Target: ₹1,080
CMP: ₹737.85
We believe that Anant Raj’s (ARCP) entry into cloud operations can be an inflection point for the company, which is looking to further move up the chain from its core colocation business in the Data Centre vertical. While capex intensity goes up in this model, the revenue potential is many folds that of colocation (ARCP guidance for colocation – ₹10 crore/MW, cloud – ₹150 crore/MW).
The success of the 0.5MW cloud pilot project paves the way for ARCP to further add capacity, in collaboration with Orange Business, a global system integrator. Global public cloud spending was $632 billion in CY23 and is expected to rise at a 19 per cent CAGR until CY29. India’s public cloud spending is expected to rise from $8 billion in CY23 to $30 billion in CY29, at a CAGR of 25 per cent.
We believe the TAM for ARCP is substantial, particularly in a market dominated by global cloud providers, as government and enterprises move towards data localisation and sovereignty. We have incorporated cloud business valuation and revised the valuation of residential projects factoring in increased visibility over projects beyond FY30, driven by the addition of land parcels; our TP rises to ₹1,080 (from ₹620.