Anant Raj Stock May Rise 43%: Motilal Oswal Sets New Target of Rs 807

Anant Raj Shares Seen Rising 43% Despite Recent Decline; Motilal Oswal Sets New Target of Rs 807

Anant Raj Limited, a company operating in the real estate and data center sectors, has had a challenging year in the stock market. As of late July 2025, its shares have fallen approximately 32.45% year-to-date, reflecting volatility and investor concerns.

However, leading brokerage firm Motilal Oswal remains confident about the company’s long-term prospects and has placed a bullish bet on the stock.

Despite lowering its target price from Rs 1,085 to Rs 807, Motilal Oswal believes the stock has the potential to rise around 43% from current levels.

The firm has maintained its ‘buy’ rating on Anant Raj, signaling strong confidence in the company’s business fundamentals and growth trajectory.

Recent Quarterly Performance Bolsters Confidence

The latest optimism from Motilal Oswal follows Anant Raj’s release of its financial results for the first quarter of the fiscal year (April-June 2025).

The company reported revenue of Rs 590 crore during this period, representing a solid 26% year-on-year increase and a 10% growth compared to the previous quarter.

This performance was notably above the brokerage’s expectations, which has further strengthened the positive outlook on the stock.

Strong revenue growth in the current environment is particularly noteworthy given the broader challenges facing the real estate sector, including interest rate pressures, regulatory hurdles, and a cautious buyer sentiment.

Anant Raj’s ability to grow sales and revenue signals operational resilience and effective execution of its business strategies.

Residential Segment: The Backbone of Future Profitability

One of the key pillars of Motilal Oswal’s positive view on Anant Raj lies in its residential real estate segment.

The brokerage estimates that between 2025 and 2030, Anant Raj will deliver approximately 14 million square feet of saleable residential space.

This is a substantial development pipeline that positions the company to benefit from the improving housing demand across India.

The brokerage forecasts that this volume of sales will generate a total net operating profit after tax (NOPAT) of around Rs 7,200 crore over the five-year period.

This profit is expected to be a major driver of earnings growth and cash flow generation for the company.

To value this segment, Motilal Oswal applied a discounted cash flow (DCF) model using an 11.6% weighted average cost of capital (WACC) and a 5% terminal growth rate, resulting in an estimated gross annual value of Rs 8,700 crore. This translates to about Rs 253 per share attributable to the residential business.

Besides, the company’s annuity business — which typically includes recurring revenue streams from leases and other long-term contracts — was also valued separately.

Using a capitalization rate of 9.5%, this segment was valued at Rs 100 crore, equivalent to Rs 30 per share. Combined, these valuations underscore the substantial intrinsic value of Anant Raj’s core real estate assets.

Rapid Growth Potential in Data Center Business

Perhaps the most exciting aspect of Anant Raj’s growth story lies in its data center business, which Motilal Oswal views as a high-potential segment for the company in the coming years.

With the digital economy booming and cloud computing adoption accelerating, demand for data center infrastructure is skyrocketing globally — and India is no exception.

Currently, Anant Raj’s data center capacity stands at around 6 megawatts (MW) as of fiscal year 2024. Motilal Oswal projects this capacity to expand dramatically to 307 MW by FY 2032, driven by strong demand from cloud service providers, enterprises, and hyperscalers.

Furthermore, the cloud services component of the business, currently contributing only 0.5 MW, is expected to surge to 77 MW by 2032.

The brokerage firm modeled free cash flows from the data center business through FY 2032, using an 11.6% discount rate, 3% annual rental escalation, and 3% terminal growth rate.

Based on this, the enterprise value of the data center segment is estimated at Rs 14,900 crore or Rs 435 per share. This valuation reflects the strategic importance and expected rapid growth trajectory of this segment.

Market Reaction and Valuation Metrics

On Tuesday, July 28, 2025, Anant Raj shares gained roughly 2.7%, closing at Rs 578.30, signaling some renewed investor interest.

However, even with this recent uptick, the stock remains down about 32.45% year-to-date, highlighting the cautious sentiment among market participants.

When viewed against the backdrop of Motilal Oswal’s revised target price of Rs 807, the stock still has considerable upside potential of approximately 43%.

This makes Anant Raj an attractive investment opportunity for investors willing to look beyond short-term market fluctuations and focus on long-term value creation.

Why the Price Target Was Reduced

It is important to understand why Motilal Oswal reduced its price target from Rs 1,085 to Rs 807 despite maintaining a ‘buy’ rating.

The cut primarily reflects a more conservative valuation approach amid uncertain macroeconomic conditions and sector-specific headwinds.

Interest rate hikes, slower-than-expected project execution, or delays in regulatory approvals could temper near-term earnings growth.

Additionally, market volatility and concerns over broader economic growth might have contributed to a more cautious stance on valuation multiples.

However, the underlying business fundamentals remain strong, and the long-term growth drivers — particularly the data center expansion and residential delivery pipeline — provide a solid base for the company’s future.

Broader Industry and Market Context

Anant Raj operates at the intersection of two critical and rapidly evolving industries: real estate and data centers.

The Indian real estate market has been gradually recovering from a multi-year slowdown, with increased demand driven by urbanization, affordable housing schemes, and rising incomes.

On the other hand, the data center industry is in the midst of a boom fueled by digital transformation, cloud adoption, and increasing data localization policies by the government.

India’s data center market is expected to grow at a compounded annual growth rate (CAGR) of over 20% through the decade, making it one of the fastest-growing segments in the infrastructure space.

Anant Raj’s dual presence in these sectors provides it with diversified revenue streams and growth opportunities, which can help mitigate sector-specific risks.

The company’s focus on expanding data center capacity also aligns with national priorities to build robust digital infrastructure, potentially unlocking regulatory and policy support.

Risks and Considerations

While the prospects look promising, investors should also be mindful of potential risks. Execution risks, especially related to timely project completion in both residential and data center segments, could impact cash flows and profitability.

Regulatory changes, interest rate fluctuations, and broader macroeconomic uncertainties remain challenges.

The data center business, while high-growth, is capital-intensive and requires efficient management of costs and partnerships. Competition from other established players in the sector could also impact pricing and margins.

Final Thoughts: A Compelling Long-Term Investment Case

Despite near-term challenges and a cautious revision of its target price, Motilal Oswal’s sustained ‘buy’ recommendation on Anant Raj highlights the company’s strong fundamentals and attractive long-term growth prospects.

With a potential upside of about 43% from current levels, Anant Raj offers investors exposure to India’s recovering real estate market and booming data center sector.

Key takeaways include:

• Robust revenue growth in the latest quarter exceeding expectations
• Significant residential sales pipeline with strong profit potential
• Rapidly expanding data center capacity positioned to capitalize on digital infrastructure demand
• Reasoned valuation approach balancing optimism with macroeconomic realities

For investors seeking growth in emerging infrastructure segments with diversified revenue streams, Anant Raj presents an intriguing proposition as it navigates the evolving landscape of India’s real estate and technology infrastructure sectors.