With a market capitalisation of ₹22,001 crores and trading at ₹621.90 as of November 7, 2025, Anant Raj finds itself in an interesting position—delivering strong fundamentals whilst grappling with valuation concerns that have kept institutional investors cautious. The company's P/E ratio of 48.61x significantly exceeds the sector average of 43x, raising questions about whether the premium is justified given the current market environment.
The quarter's standout performance showcases Anant Raj's ability to capitalise on improving demand in the Delhi-NCR real estate market. Net sales reached an all-time quarterly high of ₹630.79 crores, marking sequential growth of 6.48% from Q1 FY26's ₹592.41 crores and impressive year-on-year expansion of 23.00% from ₹512.85 crores in Q2 FY25. This sustained revenue momentum reflects robust project execution and strong booking momentum across the company's portfolio.
Financial Performance: Margin Expansion Drives Bottom-Line Growth
Anant Raj's financial performance in Q2 FY26 demonstrates the company's operational efficiency and pricing power. Operating profit before depreciation, interest, and tax (excluding other income) surged to ₹167.84 crores, representing a substantial 26.61% margin—the highest quarterly operating margin in recent history. This marks a significant improvement from 21.99% in Q2 FY25, reflecting better project mix, improved realisations, and effective cost management.
| Quarter | Revenue (₹ Cr) | QoQ Change | YoY Change | Net Profit (₹ Cr) | Operating Margin |
|---|---|---|---|---|---|
| Sep'25 | 630.79 | +6.48% | +23.00% | 138.12 | 26.61% |
| Jun'25 | 592.41 | +9.57% | +25.56% | 125.88 | 25.43% |
| Mar'25 | 540.65 | +1.12% | +22.16% | 118.64 | 26.33% |
| Dec'24 | 534.64 | +4.25% | — | 110.32 | 24.98% |
| Sep'24 | 512.85 | +8.69% | — | 105.58 | 21.99% |
| Jun'24 | 471.83 | +6.61% | — | 91.00 | 21.82% |
| Mar'24 | 442.59 | — | — | 78.33 | 23.58% |
The company's profit after tax (PAT) margin expanded to 21.70% in Q2 FY26, up from 20.36% in the corresponding quarter last year. This 134 basis point improvement demonstrates Anant Raj's ability to convert top-line growth into bottom-line gains. The consolidated net profit of ₹138.12 crores represents sequential growth of 9.72% from Q1 FY26's ₹125.88 crores, indicating sustained momentum across quarters.
On a half-yearly basis (H1 FY26), Anant Raj has delivered exceptional performance. The company's net sales for the six-month period reached ₹1,223.20 crores, whilst consolidated net profit stood at ₹264.00 crores. This strong H1 performance positions the company well to potentially exceed its FY25 full-year net sales of ₹2,059 crores and net profit of ₹421 crores, assuming the momentum continues through the second half of the fiscal year.
Key Financial Metrics - Q2 FY26
Revenue Growth: Net sales grew 23.00% YoY to ₹630.79 crores, marking the seventh consecutive quarter of year-on-year revenue growth.
Profitability: PAT margin improved to 21.70%, up from 20.36% in Q2 FY25, reflecting operational leverage and better project mix.
Interest Coverage: EBIT to interest ratio remained robust at 14.78x on average, indicating comfortable debt servicing capability.
Operational Excellence: Margin Expansion Amidst Controlled Costs
Anant Raj's operational performance in Q2 FY26 showcases disciplined cost management and operational efficiency. Employee costs remained well-contained at ₹8.97 crores, representing just 1.42% of net sales—a marginal increase from ₹5.11 crores (0.99% of sales) in Q2 FY25. This controlled personnel expense growth, despite significant revenue expansion, reflects operational leverage and efficient resource utilisation.
Interest costs declined dramatically to ₹2.87 crores in Q2 FY26 from ₹1.51 crores in Q2 FY25, though this represents an increase from Q1 FY26's ₹2.37 crores. The company's debt reduction efforts are evident in its balance sheet, with long-term debt declining from ₹467.38 crores in FY24 to ₹389.20 crores in FY25. This deleveraging has improved the company's financial flexibility and reduced interest burden over time.
Depreciation charges increased to ₹10.64 crores in Q2 FY26 from ₹8.08 crores in Q2 FY25, reflecting capital investments in fixed assets. The company's fixed asset base grew from ₹71.03 crores in FY24 to ₹105.14 crores in FY25, indicating ongoing investments in infrastructure and operational capabilities. Despite these investments, the company maintained strong cash generation, with operating cash flow reaching ₹96.00 crores in FY25.
