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Summary: A real-estate company's ambitious pivot into a high-growth sector looks compelling on paper. But between shifting timelines, murky arithmetic and patchy communication, the gap between promise and delivery is hard to ignore.
In our October 2024 issue of Wealth Insight, we covered in detail how Anant Raj was well-positioned to benefit from the growing demand for data centres in India.
The company had everything: land, buildings, permissions and power access, something that would be challenging for new players to build.
That edge still exists. Yet, there’s an air of pessimism surrounding Anant Raj’s execution. Delayed projects, missed timelines and unclear communication have all raised doubts about the company’s future prospects.
The ambition
In its Q4 FY24 concall, Anant Raj’s management stated that the company’s advantage did not just lie with low land costs, but also with time. Since it already owned land and buildings, Anant Raj could build data-centre capacity at about Rs 26 crore per MW, which could easily rise to Rs 40-50 crore per MW for new entrants. And the best part? Anant Raj could recover the investment within just three years.
Additionally, the management said that its co-location model, wherein Anant Raj would rent out its premises while the infrastructure would be managed by someone else, could generate Rs 90 lakh per MW every month in revenue (Rs 10.8 crore yearly), with an operating cost of Rs 15 lakh per MW per month (Rs 1.8 crore per annum). That leaves an EBITDA of Rs 75 lakh per MW per month, or Rs 9 crore annually.
Put simply, the economics looked striking.
Two quarters later, in Q2 FY25, the company unveiled its growth plans to reach 307 MW: 50 MW at Manesar, 200 MW at Rai and 57 MW at Panchkula. On the above economics, that implied a very large profit pool.
| Earlier co-location plan | Capacity | Revenue | EBITDA |
|---|---|---|---|
| Full roadmap | 307 MW | Rs 3,316 crore | Rs 2,763 crore |
What changed, then?
In its Q2 FY25 concall, Anant Raj stated that it had operationalised 6 MW at its Manesar plant and was on track to complete another 15MW. It also assured investors that nearly 7 MW of capacity would be operational at the Panchkula plant by the end of FY25, bringing its total capacity to 28 MW.
However, two quarters later, the statements had changed. Only 6 MW of the 28 MW was functional, while the remaining 22 MW would be ready for operation only by Q1 FY26.
By Q2 FY26, management said the 28 MW platform had been showcased, with Manesar enhanced to 21 MW and Panchkula at 7 MW. But it also clarified that only 8 MW of co-location had been completely handed over, while the rest was still in the handover process.
This distinction matters. Operational capacity is not the same as handed-over capacity. And handed-over capacity is not the same as billed capacity.
The latest Q4 FY26 presentation states that the company now targets 357 MW by FY32, with 117 MW to commence by FY28. So, the target has become larger, but the near-term timeline has stretched.
The hit to the earlier numbers
If FY28 was earlier seen as a 300 MW-style co-location opportunity, the potential profit pool was huge. But the current FY28 milestone is 117 MW.
| Scenario | Capacity | Revenue | EBITDA |
|---|---|---|---|
| Earlier co-location model | 307 MW | Rs 3,316 crore | Rs 2,763 crore |
| Current FY28 pure co-location case | 117 MW | Rs 1,264 crore | Rs 1,053 crore |
| Shortfall | 190 MW | Rs 2,052 crore | Rs 1,710 crore |
Using management’s H1 FY26 data-centre PAT (profit after tax) margin of 43.2 per cent, the earlier 307 MW model implied a PAT of around Rs 1,434 crore. A 117 MW pure co-location case would imply about Rs 546 crore. That leaves a possible PAT gap of nearly Rs 888 crore.
This is not a small change. It shifts the story from a fast, low-cost co-location rollout to a more complex execution-and-utilisation story.
Can cloud bridge the gap?
In simple number terms, yes. However, the investment case now largely depends on execution, funding and clarity.
In Q2 FY25, management said 14 MW of the 63 MW could be cloud-based (originally planned for FY26), depending on funding. It also said 1 MW of cloud requires about Rs 100 crore of additional capex, and that 0.5 MW of cloud can generate around Rs 75 crore annually. That implies revenue of Rs 150 crore per MW per year.
In the Q2 FY26 call, management said the company would reach 63 MW by December 2026. The split was 49 MW of co-location, 6 MW of cloud up and running, and 8 MW kept vacant to scale cloud later, taking cloud to 14 MW when utilised.
| 63 MW plan | MW | Revenue/MW/year | Revenue |
|---|---|---|---|
| Co-location | 49 | Rs 10.8 crore | Rs 529 crore |
| Cloud live | 6 | Rs 150 crore | Rs 900 crore |
| Vacant provision | 8 | Nil until utilised | Nil |
| Total with 6 MW cloud live | 63 | Rs 1,429 crore |
FY28 is where the communication becomes less clear. In Q2FY26, concall management said capacity would jump to 117 MW. But in the same discussion, it said 87 MW would be co-location and 36 MW would be cloud. That brings the total to 123 MW, not 117 MW. It then said that out of the 36 MW cloud, 14 MW would be up and running, and 16 MW would be kept as a provision. That accounts for 30 MW, leaving another 6 MW unexplained.
Still, the revenue bridge is useful. To match the earlier Rs 3,316 crore revenue expectation from the 307 MW co-location model, the FY28 plan requires around 15-16 MW of cloud capacity.
Why transparency matters
Anant Raj’s data-centre opportunity is real. FY26 data-centre, infrastructure and allied services revenue was Rs 176.5 crore, with Rs 74.5 crore coming in Q4 alone. That Q4 number is close to the theoretical quarterly revenue from 28 MW of co-location, totalling Rs 75.6 crore.
But the company’s communication has not kept pace with the story's complexity. Public concalls have been irregular and have not happened since Q2 FY26. The roadmap has changed from a fast 300 MW plan to 117 MW by FY28 and 357 MW by FY32, and the Q2 FY26 call itself contained confusing MW arithmetic around the FY28 co-location and cloud split. This comes alongside project delays and extended timelines.
This does not weaken the opportunity. But it does mean investors need a wider margin of safety. And at the valuation Anant Raj currently trades at, the existence of that margin of safety is questionable.
For now, the stance is simple: trust the opportunity, verify the execution and discount the guidance until capacity, revenue, cloud mix and cash flow are reported with far greater clarity.
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Disclaimer: This content is for information only and should not be considered investment advice or a recommendation.
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