26 from 0.37x in FY23 on
property (not included in estimates) healthy FCF. RoACE to expand to 23%
from 5% over FY23–26E
INR cr FY23 FY24E FY25E FY26E INR cr FY23 FY24E FY25E FY26E FY26E Target
Pre-sales
0.62 1.14 2.54 2.22 RoACE (%) 5% 9% 16% 23% EV/EBITDA ratio (x) 7.2 302
(mn sq. ft.)
Pre-sales (cr) 748 1,288 3,737 4,150 OCF 117 636 801 641 NAV (INR cr) 9,774
Net D/E ratio
Revenue (cr) 957 1,267 1,657 2,533 0.37 0.29 0.04 (0.11)
(x)
EBITDA
21% 31% 42% 41%
margin (%)
PT of INR302 based on 1xFY24E

Pre-sales/EBITDA CAGR of 77%/74%  FY26E RoACE/RoAE of 23%/19% 
NAV
Upside: 22%
Anant Raj
Valuation
Summary
We initiate coverage on ARCP with a ‘BUY’ rating and a SoTP-based price target of INR302. ARCP is one of the largest landowners
in Delhi-NCR with a land bank of over 250 acres, spread across up-and-coming locations in Gurugram and Delhi. We expect a
significant scale up in ARCP’s pre-sales on i) a strong launch pipeline of over 5.5mn sq. ft. over next 18 months on a land bank
which is owned and fully paid for, ii) cyclical uptick in Delhi-NCR’s residential real estate market on growing demand and record
low inventory levels, iii) increasing preference for branded premium products, and iv) increase in average realisations per sq. ft.
on constrained supply in the industry coupled with ARCP’s improving product mix. Over FY23-26E, we expect ARCP’s pre-sales to
grow at a CAGR of 77%, to INR4,150cr. We also see a significant surge in annuity income, led by, i) its foray into the data centre
space where it plans to build and lease 21MW of IT load handing capacity in the first phase (by Q1FY25), and ii) steady growth in
rentals in the current commercial annuity portfolio. ARCP is also planning an expansion of leasable area by ~1.55mn sq. ft. at its
commercial assets of Anant Raj Centre and Stellar resorts land parcel, which we have not considered in our estimates. We expect
rental income to expand from INR31cr in FY23 to INR317cr in FY26E, a CAGR of 118%.
We see a meaningful de-leveraging from FY26E onwards as i) we believe the business will generate enough OCF to fund capex
requirement of data centres during FY24 and FY25, ii) business will start generating free cash flows from FY26E as data centres
start contributing meaningfully. We see net debt to equity ratio declining to -0.11x in FY26E from 0.37x in FY23.
ARCP’s stock saw a significant run up in the last one year and has sharply outperformed NIFTY and NIFTY Realty index due to i)
strong residential sales momentum with favorable demand supply scenario ii) all time low inventory in Gurugram (5.2 months as
of September 2023), iii) improving cash flow visibility, and iv) entry into data centres. Given the strong growth in residential sales
we expect the outperformance to continue.
700 Exhibit 1: 5-year stock performance

600
500
Indexed
400
300
200
100
0
Jan-19
Mar-19
May-19
Jul-19
Nov-19
Jan-20
Mar-20
May-20
Jul-20
Nov-20
Jan-21
Mar-21
May-21
Jul-21
Nov-21
Jan-22
Mar-22
May-22
Jul-22
Nov-22
Jan-23
Mar-23
May-23
Jul-23
Nov-23
Sep-19
Sep-20
Sep-21
Sep-22
Sep-23
Sensex Nifty Realty ARCP
Source: BSE, NSE, Nuvama Wealth Research
Exhibit 2: 1-year stock performance

300
250
200
Indexed
150
100
50
0
Oct-22
Oct-22
Oct-22
Nov-22
Nov-22
Dec-22
Oct-23
Oct-23
Oct-23
Dec-22
Jan-23
Jan-23
Mar-23
Mar-23
Apr-23
Apr-23
May-23
May-23
May-23
Jun-23
Jul-23
Jul-23
Feb-23
Feb-23
Jun-23
Aug-23
Aug-23
Sep-23
Sep-23
Sensex Nifty Realty ARCP
Source: BSE, NSE, Nuvama Wealth Research
Anant Raj
Valuation
We arrived at the price target of INR302 for ARCP, which is based on SoTP valuation methodology. We valued the company’s
residential real estate segment, data centres and commercial assets at 1xFY24E NAV. The hospitality assets have been valued at
12xFY24E EV/EBITDA. The valuation and the methodology behind the same have been explained in detail below.
Exhibit 3: Valuation summary

Particulars (INR cr) NAV NAV/sh Basis
Residential 7,591 234 1x FY24 NAV
- Sector 63A 6,878 212
- Others 713 22
Data Centre 1,851 57 1x FY24NAV
Commercial Leasing 1,034 32 1x FY24NAV
Hotels 156 5 12x EV/EBITDA
Enterprise Value 10,632 328
Net Debt 889 27
Minority interest -31 -1
Fair value 9,774 302
CMP 7,984 248
Upside 22%
Source: Company, Nuvama Wealth Research
Residential real estate

We value ARCP’s residential real estate portfolio at the net asset value of inventory in ongoing and completed projects and
estimated value of planned developments. ARCP has a very limited unsold inventory in completed projects. In the ongoing
projects, it has an unsold inventory of ~0.65mn sq. ft. (ARCP share - 0.37mn sq. ft.) with an expected saleable value of INR818cr
(ARCP share – INR582cr). Over the next 18 months, it has planned launches of ~5.84mn sq. ft. (ARCP’s share – 5.46mn sq. ft.),
which we expect to be booked by FY27E. We expect a booking value of INR7,974cr (ARCP’s share) in these planned projects. As
per our assumptions and estimates, we arrive at FY24 NAV of INR7,591cr for residential portfolio. In our assumptions, we have
not considered the future development potential of the unused land bank of ~83 acres in Delhi and Haryana.
Exhibit 4: Estimated NAV of ongoing projects

Estimated
ARCP’s Saleable Area Inventory
Project Type Saleable value NAV (INR cr)
share (mn sq. ft.) (mn sq. ft.)
(INR cr) *
Anant Raj Estate
- Estate Plots Plots 100% 0.28 0.14 230 145
- Estate Villas Villas 100% 0.09 0.05 56 51
Ashok Estate
- Ashok Estate Plots Plots 100% 0.51 0.1 203 383
Birla Navya
Birla Navya (Phase I, II, and III) GHS 50% 1.02 - - -
Joy Square Commercial 28% 0.37 0.37 329 67
Total 646
*Estimated saleable value is as per the current expected realisation; Source: Company, Nuvama Wealth Research
Anant Raj
Exhibit 5: Estimated NAV of forthcoming projects
Estimated
ARCP’s Saleable area
Project Type GDV NAV (INR cr)
share (mn sq. ft.)
(INR cr)*
Anant Raj Estate
- Estate residences (Phase I & II) GHS 100% 2.10 3,900 2,057
- Estate floors Independent floors 100% 0.37 594 450
- Estate plots Plots 100% 0.99 1,626 1,133
Ashok Estate
- Ashok Estate Plots Plots 100% 0.37 738 539
Birla Navya
- Birla Navya (Phase IV) GHS 50% 0.80 1,536 372
Affordable housing - Tirupati
- Anant Raj Ashray (Phase II) GHS 100% 1.22 330 87
Others
- Commercial projects Commercial 100% 0.20 420 176
Total 4,814
Estimated GDV is as per the current expected realisation; Source: Company, Nuvama Wealth Research
Exhibit 6: Expected NAV of the fully paid land bank

Developable area Estimated GDV Estimated NAV
Land bank location Land Area
(mn sq. ft.) (INR cr) * (INR cr)
Sector 63A, Gurugram 30 2.29 4,002 2,198

Estimated GDV is as per the current expected realisation; Source: Company, Nuvama Wealth Research
Data Centres
ARCP owns 3 commercial assets at Manesar (Haryana), Rai (Haryana) and Panchkula (Chandigarh). Except for Panchkula, where
offices occupy ~0.65mn sq. ft. on lease, the others are vacant. ARCP plans to retrofit and remodel the vacant assets and convert
them into fully functional data centres with an IT load handling capacity of 150MW (Manesar – 50MW; Rai – 100MW). At
Panchkula, it intends to add a building with an area of 0.6mn sq. ft. on a fully owned 5.25acre vacant land parcel, where it will
house another 50MW. As of September 2023, ARCP has commissioned a capacity of 3MW (leased to RailTel Corporation of India)
at Manesar, and plans to commission another 3MW (pre-leased Telecommunications Consultants India Ltd) to in December 2023.
It plans to add another 15MW by Q1FY25, taking the total capacity of the 1st phase to 21MW.
In the 2nd phase, it plans to add another 29MW at Manesar, which will take total capacity to 50MW by FY25-end. Further
development and leasing will depend on the demand and response to the Manesar asset. We have been conservative in our
assumptions and have valued only 21MW of Data centres which are under development.
Exhibit 7: Expected NAV of data centres