⚠️ Return on Capital Efficiency: A Key Concern
Whilst Anant Raj has demonstrated strong revenue and profit growth, the company's return on capital employed (ROCE) remains a concern. The average ROCE over recent years stands at just 4.60%, significantly below industry benchmarks. The latest ROCE of 10.74% shows improvement, but the company still has considerable ground to cover to match peers. This weak capital efficiency suggests that the company is deploying significant capital to generate growth, which may limit long-term value creation if not addressed.
Similarly, return on equity (ROE) averaged 5.09% over recent years, though the latest ROE of 10.23% represents meaningful improvement. Higher ROE would indicate better capital efficiency and profitability, which remains an area requiring management focus.
Real Estate Dynamics: Riding the NCR Recovery Wave
Anant Raj's strong performance comes against the backdrop of a recovering Delhi-NCR real estate market. The company has successfully capitalised on improving residential demand and commercial leasing activity in the region. The real estate sector has witnessed a shift towards quality developers with established track records, benefiting established players like Anant Raj.
The company's project portfolio spans residential, commercial, and hospitality segments, providing diversification benefits. This multi-segment approach has helped Anant Raj navigate market cycles more effectively than pure-play residential developers. The company's land bank and strategic location advantages in Gurgaon and surrounding areas position it well to capture future growth opportunities.
However, the real estate sector faces headwinds from rising interest rates, regulatory changes, and potential demand moderation. The sector's cyclical nature means that current strong performance may not be sustainable indefinitely. Investors must consider these sector-specific risks when evaluating Anant Raj's prospects.
Industry Leadership: How Anant Raj Compares to Peers
| Company | P/E Ratio | P/BV Ratio | ROE % | Div Yield | Debt/Equity |
|---|---|---|---|---|---|
| Anant Raj | 48.61 | 5.38 | 5.09% | 0.11% | 0.03 |
| Knowledge Realty | 156.75 | 24.93 | 0.00% | — | 8.44 |
| Embassy Office REIT | 133.44 | 0.18 | 1.89% | 0.12% | 0.21 |
| Mindspace Business | 54.36 | 0.21 | 2.74% | 5.46% | 0.23 |
| Nexus Select | 50.96 | 0.18 | 1.91% | 4.91% | 0.03 |
| Brigade Enterprises | 30.07 | 0.37 | 6.29% | 0.26% | -0.20 |
Anant Raj's peer comparison reveals a mixed picture. The company trades at a P/E ratio of 48.61x, which is higher than Brigade Enterprises (30.07x) and Nexus Select (50.96x) but significantly lower than REITs like Embassy Office (133.44x) and Knowledge Realty (156.75x). This positioning suggests that whilst Anant Raj commands a premium to traditional developers, it trades at a discount to REIT structures.
The company's ROE of 5.09% is higher than most REIT peers but lower than Brigade Enterprises' 6.29%. This moderate ROE, combined with minimal leverage (debt-to-equity of 0.03), indicates that Anant Raj has room to improve capital efficiency. The company's dividend yield of 0.11% is amongst the lowest in the peer group, reflecting a strategy of retaining earnings for growth rather than distributing cash to shareholders.
Anant Raj's price-to-book ratio of 5.38x is substantially higher than most peers, suggesting that the market ascribes significant value to the company's land bank and future development potential. However, this premium valuation also implies limited margin of safety for investors at current levels.
Valuation Analysis: Premium Pricing with Limited Upside
Anant Raj's current valuation presents a challenging proposition for investors. The stock trades at a P/E ratio of 48.61x based on trailing twelve-month earnings, representing a significant premium to the sector average of 43x. This elevated multiple reflects market expectations of sustained growth, but also leaves little room for disappointment.
The company's EV/EBITDA multiple of 41.75x is particularly stretched, indicating that investors are paying a high price for each rupee of operating profit. Similarly, the EV/Sales ratio of 10.33x suggests aggressive pricing relative to revenue generation. These metrics collectively point to a valuation that has run ahead of fundamentals.
| Metric | Value | Assessment |
|---|---|---|
| P/E Ratio (TTM) | 48.61x | Premium to sector (43x) |
| Price to Book | 5.38x | Elevated |
| EV/EBITDA | 41.75x | Very Expensive |
| EV/Sales | 10.33x | Rich valuation |
| Dividend Yield | 0.11% | Minimal income |
| PEG Ratio | 1.08x | Fair growth-adjusted |
The stock's 52-week range of ₹366.15 to ₹947.25 illustrates the volatility inherent in the counter. Currently trading at ₹621.90, the stock is 34.35% below its 52-week high, suggesting significant downside risk if market sentiment deteriorates. The stock's beta of 1.35 indicates higher volatility than the broader market, amplifying both gains and losses.
