Anant Raj Limited Best Data Center Stocks India
Investors who want to invest in datacenter stocks in India but worried about the elevated valuations, they need to understand the broader data center market in India and its future growth potential.
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Anant Raj Limited Best Data Center Stocks India
Despite the fall in the broader market during the month of October 2024, Anant Raj Limited, one of the best Indian data center stocks, shown resilient and defy the broader market with a strong support at 700 level. The company has been a consistent performer over the year with over 100% return from around 300 level in January 2024 to 700 level in October 2024.
The market cap of Anant Raj limited is ₹ 24,307 Cr. Trading at 80 PE with EPS is over ₹9. The company’s ROCE and ROE is less than 10%.
The company has reported strong earnings and laying out strong guidance for the year ahead.
Anant Raj global share price
Though the valuation is expensive at present, I’m bullish on ANANTRAJ as a data center stock based on the growth potential of the data center industry in India, potential of real estate growth after changing the interest rate cycle, and strong forward guidance of the company. This is one of the best NSE listed data center companies in India.
However, the valuation is a concern for me as well and hence I will wait for a strong correction in the stock price to enter in this data center stock India.
Please note that this is not a recommendation. Please do your own due diligence before investing in any financial asset.
Why I am bullish in Data Center Stocks in India
India’s booming digital economy is expected to increase demand for data storage and processing, making the data center market one of the most attractive industries for investors in India. As global players race to expand their data infrastructure, Anant Raj Limited, a well-established real estate developer, has positioned itself as a cost-effective and strategic way to tap into this high-growth market.
With the rapid rise in cloud computing, AI, 5G technology, and the Indian government’s emphasis on data localization, the data center industry is poised for exponential growth. According to estimates, the Indian data center market is expected to grow at a compound annual growth rate (CAGR) of around 20% over the next 5 years
Anant Raj’s Entry into the Data Center Market
Anant Raj Limited, a company traditionally known for its real estate ventures in the National Capital Region (NCR), has forayed into the data center industry in 2022. With its vast land bank and existing infrastructure, the company has a competitive edge in entering this high-growth sector at a lower cost.
The company plans to convert its existing IT park space of 4 million square feet into a 157 MW data center, with the potential to expand up to 307 MW in the future.
Anant Raj entered the data center business and commissioned Phase 1 of a 3MW data center at Manesar and plans to add another 3 MW in FY25.
These projects not only position Anant Raj as a key player in the Indian data center landscape but also offer investors a cost-effective entry into the sector.
Anant Raj’s strategic focus on data centers, coupled with its existing infrastructure and industry expertise, positions the company to capitalize on the growth of the Indian data center market and contribute to the country’s digital transformation.
Low-Cost Advantage for Anant Raj Data Centers
One of Anant Raj’s key strengths lies in its ability to leverage its existing real estate assets for data center development. Unlike other companies that need to acquire new land at higher prices, Anant Raj has fully paid-up land in prime locations, including Manesar, Rai, and Panchkula.
This allows the company to develop data centers at a lower cost compared to competitors, translating into higher margins and potentially greater returns for investors.
Additionally, the company’s strategic location in NCR, a major IT and business hub, further boosts its attractiveness. The lower operational costs and fully-owned infrastructure provide Anant Raj a competitive advantage in offering cost-effective data solutions to businesses
Strong Financial Performance
Anant Raj has witnessed a robust financial health, recording a profit after tax (PAT) of ₹265.93 crore in FY2023-24, the highest in 15 years. The company’s focus on reducing debt – with a target of becoming net debt-free by December 2024 – further helps the investors to consider this as a stable investment.
The funds raised through a Qualified Institutional Placement (QIP) of ₹500 crore have been used to retire debt and strengthen the company’s balance sheet, placing it in a strong position for future growth.
Strategic Partnerships and Government Support
Anant Raj’s partnerships with key government agencies, such as RailTel Corporation and Telecommunications Consultants India (TCIL), for data center and cloud services provide a strong foundation for its growth in the data center space in India.
These collaborations ensure that Anant Raj benefits from government support and initiatives, further reducing operational risks.
Anant Raj Data Center Activities and Future Plans
Anant Raj Limited is currently engaged in real estate industry and data center activities. The company has plans for significant expansion over next couple of years. Lets us analyse its current data centers and future plans.
Current Data Center Activities
- Anant Raj has a 3 MW data center that is completed and operational in Manesar. Another 3 MW was completed in May 2024 and will be operational in FY25.
- The company plans to expand this facility to a total capacity of 50 MW.
- Anant Raj is also in the process of converting part of its existing structure in Panchkula into a 7 MW data center. This project is expected to be completed by Q3 of the 2024-2025 fiscal year.
Future Data Center Plans
- The company plans to expand its total data center capacity to 307 MW within the next 4 to 5 years.
- This will involve adding 200 MW of IT load at its facility in Rai, 57 MW at Panchkula, and scaling the Manesar facility to 50 MW.
- The company will achieve an operational capacity of 21 MW by December 2024, with 28 MW operational by the end of the 2024-2025 fiscal year.
- Anant Raj will upgrade its existing building in Rai to a 100 MW Tier III data center and add another 100 MW through greenfield expansion.
- The company’s data center in Panchkula will also see a greenfield expansion to develop a 50 MW facility.
- Anant Raj has received TIA-942 Rated 3 certification from the Telecommunications Industry Association for its Manesar data center, demonstrating its commitment to high standards.
What Experts Says about Anant Raj Data Center Stock
What makes Anant Raj Data Center Stock a Compelling Opportunity for Investors
For investors looking to capitalize on the growing demand for data centers in India, Anant Raj Limited offers a unique, low-cost opportunity. Its strategic use of existing real estate, coupled with a strong financial position and government-backed partnerships, makes it one of the best data center stocks to invest sepcifically for those seeking exposure to India’s rapidly expanding digital infrastructure.
With the data center industry set to grow exponentially, Anant Raj’s focus on this sector positions it as a strong contender for long-term investment. As the company expands its data center capacity and reduces its debt, the stock offers a cost-effective way to invest in one of the fastest-growing sectors in India.
Let us briefly summarize the company’s potential as a data center company in India.
- Anant Raj benefits from a first-mover advantage in the Indian data center market.
- The company has existing infrastructure and permits in place at its IT Parks in Manesar, Rai, and Panchkula, providing a cost advantage and faster time to market.
- Anant Raj possesses a large land bank, allowing for future expansion and development.
- The company is committed to developing sustainable data centers, incorporating renewable energy sources and energy-efficient technologies.
- Anant Raj’s strategic focus on data centers, coupled with its existing infrastructure and industry expertise, positions the company to capitalize on the growth of the Indian data center market and contribute to the country’s digital transformation.
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