IT load Average Steady Estimated
Leasable Steady Estimated
handling monthly state cost of Estimated
Asset Location area (mn state opex NAV (INR
capacity rental/MW annuity construction cap rate
sq. ft.) (INR cr)* cr)
(MW) (INR cr) (INR cr)* (INR cr)
Manesar, Haryana 1.8 21 0.9 222 38 546 8% 1,851
*Considering optimum utilisation at current rental and opex/MW; Source: Company, Nuvama Wealth Research
Anant Raj
Commercial Leasing
ARCP operates a 0.65mn sq. ft. Grade A commercial asset in Panchkula, Chandigarh, which is fully leased out. The property enjoys
monthly rental of ~INR90 per sq. ft. which we expect to grow at an average of 5% annually, in line with the industry. It also
operates a standalone mixed-use asset of 0.15mn sq. ft. in Gurugram which earns a monthly rental of ~INR90 per sq. ft. Put
together, these two assets generate an annuity income of INR91cr.
The company owns 3 hospitality assets, viz., Bel-LA Monde hotel (New Delhi – 0.1mn sq. ft.), Stellar Resorts (New Delhi – 0.1mn
sq. ft.) and Misaki Hotel (Manesar – 0.1mn sq. ft.), which are rented out to operators. The contracts are based on revenue sharing
but also have a minimum guarantee. As per the minimum guarantee clause, its Bel-LA Monde and Stellar resorts generate an
annual rental of ~INR14cr.
ARCP is planning to expand the Bel-LA Monde and Stellar Resorts assets to utilise the entire FSI available at these locations. The
assets are expected to be converted to mixed use developments consisting commercial, hospitality and retail offerings, with a
cumulative gross leasable area of 1.65mn sq. ft. (Bel-LA Monde asset – 0.7mn sq. ft.; Stellar resort asset – 0.95mn sq. ft.) which
would be leased out. The Bel-LA Monde property will be rebranded as Anant Raj Center. ARCP expects the commercial/hospitality
to be operational by H2FY25/H1FY27. Timeline for Stellar Resort property is not yet finalised. We have not considered the revised
revenue potential of these projects into our estimates.
Exhibit 8: Expected NAV of commercial leased assets

Steady state
Leasable Area (mn Leased Area (mn Average monthly
Commercial Asset annual rent (INR NAV (INR cr)
sq. ft.) sq. ft.) rental (INR/sq. ft.)
cr)
Panchkula, Chandigarh 0.65 0.65 95 74 841
Sector 44, Gurugram 0.15 0.15 95 17 194
Total 0.80 0.80 91 1,034
Exhibit 9: Expected fair value of hospitality assets

Annual
Leasable Area Leased Area Minimum Expected Target Fair Value (INR
Hospitality Asset
(mn sq. ft.) (mn sq. ft.) guarantee lease EBITDA (INR cr) EV/EBITDA (x) cr)
(INR cr)
Bel-LA Monde 0.10 0.10 5.6 5.2 10 51.6
Stellar Resorts 0.10 0.10 8.5 7.8 10 78.4
Total 130
Anant Raj
Sensitivity Analysis
Exhibit 10 shows the sensitivity of our valuation to our underlying key assumptions.
Exhibit 10: Sensitivity of valuation to key assumptions

NAV (% change)
10% increase in residential sale price 5.8
1% increase in sale inflation 3.1
1% increase in cost inflation -0.9
1% increase in sale and cost inflation 2.2
1% increase in discount rate -3
1% increase in capitalisation rate -2.4
Valuation Methodology
Residential operations - NAV calculation
We divided the residential land bank into i) under construction (2.26mn sq. ft.), ii) planned developments (5.84mn sq. ft.) and iii)
land bank (2.29mn sq. ft.).
• We classified ARCP’s entire land bank into key projects based on the information provided by the company.
• We arrived at the sale price (INR/sq ft) and the anticipated sales volume for each project based on our market assessment
and our interaction with the company.
• We assumed annual inflation rate of 8% for sales.
• We assumed annual inflation rate of 5% in costs.
• We deducted the construction cost from the sale price and derived our cost estimate after discussion with the company.
• We deducted marketing and other costs assuming they equate to 5% of sales.
• We deducted income tax at the applicable rate of 25.2%.
• We discounted the resultant cash flow based on WACC of 11.6%. Additionally, we added the NAV for all the projects and
development potential of the land bank to arrive at our NAV forecast of INR7,591cr for the company’s residential segment.
Data Centres - NAV calculation

In our valuation, we have valued only the 1st phase of planned development.
• We have considered a gradual ramp up in occupancy over FY25 and FY26 based on industry trends. We expect peak utilisation
of 98% by FY27.
• We arrived at the lease price (INR/sq. ft./month) based on our interaction with the company and market experts.
• We arrived at the operating cost (INR/sq. ft./month) based on our discussion with the company and operating cost incurred
in the existing capacity of 3MW.
• We multiplied the leasable area with the occupancy rate to get the occupied area. To arrive at the lease rental, we multiplied
the occupied area with the lease price (INR/sq ft/month).
• We assumed annual inflation rate of 5% for rent.
• We deducted depreciation from the lease rental to arrive at EBIT.
• We added back non-cash charges and deducted any capital expenditure incurred to arrive at the project cash flow.
• We assumed cap rate of 8% to arrive at the terminal value.
• We discounted the resultant cash flow based on WACC of 11.6% to arrive at our NAV forecast of INR1,851cr for the company’s
data centre segment.
Anant Raj
Commercial operations - NAV calculation

In our valuation, we have considered the currently operational assets of 0.8mn sq. ft.
• We have considered ARCP’s currently operational assets
• We arrived at the lease price (INR/sq ft/month) based on our interaction with the company and market experts.
• We excluded the common area maintenance (CAM) charge from our calculation.
• The assets are fully occupied as of date and we have assumed 100% occupancy going forward.
• We multiplied the leasable area with the occupancy rate to get the occupied area. To arrive at the lease rental, we multiplied
the occupied area with the lease price (INR/sq ft/month).
• We assumed annual inflation rate of 5% for rent.
• We deducted depreciation from the lease rental to arrive at EBIT.
• We added back non-cash charges and deducted any capital expenditure incurred to arrive at the project cash flow.
• We assumed cap rate of 8% to arrive at the terminal value.
• We discounted the resultant cash flow based on WACC of 11.6% to arrive at our NAV forecast of INR1,034cr for the company’s
commercial segment.
Hotel valuation – 12x EV/EBITDA FY24 multiple

In our valuation, we have considered two assets, viz., Bel-LA Monde and Stellar resorts.
• ARCP has 2 operational hotels, viz., Bel-LA Monde and Stellar resorts, located at Chhatrapur (New Delhi) and Rajokri (New
Delhi) respectively.
• We valued the current hotels by assigning a comparable multiple to the expected EBITDA of these assets.
• ARCP has a revenue sharing agreement with the hotel operator, but also has a minimum guaranteed annual lease in case of
a shortfall in revenue. We have considered the minimum guaranteed lease in our estimates
• We have considered an EBITDA margin of 92% to arrive at EBITDA.
• We assigned 12x FY24 EV/EBITDA multiple, which we believe is conservative given the sectoral tailwinds and premium location
of assets. We arrive at a fair value of INR156cr.
Anant Raj
WACC Calculation
The key assumptions of our NAV valuation are shown in Exhibit 10 below, wherein we rounded up our WACC assumption to
11.6%. We assumed debt-to-equity ratio of 0.2x based on the company’s existing capital structure
Exhibit 10: WACC calculation

Particulars
Pre tax cost of debt 13%
Tax rate 25.2%
Cost of debt 9.7%
Cost of equity
Risk free rate 6.5%
Beta 1.30
Market premium 4.3%
Cost of equity 12%
WACC 11.6%
Debt 0.19
Equity 0.81
Source: Bloomberg, Company, Nuvama Wealth Research
Exhibit 11: Other key assumptions for valuation

Particulars %
Sale price inflation 8%
Cost inflation 5%
Other costs (as % of sales) 5%
Tax Rate 25.2%
Capitalisation rate 8%
Source: Nuvama Wealth Research
Anant Raj
Investment Hypothesis
I. Cyclical upswing in the residential real estate market of Gurugram
Gurugram is the largest residential real estate market in Delhi-NCR, contributing nearly 52% of total area absorbed. Post cyclical
slowdown from FY14-19, the cycle has turned bullish with strong demand resurgence as evident from the Exhibit 12 below. We
expect that driven by strong demand trends, increased preference for luxury products, and a shift of commercial centres from
Delhi to Gurugram, residential real estate market in Gurugram is expected remain buoyant over the coming years. We note that
sharp decline in the inventory (in months sales) from peak of ~55 months to an all-time low of ~7 months in FY23 implying
continued sales and pricing power with developer.
Exhibit 12: Gurugram residential real estate market

