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 Growth Blueprint
The demand for housing increased rapidly as Signature Global moved from inexpensive to mid-income and finally premium housing, which led to a low inventory overhang for that market. The company changed its attention to residences priced between Rs 2 crore and Rs 6 crore after noticing this shift in tendencies. This market 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 properties in new micromarkets in order to capitalize on Gurugram’s urban expansion. 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 offer strategic advantages and improved connectivity in the future. By locating itself near North India’s commercial and information technology centers, Signature is capitalizing on Gurugram’s need for mid-range and luxury housing.
Financial Performance & Projections
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. Due to the impending launch of almost 25 million square feet, pre-sales are expected to increase at a robust rate of about 36% CAGR from FY25 to FY27, with bookings reaching ₹18,129 crore. It is projected that the company’s EBITDA margin will increase dramatically, rising from -2.1% in FY24 to 27% in FY27. It is anticipated that net profit will rise significantly from ₹16 crore in FY24 to ₹1,654 crore in FY27. It is anticipated that operating cash flow will increase from ₹621 crore in FY25 to ₹2,708 crore in FY27. It is anticipated that the business will have negative net debt by FY27E, indicating sound financial standing.
Competitive Strengths & Execution Capability
With a land-to-launch span of under 18 months, the company 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 acquisition also prioritizes areas with strong connectivity and infrastructural growth.
Conclusion
Signature Global’s robust sales momentum, improved margins, and effective execution put it in an excellent position to capitalize on Gurugram’s housing demand. With a potential upside of 29%, the company presents a strong investment opportunity with a sound financial outlook and significant expansion ambitions.
