BNP Paribas on Anant Raj Industries Ltd,
We initiate coverage of Anant Raj (ARCP) with a BUY rating. Anant Raj Industries is a National Capital Region (NCR) based developer with an asset-heavy model. A strong balance sheet (net cash positive as of March 2010) positions it favourably in a cyclical up-market and provides it with the flexibility to hold on to assets and gain from the re-levering cycle by selectively making NAV-accretive land bank purchases. The company is one of the few developers in India with a working strategy of ‘buying assets cheap and selling assets at peak’ during prior property cycles
We initiate coverage on ARCP with a BUY rating and a TP of INR173.00, based on a target FY12E P/BV of 1.25x. We believe ROE is set to climb as execution gains momentum. Our target P/BV multiple 1.25x is at a discount to the average (1.5x) of peers