45 60
40
50
35
30 40
25
30
20
15 20
10
10
5
- -
FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23
Absorption (mn sq. ft.) Supply (mn sq. ft.) Inventory (months to sell, RHS)
Source: Propequity, Nuvama Wealth Research
FY09-10 | Demand/supply growth – 45%/33%: During 2002-03, the markets saw an influx of liquidity as US switched to
quantitative easing in 2001 post 9/11 crisis to support its growth and economy. Also, during the same period, the impact of
globalisation started to make waves in India, with a large amount of foreign capital flowing into multiple sectors and segments,
which also included the real estate sector. Additionally, in 2005, the Department of Industrial Policy and Promotion (DIPP),
Government of India, replaced the integrated township policy to permit Foreign Direct Investment (FDI) up to 100% in the real
estate sector. As a product of these events, India saw a tremendous increase in FDIs in the real estate segment.
Exhibit 13: FDI trends - India
Exhibit 14: DI in Real Estate Sector (USD mn)
50 200%
6,000 25%
40 150% 5,000 20%
30 100% 4,000
15%
3,000
20 50% 10%
2,000
10 0% 5%
1,000
- -50% - 0%
2009
2000
2001
2002
2003
2004
2005
2006
2007
2008
2010
FY01
FY02
FY03
FY04
FY05
FY06
FY07
FY08
FY09
FY10
FY11
Inflows (USD in bn) % growth (RHS) FDI (USD in mn) As a % of total FDI (RHS)
Source: Data.gov.in, Nuvama Wealth Research
Anant Raj
The period also saw increasing interest from global IT/ITeS firms for setting up their back-end support to India, which primarily
drove demand for commercial real estate in metro cities. BFSI, manufacturing and other allied segments also saw growth on an
overall improvement in economy, which drove growth in employment. Given the increasing job opportunities, the period saw a
significant surge in urbanisation, driving demand for residential real estate in urban centres such as Delhi-NCR, Mumbai and
Bengaluru.
While demand surged sharply, supply was slow to catch up, driving price appreciation. All in all, barring the one-year glitch in
2008 on account of the sub-prime crisis, the sector was in a bull phase for the better part of the decade.
FY11-21 | Demand/supply CAGR – (9%)/(12%): Driven by the attractiveness of the cycle and supported by the available liquidity,
real estate market in Gurugram started seeing a rapid surge in supply from FY11 onwards. Supply exceeded demand by a margin
over FY11-13, which led to ballooning of inventory, to ~37 months in FY14 from only ~12 months in FY11. Over FY11-13, despite
strong supply, prices remained strong on healthy demand. Prices grew at a CAGR of ~36% over this period.
Combined impact of cyclical slowdown, high inventory, implementation of RERA, demonetisation, the demand declined sharply
leading to rise in inventory levels to 57 months in FY17 despite low relatively low supply during FY14-18. Post FY19, we have seen
a revival of demand with the cyclical upswing in the residential sector. Supply lagged demand during FY15-21 and inventory levels
slipped to ~23 months in FY21.
Though the sales were impacted during Covid, we have seen a very strong growth in sales with continued demand growth and
historically low inventory.
Exhibit 15:Average prices clock ~36% CAGR over FY11–13 on strong demand
9,000 25%
8,000 20%
7,000
15%
6,000
5,000 10%
4,000 5%
3,000
0%
2,000
1,000 -5%
- -10%
Q1FY11
Q2FY11
Q3FY11
Q4FY11
Q1FY12
Q2FY12
Q3FY12
Q4FY12
Q1FY13
Q2FY13
Q3FY13
Q4FY13
Source: PropEquity, Nuvama Wealth Research
FY22-23 | Demand/suppy CAGR – 75%/157%: In line with the other markets in India, Gurugram saw a significant recovery in
demand post-COVID on i) increased preference for owning a house, ii) requirement of a larger living space to accommodate work-
from-home/hybrid work lifestyle, iii) deployment of household savings in real estate and iv) correction in prices. Supply also saw
a sharp recovery in FY22, however, continuing to lag demand. Demand/supply grew 58%/130% YoY in FY22. Inventory levels
declined to the lowest since FY11, to ~12 months.
In FY23, Gurugram posted one of its best performances, with the growth in absorption being the highest among the top seven
cities. Absorption grew 95% YoY against a pan India absorption growth of 30.3%. On a lower base, supply saw a sharp growth, up
188% YoY. Inventory plunged further, to an all-time low of ~7 months in FY23. Driven by strong consumer sentiment, increasing
preference for gated community and branded plotted development and a continuing shift of commercial centres from Delhi to
Gurugram, demand is expected to stay robust ahead. We expect an improvement in prices on robust demand, record low
inventories and an increasing preference for branded developments and luxury products. We expect the Gurugram residential
real estate to remain buoyant over the next 4-5 years.
Anant Raj
II. Scaling up launches to capitalise on resurgent demand
Land bank in Sector 63A, Gurugram/rest of Delhi-NCR — ~237 acres/~83 acres

ARCP has an early mover advantage in the NCR real estate market as it started acquiring significant and contiguous land parcels
since 2000. It has amassed ~230 acres in Gurugram and ~80 acres in regions such as Najafgarh and Mehrauli in Delhi.
Sector 63A, Gurugram

Its land parcel in Gurugram is located in Sector 63A. Of the ~230 acres, it has developed and sold nearly 60 acres of residential,
commercial, and mix-use projects. Nearly 140 acres are either under development or planned to be developed over the next
seven-to-eight years. These developments will have a saleable area of ~8mn. sq. ft., with an estimated value of ~INR12,000cr. The
balance parcels are yet to be licenced for development purposes. ARCP will convert these as and when it requires.
Exhibit 16: Land bank at Sector 63A, Gurugram
Land bank
~237 acres
Under
Developed/sold development/ Unused land bank
planned
~60 acres ~147 acres ~30 acres
Anant Raj Estate Ashok Estate Birla Navya Others
~50 acres ~20 acres ~47 acres ~8 acres

Anant Raj Estate Ashok Estate Birla Navya Future Development Social Infrastructure
Anant Raj
Sector 63A – a seamlessly connected, plush green residential locality
Sector 63A lies almost equidistant from Sohna Road and the Golf Course Extension Road. Known for the numerous sports grounds
in its vicinity, Sector 63A is a premium residential sub-section. With Golf Course Extension Road close by, connectivity with
commercial centres and the Cyber Hub is seamless. Delhi Railway Station/Indira Gandhi International Airport are located
45km/25km away. Sohna Road has provided a direct link to NH48. Leading schools and hospitals are also situated nearby.
The locality saw a sharp appreciation in prices after the lifting of COVID-related restrictions owing to the strong comeback in
demand, improving accessibility, and launch of numerous premium and luxury properties in and around the sector. As per
magicbricks.com, average prices appreciated by 14.9% YoY in Q2FY24.
Exhibit 17: Average prices (INR/sq. ft.)

16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
-
Q3FY20
Q4FY20
Q1FY21
Q2FY21
Q3FY21
Q4FY21
Q1FY22
Q2FY22
Q3FY22
Q4FY22
Q1FY23
Q2FY23
Q3FY23
Q4FY23
Q1FY24
Q2FY24
Source: magicbricks.com, Nuvama Wealth Research
Owing to strong demand and healthy price appreciation in FY23, there was a sudden surge in supply in Gurugram. Compared to
FY22, supply grew 88% to ~41mn sq. ft in FY23. A part of this growth is evident in Sector 63A and the surrounding areas, which
saw a flurry of launches from reputed developers in FY23.
Developer Project Type Category Location Remarks

DLF The Arbour Group housing Luxury Sector 63 ~INR8,000cr project. Fully sold on launch
Adani Realty Samsara Vilasa Independent floors Luxury Sector 63 n/a
The first phase of the project was over-
Signature
Signature Global Group housing Affordable Sector 63A subscription and is fully booked. The
Global Prime
second phase is under planning
~3km from Sector 63A, more than 95%
Mahindra Lifespace Luminaire Group housing Luxury Sector 59
project sold out
Delhi-NCR
Its land parcels in Delhi are spread across the city and are located near industrial hubs of Najafgarh, Mehrauli, and Khera Khurd.
One parcel is located at Rewari in Haryana. Together, the land area adds to ~83 acres. While its development plans are not
finalised, the management intends to use these parcels for either warehouse development or for low-rise residential complexes.
Site Area Location Land parcel (acres)

Dhansa Najafgarh Delhi 6.59
Issapur Najafgarh Delhi 4.45
Mundhela Kalan Najafgarh Delhi 15.16
Bhatti mines Mehrauli New Delhi 24.16
Holambi Khurd Khera Khurd Delhi 18.71
Rewari Haryana Haryana 14.05
Total 83.12
Anant Raj
Key ongoing projects; saleable area/estimated GDV — 2.26mn sq. ft./INR3,254cr

ARCP has launched four projects since FY23 in Gurugram's Sector 63A. These projects are a mix of villas, plotted developments,
group housing, and commercial and retail projects.
Anant Raj Estate

It is the largest contiguous land parcel owned by ARCP. Spanning ~110 acres, it has already developed and sold ~60 acres, which
largely consists of plotted developments and independent floors. In the remainder, it plans to develop an integrated township,
which will be a mix of luxury villas, plotted developments, independent floors, and premium vertical high-rises. It has two ongoing
projects at this site: i) two/three/four BHK villas, launched in Q4FY23, with a developable area of 0.19mn sq. ft., of which 0.05mn
sq. ft. is yet to be sold; and ii) plots spread across 0.28mn sq. ft., of which 0.14mn sq. ft. is balance inventory. The project is
designed to provide a peaceful living experience, with state-of-the-art gardens and playgrounds and recreational spaces such as
a swimming pool, a gym, sports facilities, and fine dining spread over 1.5lk sq. ft. and a retail space or mall in close proximity.
Ashok Estate
Spanning over 20 acres, Ashok Estate is a gated community offering plots for development. Plot sizes vary from 160 to 179 sq.
yards. Located close to Anant Raj Estate, the project has access to multiple retail, recreational, and F&B facilities such as a
shopping complex and club house. The ongoing phase, having a developable area of 0.51mn sq. ft., was launched in July 2022.
More than 80% of plots in this phase have been already booked.
Anant Raj
Birla Navya (Phase I, II, and III)
ARCP entered a 50:50 JV with Birla Estates for development of 764 luxury floors, spread over 47 acres, in Sector 63A. It launched
three out of the four phases in FY23, with a total developable area of 1.11mn sq. ft. across 537 units and a sales potential of
INR1,495cr. The project is fully booked as of September. The last phase of the project is expected to be launched by FY24-end. It
intends to deliver the first phase of the project in Q4FY24.
Exhibit 18: Summary of ongoing projects

