Multibagger Stock: Anant Raj gained over 2000% in 6 years; should investors buy now?

Investing in the stock market has long been recognised as a pathway to potential wealth creation. One of the fundamental principles of investing in the stock market is the importance of time. The ability to identify and hold onto promising stocks over an extended period of time can yield significant returns.

Anant Raj, a leading real estate developer in the NCR region, was one such stock in this regard that produced a whopping return over six years. From a trading price of just ₹15 apiece six years ago, the stock has seen a remarkable rise of 2340% to trade at the current level of ₹487.

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Notably, Anant Raj has consistently closed the last four calendar years with gains and has continued its bullish trend in the current year, recording a 65% increase so far. It achieved remarkable returns in CY21 and CY23, with gains of 186% and 164%, respectively.

Over the past 24 months, the stock has closed 21 months in positive territory, demonstrating consistent growth. During this period, it has surged from ₹51 apiece to its current value, marking an impressive gain of 855%.

Anant Raj has a fully paid land bank of 312 acres, of which, it holds 167 acres in the premium location of Golf Course Extension Road, Sector 63A, Gurugram.

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More rally ahead?

Despite such a strong rally in shares, domestic brokerage firm DAM Capital believes the stock still has plenty of steam to stretch further. In its latest note, the brokerage firm has initiated coverage on the stock with a target price of ₹620, which signals a solid 27% upside from the stock's previous closing price of ₹487 apiece.

The brokerage noted that the NCR has consistently demonstrated higher absorption rates than available supply in the last three years, driven by improved affordability and ongoing infrastructure projects that enhance connectivity.

Gurugram, in particular, dominates with a 51% market share of total units sold in 2022. The brokerage believes this upcycle has still more room to go, driven by changing preferences towards home ownership versus renting, a move towards branded developers and luxury segments, and favorable interest rates.

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According to the brokerage, the company boasts a robust pipeline of 9.1 million square feet across residential and commercial projects, including the fully booked Estate Residences in Gurugram's Sector 63A.

The brokerage expects the company's pre-sales to rise from ₹28 billion to ₹34 billion by FY26, with collections expected to increase from ₹9 billion to ₹26 billion. The company's residential portfolio has a total revenue potential of ₹150 billion, which the brokerage expects to be completed by FY30.

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In response to growing digital demand, the company is retrofitting its commercial buildings into data center-certified facilities, positioning itself competitively with a cost-effective and swift deployment strategy.

This initiative aims to scale up to 307 MW of data center capacity by FY28, valued at ₹102 billion. Additionally, Anant Raj's strategic land holdings and plans to develop 88 acres in Delhi further enhance its growth prospects, valued at ₹25 billion under the forthcoming Delhi Master Plan.

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With anticipated revenue and EBITDA growth, Anant Raj presents compelling growth opportunities in both residential development and data centers, said DAM Capital.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.