With a target price of ₹1,645 per share, or a 29% increase from the current market price (CMP), Axis Securities has advised a BUY on Signature Global (India) Ltd. (SIGNATURE) stock. One of the top developers of inexpensive and mid-segment real estate in the Delhi/NCR area is Signature Global.
Signature Global’s Plan for Growth
The demand for housing increased rapidly as Signature Global moved from inexpensive to mid-income and finally luxury housing, which led to a low inventory overhang for that market. The firm changed its attention to residences priced between Rs 2 crore and Rs 6 crore after noticing this shift in tendencies. This industry is dominated by a small number of well-known companies, and Signature Global has demonstrated its dominance over the last ten years.
Signature intends to build developments in new micromarkets in order to capitalise on Gurugram’s urban boom. The Sohna/Manesar Corridor, Sector 71, and Sector 37D are home to the majority of its future projects. Property values are expected to rise in these expanding locations, which also provide strategic advantages and improved connectivity in the future. By locating itself near North India’s commercial and information technology centres, Signature is capitalising on Gurugram’s need for mid-range and luxury apartments.
Financial Results and Forecasts
With a strong compound annual growth rate (CAGR) of 80%, Signature Global’s revenue is anticipated to increase from ₹1,241 crore in FY24 to ₹7,197 crore in FY27. Presales are forecasted to rise at a strong pace of around 36% CAGR from FY25 to FY27, with bookings reaching ₹18,129 crore, driven by the upcoming launch of approximately 25 million sq. ft. The company’s EBITDA margin is anticipated to improve significantly, from -2.1% in FY24 to 27% in FY27. Net profit is projected to increase substantially, from ₹16 crore in FY24 to ₹1,654 crore in FY27. Operating cash flow is expected to rise from ₹621 crore in FY25 to ₹2,708 crore in FY27. By FY27E, the company is expected to report negative net debt, signaling strong financial health.
Strengths of Competition and Execution Ability
With a land-to-launch span of only 18 months, the firm touts a quicker turnaround time than the industry average. It maintains its market leadership with a 27% market share in Gurugram’s micromarkets. Its strategic land purchase also prioritises areas with strong connectivity and infrastructure expansion.
In conclusion
Signature Global’s robust sales momentum, improved margins, and effective execution put it in an excellent position to capitalise on Gurugram’s housing demand. With a potential upside of 29%, the firm presents a strong investment opportunity with a sound financial outlook and significant development ambitions.