Saleable Estimated Area sold Inventory Inventory
ARCP’s
Project Type area (mn GDV (INR (mn sq. (mn sq. value (INR
share
sq. ft.) cr) ft.) ft.) cr)*
Anant Raj Estate
- Estate plots Plots 100% 0.28 461 0.14 0.14 230
- Estate villas Villas 100% 0.09 112 0.05 0.05 56
Ashok Estate
- Ashok Estate plots Plots 100% 0.51 1,017 0.41 0.1 203
Birla Navya
Birla Navya (Phase I, II, and III) GHS 50% 1.02 1,336 1.02 - -
Joy Square Commercial 28% 0.37 329 - 0.37 329
Total 2.26 3,254 1.61 0.65 818
*Inventory value assumed at selling rate; Source: Company, Nuvama Wealth Research
Exhibit 19: Expected cash flow from balance inventory in ongoing projects (ARCP’s share)
Project (INR cr) H2FY24E FY25E FY26E Total
Anant Raj Estate

- Estate plots 115 115 - 230
- Estate villas 28 28 - 56
Ashok Estate
- Ashok Estate plots 161 43 - 203
Joy Square 32 32 28 92
Total 336 218 28 582
Anant Raj
Key forthcoming projects; saleable area/estimated GDV — 5.46mn sq. ft./INR7,974cr
Anant Raj Estate

i) Plotted development: ARCP secured approvals to extend its ongoing plotted development by another 0.72mn sq. ft., taking
the project size to ~1mn sq. ft. It already owns the land and has secured the necessary approvals to convert the same into
plots for sale. The project is expected to be launched in Q1FY25 as inventory in the ongoing phase is almost exhausted. It is
expected to generate an incremental revenue of ~INR1,000cr. It is launching relatively smaller plotted developments in Sector
63A, with a saleable area of 0.13mn sq. ft. and a GDV of INR213cr in November. These projects are likely to have a faster
turnaround, with ARCP expecting to hand them over by FY25-end.
ii) The Estate Residences: It plans to launch a group housing project under its own brand, outside of its JV with Birla Estates. The
project is expected to be spread over two phases. The first phase, with a saleable area of ~1mn sq. ft. and a GDV of
~INR1,800cr, is expected to be launched in November. The project will be spread over 5.43 acres and consists of 250 units of
four and five BHK apartments. The first phase is expected to be completed by December 2027. The second phase is expected
to be launched in Q3FY25 and will have a saleable area/revenue potential of 1.1mn sq. ft./~INR2,100cr. Completion is targeted
in December 2028.
iii) Independent floors: ARCP is expanding its successful independent floor project. It is expected to launch Phase II in November,
with a saleable area of 0.37mn sq. ft. and a revenue potential of ~INR594cr.
Birla Navya (Phase IV)

ARCP plans to launch Phase IV of Birla Navya in Q1FY25, under its JV with Birla Estates. It will have a saleable area of 0.8mn sq. ft.
spread across 208 units, with an estimated GDV of INR1,488cr. It expects to book nearly 50% of inventory at launch and the
balance over two years. It has earmarked around three years for construction of the project.
Anant Raj Ashray II — Tirupati

It plans to launch Phase II of its affordable group housing project in Tirupati in November after receiving a strong response for
Phase I. The project will be spread over 1.19mn sq. ft. and have an estimated GDV of INR315cr. The project will include a small
(~0.03mn sq. ft.) retail/commercial portion in the form of shops and offices, with a revenue potential of ~INR15cr.
Ashok Estate
Ashok Estate is spread over 20.14 acres, or ~97,478 sq. yards. Of this, 56,495 sq. yards are on sale. We expect the balance to be
launched by FY25-end. The balance area translates into a saleable area of 0.37mn sq. ft. Extrapolating the current average
realisation of the project, we expect the new phase to generate a revenue of ~INR740cr.
Exhibit 20: Summary of forthcoming projects

ARCP’s Saleable area Estimated Planned launch Estimated
Project Type
share (mn sq. ft.) GDV (INR cr) date completion date
Anant Raj Estate
- Estate residences (Phase I) GHS 100% 1 1,800 November December 2027
- Estate residences (Phase II) GHS 100% 1.1 2,100 November 2024 December 2028
- Estate floors Independent floors 100% 0.37 594 November September 2026
- Estate plots (extension) Plots 100% 0.86 1,413 June 2024 n/a
- Estate plots (Phase II) Plots 100% 0.13 213 November n/a
Ashok Estate
- Ashok Estate plots Plots 100% 0.37 738 March 2025 n/a
Birla Navya
- Birla Navya (Phase IV) GHS 50% 0.80 1,536 June 2024 March 2027
Affordable housing — Tirupati
- Anant Raj Ashray (Phase II) GHS 100% 1.22 330 November March 2027
Total 5.84 8,724
Anant Raj
Exhibit 21: Expected sales velocity in upcoming projects (ARCP’s share) (mn sq. ft.)
Project Planned launch date H2FY24E FY25E FY26E FY27E Total
Anant Raj Estate

- Estate residences (Phase I) November 0.35 0.35 0.3 - 1
- Estate residences (Phase II) November 2024 - 0.39 0.39 0.33 1.1
- Estate floors November 0.09 0.17 0.11 - 0.37
- Estate plots (extension) June 2024 - 0.26 0.35 0.26 0.86
- Estate plots (Phase II) November 0.03 0.04 0.04 0.01 0.13
Ashok Estate -
- Ashok Estate plots March 2025 - 0.13 0.13 0.11 0.37
Birla Navya -
- Birla Navya (Phase IV) June 2024 - 0.1 0.19 0.12 0.41
Affordable housing — Tirupati -
- Anant Raj Ashray (Phase II) November 0.49 0.61 0.12 - 1.22
Total 0.95 2.04 1.62 0.84 5.46
Exhibit 22: Expected sales velocity in upcoming projects (ARCP’s share) (INR cr)
Project Planned launch date H2FY24E FY25E FY26E FY27E Total
Anant Raj Estate

- Estate residences (Phase I) November 630 630 540 - 1,800
- Estate residences (Phase II) November 2024 - 735 735 630 2,100
- Estate floors November 149 267 178 - 594
- Estate plots (extension) June 2024 - 424 565 424 1,413
- Estate plots (Phase II) November 41 72 72 21 206
Ashok Estate - - - - -
- Ashok Estate plots March 2025 - 258 258 221 738
Birla Navya - - - - -
- Birla Navya (Phase IV) June 2024 - 198 357 238 793
Affordable housing — Tirupati - - - - -
- Anant Raj Ashray (Phase II) November 132 165 33 - 330
Total 952 2,750 2,739 1,534 7,974
Anant Raj
Exhibit 23: Expect pre-sales to clock 77% CAGR over FY23–26 on expanding launch pipeline
4,500 3.0
4,000
2.5
3,500
3,000 2.0
2,500
1.5
2,000
1,500 1.0
1,000
0.5
500
- -
FY22 FY23 FY24E FY25E FY26E
Pre-sales value (INR cr) Pre-sales area (mn sq. ft.)
Future development potential: ~80 acres

ARCP owns nearly 30 acres in its key micro-market of Sector 63A, Gurugram. A large portion of the unused land is situated in the
vicinity of Ashok Estate. As per our assumptions, this land will have a developable area of 2.29mn sq. ft., with an estimated
development value of INR4,000cr. Sector 63A has land parcels of ~50 acres, which ARCP will acquire as needed. It does not expect
the entry of any new developer into Sector 63A as the remaining land parcels are non-contiguous and are adjacent to its property.
It plans to acquire ~11 acres in FY25 for development of a group housing project, with a development potential of ~1mn sq. ft.
and a GDV of ~INR1,800cr. Since the land has not been acquired by it, we have not considered the same in our valuation.
Anant Raj
III. Betting big on data centres — a high-growth, high-yield real estate opportunity
As indicated by the rising data consumption and data creation trends, India is emerging as a data centre hub. From a monthly
usage of 9.5GB, India’s per capita data consumption surged to 19.5GB in 2022 (~20% CAGR). With greater internet penetration,
technological advancement (5G), and increasing per capita income, consumption is set to only rise. As per a biannual report
published by Ericsson, data consumption can clock 16% CAGR over 2022–28, which is ~47.5GB per month. With such a sharp
spurt in data consumption, demand for data storage will also increase, which is one of the key drivers fuelling the optimism for
India’s data centre industry.
In August, Parliament approved the Digital Personal Data Protection Bill, which provides guidelines for handling and storing
personal data. Data collected online or offline, and later digitised in India, as well as foreign companies operating within India
come under the ambit of this bill. To use personal data, organisations must have a valid reason and obtain consent from
individuals, ensuring data accuracy, security, and deletion when its purpose is fulfilled. Along with data protection, the bill also
limits cross-border data storage, encouraging local storage of the data gathered within India. This data localisation is likely to
intensify the demand for data centres in coming years.
As per JLL, India’s data centre capacity has more than doubled since 2019 and stood at 778MW as of June. Based on the pre-
commitments and increasing demand from hyperscalers and other users, JLL expects a supply addition of 678MW over three
years beginning 2023, taking the total capacity to 1,456MW by the end of 2025. This addition will necessitate the demand for
9.1mn sq. ft. of real estate space, requiring an investment of USD4.8bn in data centre infrastructure. Delhi-NCR will see an
addition of ~80MW of data centre capacity over 2023–25, entailing investments of ~USD528mn. The incremental demand will
be largely driven by hyperscalers, who have pre-commitments of 350MW over 2023–25 across India.
Exhibit 24: Expect India's data centre capacity to clock 26.3% CAGR over 2022–25
1,800 18% 20%
1,500 16%
13%
1,200
10% 12%
900 9%
1,456
8%
1,204
600
980
722
660
4%
565
506
300
447
390
350
288
- 0%
2019 2020 2021 2022 2023E 2024E 2025E
Data centre capacity (MW) Occupied capacity (MW) Vacancy (RHS)
Source: JLL India, Nuvama Wealth Research
Anant Raj
Exhibit 25: Capacity mix; Mumbai and Chennai to lead the growth, Delhi-NCR to grow in line with the industry
2022 2025
1% 2%
5%
9% Mumbai 6%
6% Chennai
8%
Delhi-NCR
11% 50%
Pune 11%
51%
Hyderabad
11%
Bengaluru
17%
12% Kolkata
As of 2022-end, the co-location data centre capacity in Delhi-NCR stood at 77MW, spread across 14 assets. Of this, 14MW is
vacant while the rest is occupied. Of the 63MW, ~47%/14%/10%/10% is occupied by hyperscalers/BFSI/technology/telecom
industry and the balance by others such as retail, healthcare, and media.
Exhibit 26: User industry mix in Delhi-NCR in 2022