Anant Raj's valuation grade of "Very Expensive" has persisted since early 2023, with brief periods of downgrade to "Expensive". This sustained premium valuation reflects market optimism about the company's growth prospects but also signals caution for value-conscious investors. The company's fair value estimate based on fundamental analysis suggests limited upside from current levels, with the risk-reward balance tilted towards caution.
"Whilst Anant Raj's operational performance remains impressive, the stock's stretched valuation multiples and weak return ratios present a challenging entry point for fresh investors seeking margin of safety."
Shareholding Pattern: Stable Promoter Base, Declining Institutional Interest
| Category | Sep'25 | Jun'25 | Mar'25 | QoQ Change |
|---|---|---|---|---|
| Promoter | 60.12% | 60.12% | 60.16% | 0.00% |
| FII | 10.72% | 10.61% | 12.88% | +0.11% |
| Mutual Funds | 4.28% | 4.46% | 4.95% | -0.18% |
| Insurance | 1.36% | 1.55% | 1.36% | -0.19% |
| Other DII | 0.19% | 0.21% | 0.26% | -0.02% |
| Non-Institutional | 23.33% | 23.04% | 20.39% | +0.29% |
Anant Raj's shareholding pattern reveals a stable promoter base holding 60.12% of equity, with no change in the September 2025 quarter. This unwavering promoter commitment, coupled with zero pledging of shares, provides confidence in management's long-term conviction in the business. The promoter group includes key family members of the Sarin family, who have built the business over decades.
However, institutional investor activity tells a more cautious story. Foreign institutional investors (FIIs) reduced their stake from 12.88% in March 2025 to 10.72% in September 2025, representing a significant 2.16 percentage point decline over two quarters. Whilst FII holding ticked up marginally by 0.11% in Q2 FY26, the overall trend suggests profit-booking by foreign investors at elevated valuations.
Mutual fund holdings have similarly declined from 4.95% in March 2025 to 4.28% in September 2025, indicating reduced domestic institutional appetite. Insurance companies also trimmed positions, with holdings falling from 1.55% to 1.36% quarter-on-quarter. This collective institutional selling pressure, totalling over 2.5 percentage points in six months, reflects concerns about valuation stretch and sector outlook.
Non-institutional investors have increased their stake from 20.39% in March 2025 to 23.33% in September 2025, absorbing shares sold by institutions. This shift from institutional to retail ownership could increase stock volatility and reduce liquidity support during market corrections.
Stock Performance: Significant Underperformance Amidst Market Rally
| Period | Anant Raj Return | Sensex Return | Alpha |
|---|---|---|---|
| 1 Week | -3.45% | -0.86% | -2.59% |
| 1 Month | -15.54% | +1.57% | -17.11% |
| 3 Months | +13.78% | +3.22% | +10.56% |
| 6 Months | +38.45% | +3.06% | +35.39% |
| Year-to-Date | -27.23% | +6.50% | -33.73% |
| 1 Year | -16.91% | +4.62% | -21.53% |
| 2 Years | +152.45% | +28.14% | +124.31% |
| 3 Years | +443.62% | +36.01% | +407.61% |
Anant Raj's stock performance presents a tale of two narratives. Over longer time horizons, the stock has been a spectacular wealth creator, delivering returns of 443.62% over three years and an astounding 3,335.91% over five years. These multi-year returns far exceed benchmark indices, rewarding long-term investors handsomely.
However, recent performance has been disappointing. The stock has declined 16.91% over the past year, underperforming the Sensex by 21.53 percentage points. Year-to-date returns of -27.23% contrast sharply with the Sensex's 6.50% gain, indicating significant relative weakness. This underperformance has intensified in recent months, with the stock falling 15.54% in the past month alone whilst the Sensex gained 1.57%.
The stock's technical indicators reflect this weakness. Currently in a "Mildly Bullish" trend as of November 6, 2025, the stock trades below key moving averages including the 5-day, 20-day, 50-day, 100-day, and 200-day moving averages. This broad-based weakness suggests lack of buying support and potential for further downside if sentiment deteriorates.
The stock's high beta of 1.35 amplifies market movements, contributing to its 56.34% volatility over the past year. This elevated volatility, combined with negative risk-adjusted returns of -0.30, places the stock in the "High Risk Low Return" category over the one-year period. Investors must weigh the company's strong fundamentals against this challenging price action.
Investment Thesis: Quality Business at Stretched Valuation
Anant Raj's investment case rests on several strong pillars. The company has demonstrated consistent revenue growth, with net sales expanding at a five-year CAGR of 44.24% and operating profit growing at 51.44% annually. This growth trajectory reflects successful project execution, strong demand in key markets, and effective capital deployment.
The company's balance sheet has improved significantly, with debt declining from ₹1,410.84 crores in FY21 to ₹389.20 crores in FY25. This deleveraging has strengthened financial flexibility and reduced interest burden, improving profitability. The absence of promoter pledging further reinforces confidence in the company's financial health.
