The shares of this microcap company locked a 2 percent upper-circuit after signing JDA for Rs 500 crores Commercial Development Adjacent to Hilton Chennai. In just six months, the stock has delivered more than a 200 percent return to its shareholders.
Price Movement:
With a market capitalization of Rs. 353 crores, the shares of Arihant Foundations & Housing Ltd started Tuesday’s trading session on a higher note at Rs. 410.10, clocking a 2 percent compared to its previous close of Rs. 402.10 apiece.
What Happened:
Such a bullish movement in the share price was observed after the company in an exchange filing announced that through its SPV – Vilaya Properties LLP, had entered into a partnership with Empee Hotels Ltd, the owners of Hilton Chennai, to develop a Grade A commercial space adjacent to the hotel.
Covering about 300,000 square feet with a Gross Development Value of approximately Rs 500 crores, the project will combine office space with hospitality services, creating a vibrant hub in a prime Chennai location.
Commenting on the partnership, Arun Rajan, Chief Executive Officer of Arihant, said, “This collaboration with Empee Hotels Ltd. represents a significant step forward in our commitment to delivering premium commercial spaces in Chennai. We are excited to develop this project alongside Empee Hotels (managed by Hilton), which will enhance the location’s appeal as a prime business destination.
We believe this development will meet the growing demand for high-quality office spaces that cater to the needs of global companies establishing a presence in the city.”
Financials:
Looking at the company’s financial statements, the revenue decreased by around 43 percent from Rs. 45.45 crores during the March quarter to Rs. 38.70 crores in the June quarter. Contrastingly, the net profits magnified by 957 percent from Rs. 90 lakhs to Rs. 9.51 crores during the same timeframe.
Recent Development:
As per reports, the company is set to invest Rs. 650 crores in real estate projects in Chennai and Bengaluru during the fiscal year 2025. This investment marks a significant expansion for the company, which has traditionally focused on the Chennai market.
The company plans to allocate Rs. 150 crores specifically for the development of Grade A office spaces in Bengaluru.
The targeted areas include locations near the central business district, the northern part of the city, and the eastern sector of the Whitefield IT corridor. Arihant aims to finalize several commercial transactions in Bengaluru during the first half of FY25 and is actively seeking land for residential developments.
Furthermore, the remaining Rs. 500 crore will be directed towards various real estate projects in Chennai. This includes plans for both commercial and residential developments, with a total of approximately 0.5 million square feet (msf) of commercial space and 1 msf of residential space planned for both cities.
Important Financial Ratios:
In terms of key financial metrics, the company reported a Return on Equity (RoE) of 7.05 percent and a return on capital employed (RoCE) of 11.82 percent for the period spanning FY23-24. Further, the net profit margin during FY23-24 was 10.24 percent.
Company Profile:
Incorporated in 1992, Arihant Foundations & Housing Limited is a real estate company primarily engaged in the development and construction of residential apartments, commercial complexes, and IT parks in South India, particularly in Chennai and surrounding areas.
Written By Vaibhav Patil
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