3% 1% 1%
Hyperscalers
8% BFSI
6% Technology
Telecom
47%
10% Retail & e-commerce
Others
10%
Media & entertainment
14% Healthcare
Energy
As of January, ~80MW is under construction, with JLL expecting this to turn operational over 2023–25. This will be followed by
another 103MW planned for 2026–27. A significant portion of incremental demand is expected to be from hyperscalers who
have raised their pre-commitments meaningfully over 2022 (pan India commitment of 350MW over 2023–25). Apart from
hyperscalers, we expect strong demand from the government and corporates. A few key operators in the region include NTT, the
Adani Group, and Yotta Infrastructure.
Anant Raj
Exhibit 27: Delhi-NCR capacity to clock 26.8% CAGR over 2022–25; demand robust on pre-
commitments from hyperscalers
180 35%
29%
27% 30%
150 25%
25%
120 18%
20%
90
157
15%
126
60
10%
91
77
30 5%
47
40
40
- 0%
2019 2020 2021 2022 2023E 2024E 2025E
Capacity (MW) Net new absorption (MW) Vacancy (RHS)
To capitalise on the growing demand for data centres in and around Delhi-NCR, ARCP forayed into the building and leasing of
such centres in FY24. It has aggressive plans to expand this business by retrofitting and remodelling its commercial office assets
at three locations into best-in-class data centres. It plans to develop a combination of Tier III and IV data centres (Tier III/IV have
n+1/n+n redundancy), with a 300MW IT load capacity.
i) Anant Raj Tech Park, Manesar (Haryana) — 3MW leased out to TCIL and RAILTEL each
Anant Raj Tech Park is one of the firm’s first assets in the data storage domain, located 10km from Gurugram, which is the IT and
BPO hub in NCR. It is spread over 10 acres, with a leasable area of 1.8mn sq. ft. The existing structure can be converted into a
Tier III data centre, with an IT load capacity of 50MW. In the first phase, ARCP plans to build a 21MW IT load capacity data centre
over 450,000sq. ft., of which 3MW has been completed. The balance is set to be commissioned by Q4FY24-end. It has received
TIA-942 Tier III certification for the first phase. The management pegs the average monthly rental potential ~INR9,000/kW and
the average cost of constructing ~INR26cr/MW. In the second phase, it plans to expand its IT load capacity to 50MW.
ii) Anant Raj Tech Centre, Rai (Haryana) — 200MW potential

The Anant Raj Tech Centre is spread over 25 acres in Rai, with a development potential of 5.1m sq. ft. It is just 5km from NCR and
is connected to the airports at Gurugram and Manesar by the Kundli–Manesar–Palwal Expressway. Going forward, the area is
expected to be connected to the Delhi Metro. ARCP has a leasable area of 2.1mn sq. ft., which it plans to convert into a Tier III
data centre with a 100MW IT load capacity. It plans to add 1.5mn sq. ft. of leasable area, which can host 100MW of Tier III and
IV data centres. This will be its largest data centre.
iii) Anant Raj Tech Park, Panchkula (Chandigarh) — 50MW potential

The Anant Raj Tech Park at Panchkula is a JV between ARCP and US-based Monsoon Capital. It is spread over 9.2 acres and has a
development potential of 1.6mn sq. ft. Till date, it has developed 0.6mn sq. ft., which it has leased out to commercial offices. The
asset has a greenfield potential of 5.25 acres, with an FSI of 0.6mn sq. ft., that can be developed into a Tier IV data centre with
an IT load capacity of 50MW.
Anant Raj
Exhibit 28: Planned data centre expansion

Leasable area To be operational in the
Asset Land area (acres) IT capacity (MW)
(mn sq. ft.) near term
Anant Raj Tech Park, Manesar 10 2 50 21
Anant Raj Trade Centre, Rai 25 4 200 -
Anant Raj Tech Park, Panchkula 9 2 50 -
Exhibit 29: Attractiveness of data centre investments in the near term (21MW asset)
INR/MW/month Annual revenue/MW
Particulars
(cr) (INR cr)
Expected revenue* (A) 0.9 10.8
Operating expense* 0.15 1.8
Operating profit 0.75 9
Operating margin 83% 83%
Expected depreciation 0.13 1.56
EBIT (B) 0.62 7.44
Tax 0.16 1.87
NOPAT (C) 0.46 5.57
NOPAT margin 52% 52%
Construction cost* (D) 26
Payback (years) (D/C) 4.67
Asset turnover (A/D) 0.42
Average yield (C/D) 21%
Cash yield (B/D) 27%
*Based on the management’s guidance; Source: Company, Nuvama Wealth Research
Exhibit 30: Expected rentals and cash flow from the 21MW data centre
FY28E and
As of March FY24E FY25E FY26E FY27E beyond
(annual)
Capacity (MW)* 20.1 20.1 20.1 20.1 20.1
Occupancy 15% 50% 80% 98% 98%
Occupied capacity (MW) 3 10.1 16.1 19.7 19.7
Expected rental/MW (INR cr)* 0.9 1 1 1.1 1.1
Expected rental revenue (INR cr) 34.3 119.9 201.4 259.1 272.1
Net rentals (post tax, INR cr) 25.6 89.7 150.7 193.8 203.5
*Based on the management’s guidance; Source: Company, Nuvama Wealth Research
Anant Raj
IV. Leasing segment — Steadily growing annuity portfolio
ARCP’s commercial properties are spread across NCR and cater to the office, retail, and hospitality segment. It operates three IT
parks with a leasable area of 4.65mn sq. ft., two hospitality assets spread over 0.2mn sq. ft., and one retail asset spread over
0.1mn sq. ft. The hospitality assets have been leased at a fixed rate.
Exhibit 31: Commercial assets owned by ARCP

Leasable area Estimated annual
Project Location Type Occupancy
(mn sq. ft.) rental (INR cr)
Anant Raj Tech Park* Manesar Office 1.8 0 n/a
Anant Raj Trade Centre* Rai Office 2.1 0 n/a
Anant Raj Tech Park Panchkula Office 0.6 100% 43.2
Office building Gurugram Office 0.15 100% 16.2
Misaki Hotel Manesar Hospitality 0.1 n/a n/a
Stellar Resorts New Delhi Hospitality 0.1 n/a 8.52
Bel-LA Monde New Delhi Hospitality 0.1 n/a 5.61
Karol Bagh Mall Karol Bagh Retail 0.09 30% n/a
*Office assets at Manesar and Rai are unoccupied. ARCP is in the process of converting these assets into data centres
It is in the process of adding another office asset (Ashok Tower) in Gurugram with a leasable area of 0.16mn sq. ft. and an
estimated monthly rental value of INR90 per sq. ft. As per the management, this office asset is expected to launch in FY24 and
turn operational by June 2025. ARCP expects steady-state annual rentals of INR17–18cr once it is fully occupied.
Anant Raj
V. Growth in pre-sales, scale up in rentals from data centres to drive 76% CAGR in OCF
Backed by a significant scale up in launches and subsequently pre-sales, we expect revenue from the residential segment to
improve meaningfully over FY23–26. We expect 34% CAGR in development revenue to INR2,216cr in FY26 from INR926cr in FY23.
We see a sharp increase in rental income as the first phase of the data centre (21MW) ramps up. We expect rental income to
clock 117% CAGR to INR317cr in FY26 from INR31cr in FY23.
Exhibit 32: Expect 38% revenue CAGR over FY23–26

3,000
317
2,000
INR cr
277
31 194
1,000 2,216
20 1,380
926 1,073
442
-
Income from development Income from leasing
We expect 74% EBITDA CAGR over FY23–26 led by: i) expanding margin in residential projects on improving mix of higher margin
luxury projects and plotted developments, ii) increasing contribution from the high margin data centre assets, and iii) operating
leverage benefits. We expect EBITDA margin to expand to 41% in FY26 from 21% in FY23.
Exhibit 33: Expect 74% EBITDA CAGR over FY23–26

