Buy Signature Global; target of Rs 2000: Motilal Oswal

Motilal Oswal's research report on Signature Global

SignatureGlobal India (SIGNATURE) began its operations in 2014 and in just a decade, it has become one of the leading real estate developers in the DelhiNCR market. The company commenced its journey in the affordable and low/mid-income housing segment by leveraging the state government’s housing policies. Through its standardized offerings and quick turnaround strategy, SIGNATURE has scaled up rapidly and delivered a 42% CAGR in pre-sales over FY21-23. Its agility in adapting to changing market preferences has enabled SIGNATURE to foray into the premium segment, which doubled its pre-sales to INR73b in FY24. Its strong execution capabilities have enabled it to churn the capital and gear up with a strong ~30msf project pipeline to be launched over the next two years. We, thus, expect the growth momentum to remain intact and expect SIGNATURE to deliver 35% CAGR in pre-sales over FY24-27E to INR178b. The management’s disciplined land acquisition strategy has enabled it to curtail costs and report margins of over 35% (better than peers).

Outlook

We initiate coverage on SIGNATURE with a BUY rating and a DCF-based target price of INR2,000, implying 38% upside potential.