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Anant Raj Industries (CMP: `134/ TP: `178/ Upside: 33%)
�� Almost all of ARIL's land bank (1,000 acres) is exclusively located in the NCR within
50km of Delhi, with approximately 525 acres in Delhi. This land bank has been
acquired at an historical average cost of `300/sq ft.
�� We expect ARIL's residential projects to drive its near-term operational visibility and
help register `600cr Profit over the next three years. ARIL recently launched two
residential projects in NCR; Kapashera (0.28mn sq. ft.) and Manesar (1mn sq. ft.)
for `5,000/sq. ft. and `2,500/sq. ft., respectively. The management has also
indicated that the Huaz Khas project is back on track and is expected to be
launched soon after Diwali. Further, we expect ARIL’s Manesar and Kirti Nagar
properties to reach their peak occupancy levels in 6–9 months as leasing activity
improves coupled with five hotels getting operational by FY2011E. Consequently,
we expect ARIL to report rental income of `201cr in FY2012E as compared to
`49cr reported in FY2010.
�� ARIL is trading at a 36% discount to its NAV. The stock is trading at 9.7x FY2012E
EPS and 1.0x FY2012E P/BV and hence we maintain a Buy on stock with a Target
Price of `178 (15% discount to our one-year forward NAV).
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