1,500 42% 41% 50%
31% 40%
1,000
21% 30%
16%
1,045
398
20%
197
500
697
10%
76
- 0%
EBITDA (INR cr) EBITDA margin (%, RHS)
On healthy profits and an improving working capital cycle, led by improving sales velocity (quicker liquidation of inventory), we
expect a significant portion of EBITDA to flow down to operating cash flow. We expect operating cash flows to expand to INR641cr
in FY26 from INR117cr in FY23 (76% CAGR).
Exhibit 34: Expect OCF to clock 76% CAGR over FY23–26

1,000 801
636 641
INR cr
500
231
117
-
Anant Raj
VI. Internal accruals to fund investment in data centres, net debt to decline
As per the management, each MW of data centre capacity will require a capex of INR26cr. ARCP is targeting a capacity of 21MW/
29MW in FY24/FY25 which will entail a capex of ~INR525cr/~INR750cr. We are only considering the first phase of 21MW in our
estimates and valuation. Given the expected operating cash flow of ~INR641cr in FY24, we believe this capex will be funded via
internal accruals. While it may avail a few bridge loans to mitigate the gaps in the timing of cash flows, we do not see it drawing
on any long-term debt. We expect net debt to decline progressively over FY23–26E on strong cash flow generation. From 0.37x
in FY23, we expect net debt-to-equity ratio to improve to -0.11x in FY26.
Exhibit 35: Expect ARCP to turn net cash positive in FY26

1,500 0.47 0.6
0.37
1,200 0.29 0.5
900 0.4
1,283
1,252
0.3
1,104
1,035
600
965
889 0.2
130
614
404
300
0.1
- -
-470
0.04
-300 -0.1
-600 (0.11) -0.2
Gross debt (INR cr) Net debt (INR cr) Net D/E ratio (x, RHS)
Key risks
i) Delay in the commissioning of a 21MW data centre.
ii) Lower than expected occupancy in data centre assets.
iii) Slower than expected sales velocity in residential projects.
iv) Reversal of the upcycle in the Delhi-NCR residential market.
Anant Raj
Company overview
ARCP started off as a construction company in 1969, working on government contracts and projects for over 30 years. It gradually
transitioned to a significant landowner in Delhi and NCR and entered the commercial leasing and residential real estate. Till date,
it has delivered more than 20mn sq. ft. of residential real estate projects, developed over 5mn sq. ft. of commercial space, and
owns over 240 acres in prime locations across NCR. It has a comprehensive portfolio of residential townships, group housing
projects, commercial developments, data centres, and hospitality developments spread across Delhi, Gurugram, and NCR.
Key managerial personnel

ARCP was co-founded by Mr. Ashok Sarin in 1969. He has passed on the mantle to the fourth generation.
Name Designation Remarks

Managing He has been associated with ARCP since 2009 and has been MD since 2021. He has a
Mr Amit Sarin
Director bachelor’s degree in commerce
With an experience of more than 11 years, he has handled multiple positions at ARCP and
Mr Aman Sarin Director & CEO
has been its CEO since 2021
He has been with the company since 2012, handling multiple executive roles. He took
Mr Ashim Sarin Director & COO
over as COO from Mr Aman Sarin in 2021
A qualified Chartered Accountant, he has been with ARCP since 2008 and has been the
Mr Pankaj Kumar Gupta CFO
CFO since 2019
Mr Manoj Pahwa CS With an experience of 13 years, he has been handling the CS position since 2012
Anant Raj
Financials
Income Statement
Year to March (INR cr) FY22 FY23 FY24E FY25E FY26E
Income from operations 462 957 1,267 1,657 2,533
Direct cost 354 718 821 903 1,406
Employee cost 14 16 19 23 33
Other expenses 18 26 29 35 49
Total operating expenses 386 760 869 961 1,487
EBITDA 76 197 398 697 1,045
Depreciation and amortisation 14 16 19 23 33
EBIT 62 181 379 673 1,013
Interest expenses 27 32 34 21 14
Other income 39 48 36 36 36
Profit before tax 74 198 381 688 1,034
Provision for tax 23 52 96 173 263
Core profit 51 145 285 514 771
Extraordinary items 0 0 - - -
Profit after tax 51 145 285 514 771
Minority interest (2) (2) (2) (2) (2)
Share from associates - - - - -
Adjusted net profit 49 143 283 512 769
Equity shares outstanding (cr) 30 32 32 32 32
Basic EPS (INR) 2 4 9 16 24
Diluted shares (cr) 30 32 32 32 32
Fully diluted EPS (INR) 2 4 9 16 24
Common size metrics as a percentage of net revenue

Year to March FY22 FY23 FY24E FY25E FY26E
Operating expenses 84 79 69 58 59
Depreciation 3 2 2 1 1
Interest expenditure 6 3 3 1 1
EBITDA margin 16 21 31 42 41
Net profit margin 11 15 22 31 30
Growth metrics (%)

Revenue 85 107 32 31 53
EBITDA 115 160 102 75 50
PBT 527 167 131 81 50
Adjusted net profit 2,052 190 180 81 50
Adjusted EPS n.m. 172 164 80 52
Anant Raj
Balance Sheet (INR cr)
As of March 31 FY22 FY23 FY24E FY25E FY26E
Equity share capital 59 65 65 65 65
Reserves and surplus 2,580 2,760 3,030 3,527 4,292
Shareholders’ funds 2,639 2,825 3,094 3,592 4,357
Minority interest 35 33 31 29 27
Borrowings 1,283 1,104 965 614 404
Trade payables 6 14 16 17 27
Other liabilities and provisions 422 382 696 1,274 1,535
Total liabilities 4,385 4,358 4,802 5,526 6,349
Net block 1,310 1,305 1,461 1,851 1,851
Capital work-in-progress 48 77 390 (0) (0)
Total fixed assets 1,358 1,382 1,851 1,851 1,851
Non-current investments 460 460 460 460 460
Cash/cash equivalent 31 69 76 484 874
Sundry debtors 22 51 70 91 139
Inventories 1,135 1,197 1,147 1,441 1,826
Other assets 1,380 1,198 1,198 1,198 1,198
Total assets 4,385 4,358 4,802 5,526 6,349
Cash Flow Statement