However, several factors temper enthusiasm. The company's return on capital employed (ROCE) of 4.60% on average and return on equity (ROE) of 5.09% remain weak by industry standards. Whilst recent quarters show improvement with ROCE reaching 10.74% and ROE touching 10.23%, these figures still lag best-in-class performers. Higher returns on capital are essential for long-term value creation.
Mojo Investment Score: 62/100 (HOLD)
Valuation: Very Expensive - Trading at premium multiples with limited upside
Quality: Average - Improving fundamentals but weak return ratios
Financial Trend: Positive - Strong quarterly momentum and margin expansion
Technical Trend: Mildly Bullish - Recent weakness but longer-term uptrend intact
Key Strengths & Risk Factors
✅ Key Strengths
Robust Revenue Growth: Five-year sales CAGR of 44.24% demonstrates strong market position and execution capability.
Margin Expansion: Operating margins improved to 26.61% in Q2 FY26, highest in recent quarters, reflecting pricing power and efficiency.
Deleveraging Success: Long-term debt reduced from ₹1,410.84 crores (FY21) to ₹389.20 crores (FY25), strengthening financial flexibility.
Zero Promoter Pledging: Stable 60.12% promoter holding with no pledged shares indicates strong management commitment.
Positive Operating Cash Flow: Generated ₹96.00 crores in FY25, demonstrating ability to convert profits into cash.
Strategic Location Advantage: Prime land bank in Delhi-NCR region positions company well for future growth.
Diversified Portfolio: Presence across residential, commercial, and hospitality segments reduces concentration risk.
⚠️ Key Concerns
Weak Return Ratios: Average ROCE of 4.60% and ROE of 5.09% significantly below industry benchmarks, indicating poor capital efficiency.
Premium Valuation: P/E of 48.61x and EV/EBITDA of 41.75x leave limited margin of safety and upside potential.
Institutional Selling: FII and mutual fund holdings declined by over 2.5 percentage points in six months, signalling caution.
Recent Price Weakness: Stock down 16.91% over past year, underperforming Sensex by 21.53 percentage points.
High Volatility: Beta of 1.35 and 56.34% volatility create significant price risk for investors.
Minimal Dividend Yield: 0.11% dividend yield provides negligible income, with low 5.89% payout ratio.
Sector Cyclicality: Real estate sector vulnerability to interest rates, regulatory changes, and economic cycles.
Outlook: What to Watch
Positive Catalysts
Sustained Revenue Momentum: Continued quarterly sales growth above 20% YoY would validate current growth trajectory.
ROCE Improvement: Sustained ROCE above 12% would address capital efficiency concerns and support valuation.
New Project Launches: Successful launch and booking momentum in new projects could drive next phase of growth.
Market Share Gains: Outperformance versus sector peers in project execution and sales velocity.
Institutional Buying Return: Reversal of FII/MF selling trend would provide price support and validation.
Red Flags
Margin Compression: Any decline in operating margins below 24% would signal pricing pressure or cost inflation.
Debt Increase: Reversal of deleveraging trend or increase in debt-to-equity ratio above 0.10.
Booking Slowdown: Deceleration in booking momentum or project delays would impact revenue visibility.
Continued Institutional Exit: Further reduction in FII/MF holdings below 13% combined would pressure stock price.
Sector Headwinds: Broader real estate sector weakness from interest rate hikes or regulatory changes.
The Verdict: Quality Business Trapped in Valuation Premium
Score: 62/100
For Fresh Investors: Avoid initiating positions at current levels. Whilst Anant Raj demonstrates strong operational performance and growth momentum, the stock's premium valuation (P/E 48.61x, EV/EBITDA 41.75x) offers limited margin of safety. The recent institutional selling and price weakness suggest a wait-and-watch approach is prudent. Consider accumulation only on significant corrections towards ₹500-550 levels, which would provide better risk-reward.
For Existing Holders: Continue holding but avoid adding at current prices. The company's improving fundamentals, margin expansion, and strong project execution justify maintaining positions accumulated at lower levels. However, consider booking partial profits if the stock rallies towards ₹700-750 levels. Monitor quarterly results closely for any signs of margin pressure or booking slowdown, which would warrant reassessment.
Fair Value Estimate: ₹550-600 (11.5% downside to 3.5% downside from current levels)
Note- ROCE= (EBIT - Other income)/(Capital Employed - Cash - Current Investments)
⚠️ Investment Disclaimer
This article is for educational and informational purposes only and should not be construed as financial advice. Investors should conduct their own due diligence, consider their risk tolerance and investment objectives, and consult with a qualified financial advisor before making any investment decisions. Past performance is not indicative of future results. The author and publisher assume no responsibility for investment decisions made based on this analysis.
