Nomura cut the price target on Anant Raj to Rs 650 from Rs 700, while maintaining a ‘Buy’ rating. The new price target implies over 22% upside from the closing price on June 23. The brokerage house has slashed the target on the back of delayed cloud revenue generation, postponed residential launches, and many other factors.
Delayed cloud revenue generation
The ramp-up of cloud capacity is slower than expected because customer testing and handovers are taking longer than anticipated. Specifically, rentals for the new 1.5MW cloud capacity are now projected to begin in Q2 FY27 rather than the previous estimate of end-FY26.
Postponed residential launches
Key residential project launches, such as the Luxury Group Housing 2 (GH2) project, have been delayed. Previously expected in FY26, the launch is now likely to occur in Q2 FY27.
“Previously, we had expected ARCP’s Group Housing 2 (GH2) project to be launched at the end of FY26. As of now, licence and other approvals have been received, and ARCP expects RERA approval by the end of Q1 FY27,” said Nomura.
Moderated capacity projections
Nomura has reduced its forecast for annual cloud capacity additions. The firm now factors in a more moderate addition of 3 MW per year, down from the previous estimate of 4 MW.
Lower expected cloud revenue mix
The anticipated contribution of the cloud segment to the overall data centre business has been revised downward to 10-11%, compared to the earlier forecast of 13-14%. This revised estimate is also significantly lower than management’s guidance of a 25% cloud mix.
Also, due to the slower-than-expected execution in both the cloud and residential segments, Nomura cut its EPS estimates for FY27 and FY28 by 8% and 10%, respectively.
Anant Raj share price performance
The share price of Anant Raj has changed a little in the last five trading sessions. The stock has surged 3% in the past one month. However, the stock has fallen 5.66% in the last six months. Anant Raj’s share price has declined 8% over the previous 12 months.
Anant Raj Q4FY26
The company reported an increase of 23.6% year-on-year in consolidated net profit to Rs 146.6 crore for the fourth quarter, compared with Rs 118.6 crore in the same period last year. The revenue from operations surged 19.6% YoY to Rs 646.8 crore as against Rs 540.7 crore a year earlier.
On the operating front, EBITDA rose 17.6% YoY to Rs 167.4 crore in Q4FY26 from Rs 142.4 crore in the corresponding quarter of the previous year. EBITDA margin stood at 25.9% compared with 26.3% a year earlier.
For FY26, revenue from operations advanced 21.92% YoY to Rs 2,511.60 crore.