Operating profit after tax but
65 161 304 538 804
before working capital changes
Working capital changes 166 -44 332 264 -163
CFO 231 117 636 801 641
CFI -18 34 -487 -23 -23
CFF -220 -113 -141 -369 -228
Total cash flow -7 38 7 408 390
Anant Raj
Ratios
RoAE 2% 5% 10% 15% 19%
RoACE 2% 5% 9% 16% 23%
Debtor days 17 20 20 20 20
Inventory days 934 470 389 380 300
Payable days 6 7 7 7 7
Cash conversion cycle (days) 945 483 402 393 313
Gross debt-to-equity ratio (x) 0.49 0.39 0.31 0.17 0.09
Net debt-to-equity ratio (x) 0.47 0.37 0.29 0.04 (0.11)
Interest coverage ratio (x) 2.3 5.7 11.2 31.3 71.6
Valuation parameters
Diluted EPS (INR) 1.6 4.5 8.8 15.9 24.1
YoY growth n.m. 172% 97% 80% 52%
Diluted P/E ratio (x) 40.2 27.4 28.2 15.6 10.3
Price/BV ratio (x) 0.7 1.4 2.6 2.2 1.8
EV/sales ratio (x) 7 5.3 7.1 4.9 3
EV/EBITDA ratio (x) 42.6 25.5 22.5 11.8 7.3
Diluted shares outstanding 30 32 32 32 32
Nuvama Wealth and Investment Limited, Eight Floor 801 to 804, Inspire BKC G Block, BKC Main Road, Bandra Kurla Complex,
Bandra East, Mumbai-400051
Sandeep Raina
Digitally signed by
Head of Research – Professional Client Group
SANDEEP SANDEEP ASHOK RAINA
ASHOK RAINA Date: 2023.11.09
20:04:02 +05'30'
[email protected]
Disclaimer
Nuvama Wealth and Investment Limited (Formerly known as Edelweiss Broking Limited) ("NWIL") or (“Research Entity”) a company duly incorporated under the Companies Act, 1956
(CIN No U65100GJ2008PLC077462) having its Registered office situated at 201 to 203, Zodiac Plaza, Xavier College Road, Off C G Road, Ahmedabad, Gujarat - 380009. It is regulated by
the Securities and Exchange Board of India ("SEBI") and is licensed to carry on the business of broking, depository services and related activities. The business of NWIL and its Associates
(list available on www.nuvamawealth.com) are organized around five broad business groups: Credit including Housing and SME Finance, Commodities, Financial Markets, Asset
Management and Life Insurance
Broking services offered by Nuvama Wealth and Investment Limited under SEBI Registration No. INZ 000005231. Name of the Compliance Officer: Mr. Pranav Tanna, Email address:
[email protected]. Corporate Office Eight Floor 801 to 804, Inspire BKC G Block, BKC Main Road, Bandra Kurla Complex, Bandra East, Mumbai-400051
This Report has been prepared by Nuvama Wealth and Investment Limited (Formerly Edelweiss Broking Limited) [NWIL] in the capacity of a Research Analyst having SEBI Registration
No. INH000011103 and distributed as per SEBI (Research Analysts) Regulations 2014. This report does not constitute an offer or solicitation for the purchase or sale of any financial
instrument or as an official confirmation of any transaction. The information contained herein is from publicly available data or other sources believed to be reliable. This report is
provided for assistance only and is not intended to be and must not alone be taken as the basis for an investment decision. The user assumes the entire risk of any use made of this
information. Each recipient of this report should make such investigation as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies
referred to in this document (including the merits and risks involved), and should consult his own advisors to determine the merits and risks of such investment. The investment
discussed or views expressed may not be suitable for all investors.
This information is strictly confidential and is being furnished to you solely for your information. This information should not be reproduced or redistributed or passed on directly or
indirectly in any form to any other person or published, copied, in whole or in part, for any purpose. This report is not directed or intended for distribution to, or use by, any person or
entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law,
regulation or which would subject NWIL and associates / group companies to any registration or licensing requirements within such jurisdiction. The distribution of this report in certain
jurisdictions may be restricted by law, and persons in whose possession this report comes, should observe, any such restrictions. The information given in this report is as of the date
of this report and there can be no assurance that future results or events will be consistent with this information. This information is subject to change without any prior notice. NWIL
reserves the right to make modifications and alterations to this statement as may be required from time to time. NWIL or any of its associates / group companies shall not be in any
way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. NWIL is committed to providing independent
and transparent recommendation to its clients. Neither NWIL nor any of its associates, group companies, directors, employees, agents or representatives shall be liable for any damages
whether direct, indirect, special or consequential including loss of revenue or lost profits that may arise from or in connection with the use of the information. Our proprietary trading
and investment businesses may make investment decisions that are inconsistent with the recommendations expressed herein. Past performance is not necessarily a guide to future
performance .The disclosures of interest statements incorporated in this report are provided solely to enhance the transparency and should not be treated as endorsement of the views
expressed in the report. The information provided in these reports remains, unless otherwise stated, the copyright of NWIL. All layout, design, original artwork, concepts and other
Intellectual Properties, remains the property and copyright of NWIL and may not be used in any form or for any purpose whatsoever by any party without the express written permission
of the copyright holders.
NWIL shall not be liable for any delay or any other interruption which may occur in presenting the data due to any reason including network (Internet) reasons or snags in the system,
break down of the system or any other equipment, server breakdown, maintenance shutdown, breakdown of communication services or inability of the NWIL to present the data. In
no event shall NWIL be liable for any damages, including without limitation direct or indirect, special, incidental, or consequential damages, losses or expenses arising in connection
with the data presented by the NWIL through this report. We offer our research services to clients as well as our prospects. Though this report is disseminated to all the customers
simultaneously, not all customers may receive this report at the same time. We will not treat recipients as customers by virtue of their receiving this report.
NWIL and its associates, officer, directors, and employees, research analyst (including relatives) worldwide may: (a) from time to time, have long or short positions in, and buy or sell
the securities thereof, of company(ies), mentioned herein or (b) be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a
market maker in the financial instruments of the subject company/company(ies) discussed herein or act as advisor or lender/borrower to such company(ies) or have other
potential/material conflict of interest with respect to any recommendation and related information and opinions at the time of publication of research report or at the time of public
appearance. (c) NWIL may have proprietary long/short position in the above mentioned scrip(s) and therefore should be considered as interested. (d). The views provided herein are
general in nature and do not consider risk appetite or investment objective of any particular investor; readers are requested to take independent professional advice before investing.
This should not be construed as invitation or solicitation to do business with NWIL. (e) Registration granted by SEBI and certification from NISM in no way guarantee performance of
NWIL or provide any assurance of returns to investors and clients.
NWIL or its associates may have received compensation from the subject company in the past 12 months. NWIL or its associates may have managed or co-managed public offering of
securities for the subject company in the past 12 months. NWIL or its associates may have received compensation for investment banking or merchant banking or brokerage services
from the subject company in the past 12 months. NWIL or its associates may have received any compensation for products or services other than investment banking or merchant
banking or brokerage services from the subject company in the past 12 months. NWIL or its associates have not received any compensation or other benefits from the Subject Company
or third party in connection with the research report. Research analyst or his/her relative or NWIL’s associates may have financial interest in the subject company. NWIL, its associates,
research analyst and his/her relative may have other potential/material conflict of interest with respect to any recommendation and related information and opinions at the time of
publication of research report or at the time of public appearance.
Participants in foreign exchange transactions may incur risks arising from several factors, including the following: (i) exchange rates can be volatile and are subject to large fluctuations;
(ii) the value of currencies may be affected by numerous market factors, including world and national economic, political and regulatory events, events in equity and debt markets and
changes in interest rates; and (iii) currencies may be subject to devaluation or government imposed exchange controls which could affect the value of the currency. Investors in securities
such as ADRs and Currency Derivatives, whose values are affected by the currency of an underlying security, effectively assume currency risk.
Research analyst has served as an officer, director or employee of subject Company: No
NWIL has financial interest in the subject companies: No
NWIL’s Associates may have actual / beneficial ownership of 1% or more securities of the subject company at the end of the month immediately preceding the date of publication of
research report.
Research analyst or his/her relative has actual/beneficial ownership of 1% or more securities of the subject company at the end of the month immediately preceding the date of
publication of research report: No
Disclaimer
NWIL has actual/beneficial ownership of 1% or more securities of the subject company at the end of the month immediately preceding the date of publication of research report: No
Subject company may have been client during twelve months preceding the date of distribution of the research report.
There were no instances of non-compliance by NWIL on any matter related to the capital markets, resulting in significant and material disciplinary action during the last three years. A
graph of daily closing prices of the securities is also available at www.nseindia.com
Analyst Certification
The analyst for this report certifies that all of the views expressed in this report accurately reflect his or her personal views about the subject company or companies and its or their
securities, and no part of his or her compensation was, is or will be, directly or indirectly related to specific recommendations or views expressed in this report.
DISCLAIMERS FOR INTERNATIONAL JURISDICTION
Disclaimer for U.S. Persons

The content of the website does not constitute an offer or invitation to purchase or subscribe for any securities or solicitation of any investments or investment services and/or shall
not be considered as an advertisement tool. "U.S. Persons" are generally defined as a natural person, residing in the United States or any entity organized or incorporated under the
laws of the United States. US Citizens living abroad may also be deemed "US Persons" under certain rules. THIS DOCUMENT IS INTENDED SOLELY TO PROVIDE INFORMATION TO THE
QUALIFIED INSTITUTIONAL INVESTORS ONLY AND IS NOT MEANT FOR RETAIL INVESTORS. If you are not the intended recipient you must not copy, distribute, or take any action or place
reliance on it. If you have received this communication by error, please notify the sender immediately. This communication is intended solely for the person to whom it is addressed
and may contain confidential or privileged information. The document is intended to be educational only and not for a marketing or prospecting purpose. The views and opinions
expressed as part of this presentation do not necessarily state or reflect those of Nuvama, its holding company(ies), subsidiaries and associates including entities in overseas jurisdictions.
The content of the website or any information contained therein must not be distributed, published, reproduced, or disclosed (in whole or in part) by recipients to any other person.
The content of the website must not be acted on or relied on by persons who are not qualified institutional investor. Any investment or investment activity to which this website relates,
is available only to qualified institutional investor and will be engaged only with qualified institutional investor. Any person who is not a qualified institutional investor should not act or
rely on this website or any of its contents
Disclaimer for U.K. Persons:

The content of the website has not been approved by an authorized person within the meaning of the Financial Services and Markets Act 2000 ("FSMA"). In the United Kingdom, this
document is intended for (a) persons who have professional experience in matters relating to investments falling within Article 19(5) of the FSMA (Financial Promotion) Order 2005
(the “Order”); (b) persons falling within Article 49(2)(a) to (d) of the Order (including high net worth companies and unincorporated associations); and (c) any other persons to whom it
may otherwise lawfully be communicated (all such persons together being referred to as “relevant persons”). THIS document IS INTENDED SOLELY TO PROVIDE INFORMATION TO THE
QUALIFIED INSTITUTIONAL INVESTORS ONLY AND IS NOT MEANT FOR RETAIL INVESTORS. If you are not the intended recipient you must not copy, distribute, or take any action or place
reliance on it. If you have received this communication by error, please notify the sender immediately. This communication is intended solely for the person to whom it is addressed
and may contain confidential or privileged information. The content of the document is intended to be educational only and not for a marketing or prospecting purpose. The views and
opinions expressed as part of this document do not necessarily state or reflect those of Nuvama, its holding company (ies), subsidiaries and associates including entities in overseas
jurisdictions.
Disclaimer for Canadian Persons

