– Anant Raj Limited

Anant Raj Limited (ARL) Q2 FY25 Earnings Call Summary

Record-breaking results: Best quarter and half-year in ARL history, with robust growth in revenue, EBITDA and profitability.
Revenue growth: Revenue for Q2 FY25 was INR 524 crores, a 54% increase compared to Q2 FY24. H1 FY25 revenue grew 51% over H1 FY24.
EBITDA growth: EBITDA for Q2 FY25 was INR 124 crores, up 40% year-on-year. H1 FY25 EBITDA rose 49% compared to the previous year.
Profit after tax (PAT): PAT for Q2 FY25 was INR 106 crores, a remarkable 75% year-on-year growth. H1 FY25 PAT increased by 78%.
Debt reduction: Net debt reduced by INR 124 crores in Q2 FY25 compared to Q1 FY25. Outstanding net debt is INR 95 crores as of September 30, 2024.
Rental income (excluding data centers): INR 12.5 crores for Q2 FY25.
Data center revenue: INR 8 crores for Q2 FY25.
Projected Cloud revenue: INR 150 crores per year per megawatt for Infrastructure as a Service (IaaS).

Data center progress: 6 megawatts of IT load operational at the Manesar facility; work on 21 megawatts progressing rapidly. Targeting 28 megawatts IT load at Manesar and Panchkula by the end of FY25.
Cloud services launch: Launched “Ashok Cloud”, offering IaaS. Plans to expand to Platform as a Service (PaaS) and Software as a Service (SaaS) in the future.
Land acquisition: Acquired 20 acres of land in Gurgaon, enhancing real estate development portfolio.
Real estate projects: Construction commenced for “Estate Residences” group housing project and affordable housing in Tirupati. Phase 1 delivery of the JV project with Birla has started.
Zero-debt target: On track to achieve a net debt-free status by the end of the next quarter.
Fundraising plans: Proposed fundraising of INR 2,100 crores (INR 100 crores from promoters and INR 2,000 crores from the market) primarily for the data center business.

Data center expansion: Targeting 63 megawatts capacity by FY26, with 14 megawatts dedicated to cloud services.
Focus on cloud services: Expanding cloud offerings beyond IaaS to PaaS and SaaS.
Continued growth in real estate: Launching 1.8 million square feet of real estate projects this year, with plans for commercial development and leasing.
Increase in rental income: Aiming to triple commercial rental income in the next two years.
Delhi land development: Holding 101 acres in Delhi, awaiting the new master plan before initiating development.

Competition in the data center market: ARL needs to differentiate itself from existing and new players in the rapidly growing data center and cloud services market.
Attracting and retaining skilled talent: ARL will need to secure a qualified workforce to support its ambitious expansion plans, particularly in the data center and cloud division. This information is not explicitly stated in the sources and you may want to verify it independently.
Managing the transition to a two-division company: Balancing the growth of both the real estate and technology divisions will require effective resource allocation and strategic decision-making. This information is not explicitly stated in the sources and you may want to verify it independently.
Navigating regulatory and legal complexities: The data center and real estate industries are subject to various regulations and permits, requiring ARL to stay informed and compliant. This information is not explicitly stated in the sources and you may want to verify it independently.
Managing debt levels: While ARL is on track to become debt-free, the proposed fundraising for data center expansion could increase leverage, requiring careful financial management. This information is not explicitly stated in the sources and you may want to verify it independently.

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