The content of the website is NOT MEANT FOR RETAIL INVESTORS. IT IS INTENDED SOLELY TO PROVIDE INFORMATION TO THE PERMITTED CLIENTS ONLY (as defined in National
Instrument 31-103 ("NI 31-103")) who are resident in the Province of Ontario, Canada (an "Ontario Permitted Client"). Any products or services described in this document are made
available only in accordance with applicable Canadian securities law and only where they may be lawfully offered for sale. If the person accessing this document is not an Ontario
Permitted Client, as specified above, then the recipient should not access the same. Nuvama and its group companies is relying on an exemption from the adviser and/or dealer
registration requirements under NI 31-103 available to certain international advisers and/or dealers. Please be advised that (i) Nuvama and its group companies is not registered in the
Province of Ontario to trade in securities nor is it registered in the Province of Ontario to provide advice with respect to securities; (ii) Nuvama’s head office or principal place of business
is located in India; (iii) all or substantially all of Nuvama's assets may be situated outside of Canada; (iv) there may be difficulty enforcing legal rights against Nuvama because of the
above; and (v) the name and address of Nuvama Group’s agent for service of process in the Province of Ontario is: Bamac Services Inc., 181 Bay Street, Suite 2100, Toronto, Ontario
M5J 2T3 Canada. The content of the website must not be distributed, published, reproduced or disclosed (in whole or in part) by recipients to any other person. This communication
must not be acted on or relied on by persons who are not PERMITTED CLIENTS. Any investment or investment activity to which this communication relates is available only to relevant
persons and will be engaged in only with relevant persons. Any person who is not a PERMITTED CLIENTS should not act or rely on this communication or any of its contents.
Disclaimer for UAE Persons

The content of the website is INTENDED SOLELY TO PROVIDE INFORMATION TO THE INSTITUTIONAL QUALIFIED INVESTORS ONLY AND IS NOT MEANT FOR RETAIL INVESTORS. Further,
the information in this document does not constitute a public offer of securities in the United Arab Emirates and is not intended to be a public offer. The website has not been approved
by or filed with the Central Bank of the United Arab Emirates, the Securities and Commodities Authority of the United Arab Emirates or the Dubai Financial Services Authority. The
content of the website must not be distributed, published, reproduced or disclosed (in whole or in part) by recipients to any other person. The website must not be acted on or relied
on by persons who are not INSTITUTIONAL QUALIFIED INVESTORS. Any investment or investment activity to which this communication relates is available only to relevant persons and
will be engaged in only with relevant persons. Any person who is not a INSTITUTIONAL QUALIFIED INVESTORS should not act or rely on this communication or any of its contents. The
content of the website must not be distributed, published, reproduced or disclosed (in whole or in part) by recipients to any other person. The website must not be acted on or relied
on by persons who are not relevant persons. Any investment or investment activity to which this communication relates is available only to relevant persons and will be engaged in
only with relevant persons. Any person who is not a relevant person should not act or rely on this communication or any of its contents.
Disclaimer
Disclaimer for Australia Persons

Any information set out on the website is only intended for persons who are “Professional Investors” as described in Section 761(G) of the Corporations Act 2001 (as amended). It is
not intended to for any other class of persons and may not be relied upon by such persons and is therefore not intended for private individuals or those who would be classified as
Retail Clients. All information on the website is general information only and is not to be considered any form of advice (whether investment or otherwise) or a recommendation,
solicitation, or an offer to purchase or sell investments or related financial products or any financial services. The receiver of the website should make their own decisions based upon
their own financial objectives and financial resources and, if in any doubt, should seek advice from an appropriate independent advisor. Nuvama and its group companies does not hold
an Australian Financial Services License and is not licensed in Australia to provide financial product advice or services and is relying on “limited connection relief exemption” when
dealing with “Professional Investors” (Wholesale client category) in Australia.
Disclaimer for Singapore Persons

The content of the website IS INTENDED SOLELY TO PROVIDE INFORMATION ONLY TO THE INSTITUTIONAL OR ACCREDITED INVESTORS ONLY AND IS NOT MEANT FOR RETAIL INVESTORS
AS DEFINED UNDER THE SECURITIES AND FUTURES ACT “SFA”. If you are not the intended recipient you must not copy, distribute, or take any action or place reliance on it. If you have
received this communication by error, please notify the sender immediately. Any such information contained or discussed in the document is subject to change and Nuvama and its
group companies shall not have any responsibility to maintain the information made available or to supply any correction therewith. In no event will Nuvama and its group companies
be liable for any special direct or indirect or consequential damages which may be incurred from the use of the information made available, even if it has been advised of the possibility
of such damages. The company and its employees mentioned in these communications cannot be held liable for any error’s inaccuracies and/or omission howsoever caused. Any
opinion or advice if any herein is made on a general basis and is subject to change without notice. The information provided in this document may contain optimistic statements
regarding future events or future financial performance of countries, markets, or companies. You must make your own financial assessment of the relevance, accuracy and adequacy
of the information provided if any in this document. This document has not been reviewed by the Monetary Authority of Singapore “MAS”.
Additional Marketing Disclaimer for all other International Jurisdiction:

The content of this website is restricted in certain jurisdictions and does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase
or subscribe for, by anyone in any jurisdiction in which such an offer or solicitation is not authorised or may not lawfully be made (without compliance with any registration or other
legal requirements) or in which the person making such offer or solicitation is not qualified to do so or to any person to whom it is unlawful to make such offer in any jurisdiction. The
above information is for general guidance only, it is the responsibility of receivers to inform themselves as to any income or other tax consequences arising in the jurisdictions in which
they are resident or domiciled or have any other presence for tax purposes, as well as any foreign exchange or other fiscal, or legal or regulatory restrictions which are relevant to their
particular circumstances in connection with the acquisition, holding or disposal of any securities if any mentioned in this document. This document is strictly private and confidential
and may not be reproduced or use for any other purpose and not be provided to any person other than the recipient thereof. If you are not the intended recipient you must not copy,
distribute, or take any action or place reliance on it. If you have received this communication by error, please notify the sender immediately. Any such information contained or discussed
on the website is subject to change and Nuvama Group or any of its Directors, Employees, agents or representatives shall not have any responsibility to maintain the information made
available or to supply any correction therewith. In no event will Nuvama Group or any of its Directors, Employees, agents or representatives, be liable for any special direct or indirect
or consequential damages which may be incurred from the use of the information made available, even if it has been advised of the possibility of such damages. The company and its
employees mentioned in these communications cannot be held liable for any error’s inaccuracies and/or omission howsoever caused. Any opinion or advice herein is made on a general
basis and is subject to change without notice. The information provided in this website may contain optimistic statements regarding future events or future financial performance of
countries, markets, or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided therein.
INVESTMENT IN SECURITIES MARKET ARE SUBJECT TO MARKET RISKS. READ ALL THE RELATED DOCUMENTS CAREFULLY BEFORE
INVESTING.

Anant Raj Nuvama

Uploaded by

Copyright:

Available Formats

Anant Raj Nuvama

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Anant Raj Nuvama

Uploaded by

Copyright:

Available Formats

Long Term Recommendation

Business structure .................................................................................................................................................... 3

Sensitivity analysis ................................................................................................................................................... 8

Valuation methodology ........................................................................................................................................... 8

I. Cyclical upswing in the residential real estate market of Gurugram .................................................................... 11

II. Scaling up launches to capitalise on the resurgent demand................................................................................ 13

IV. Steadily growing commercial annuity portfolio .................................................................................................. 24

Key risks ................................................................................................................................................................... 26

Company overview .................................................................................................................................................. 27

PT of INR302 based on 1xFY24E

700 Exhibit 1: 5-year stock performance

Source: BSE, NSE, Nuvama Wealth Research

Exhibit 2: 1-year stock performance

Sensex Nifty Realty ARCP

Source: BSE, NSE, Nuvama Wealth Research

Exhibit 3: Valuation summary

Residential real estate

Exhibit 4: Estimated NAV of ongoing projects

Exhibit 6: Expected NAV of the fully paid land bank

Sector 63A, Gurugram 30 2.29 4,002 2,198

Exhibit 7: Expected NAV of data centres

Exhibit 8: Expected NAV of commercial leased assets

Exhibit 9: Expected fair value of hospitality assets

Exhibit 10: Sensitivity of valuation to key assumptions

Data Centres - NAV calculation

Commercial operations - NAV calculation

Hotel valuation – 12x EV/EBITDA FY24 multiple

Exhibit 10: WACC calculation

Exhibit 11: Other key assumptions for valuation

I. Cyclical upswing in the residential real estate market of Gurugram

Exhibit 12: Gurugram residential real estate market

Source: Propequity, Nuvama Wealth Research

Source: Data.gov.in, Nuvama Wealth Research

Source: PropEquity, Nuvama Wealth Research

II. Scaling up launches to capitalise on resurgent demand

Land bank in Sector 63A, Gurugram/rest of Delhi-NCR — ~237 acres/~83 acres

Sector 63A, Gurugram

Exhibit 16: Land bank at Sector 63A, Gurugram

Anant Raj Estate Ashok Estate Birla Navya Others

~50 acres ~20 acres ~47 acres ~8 acres

Source: Company, Nuvama Wealth Research

Exhibit 17: Average prices (INR/sq. ft.)

Developer Project Type Category Location Remarks

Site Area Location Land parcel (acres)

Key ongoing projects; saleable area/estimated GDV — 2.26mn sq. ft./INR3,254cr

Anant Raj Estate

Exhibit 18: Summary of ongoing projects

Anant Raj Estate

Key forthcoming projects; saleable area/estimated GDV — 5.46mn sq. ft./INR7,974cr

Anant Raj Estate

Birla Navya (Phase IV)

Anant Raj Ashray II — Tirupati

Exhibit 20: Summary of forthcoming projects

Project Planned launch date H2FY24E FY25E FY26E FY27E Total

Anant Raj Estate

Project Planned launch date H2FY24E FY25E FY26E FY27E Total

Anant Raj Estate

Pre-sales value (INR cr) Pre-sales area (mn sq. ft.)

Source: Company, Nuvama Wealth Research