SignatureGlobal shares get a ‘Buy’ call from ICICI Securities; brokerage sees 20% upside potential
- SignatureGlobal delivered 43% sales booking CAGR over FY21-23, largely through affordable/ mid-income housing projects. The company has now forayed into premium group housing projects in prime areas of Gurugram.
Brokerage firm ICICI Securities has initiated coverage on SignatureGlobal India with a ‘Buy’ rating and a target price of ₹1,705, implying an upside of 20% from Monday’s closing price. It values the company at 9x FY24-26E average embedded EBITDA on sales bookings.
“Our multiple of 9x is at a 40% discount to DLF, its closest peer – considering Signature would need to reinvest internal accruals for land bank replenishment while DLF has the luxury of historical low-cost land in Gurugram,” ICICI Securities said in a report.
The residential real estate developer, SignatureGlobal India has a lean banking business model boasting rapid conversion from acquisition to delivery, enabling it to channel internal accruals for future growth, it added.
Also Read: Delhivery shares: Kotak Equities upgrades stock to ‘Buy’, raises target price; sees over 24% upside
Signature delivered 43% sales booking CAGR over FY21-23, largely through affordable/ mid-income housing projects. The company has now forayed into premium group housing projects in prime areas of Gurugram
As of December 2023, SignatureGlobal has a strong portfolio of 45.3 million square feet (msf) of saleable area across ongoing and forthcoming projects. All its upcoming projects, with an estimated cumulative gross development value (GDV) of over ₹40,000 crore, are expected to be launched between FY24 and FY26.
“Given its strong launch pipeline of projects with a cumulative GDV of more than ₹40,000 crore over FY24-26E, we estimate that Signature may clock 38% sales booking CAGR over FY23E-27E with sales booking ranging between ₹10,000 - 12,000 crore annually over FY25E-27E at average realisations of over ₹13,000 per sq ft.,” ICICI Securities said.
The brokerage firm expects the share of mid-income housing projects shall range between 65-70% over this period at realizations in excess of ₹10,000 per sq ft.
“In early March 2024, Signature announced that it has clocked over ₹3,600 crore of sales bookings from the successful launch of its first premium residential project in Gurugram with an average ticket size of ₹35 million per unit at an average realisation of over ₹13,000 per sq ft, which is testimony to the company’s brand strength and ability to monetise premium group housing projects,” said the brokerage firm.
SignatureGlobal made a strong stock market debut in September 2023 as the stock was listed at ₹445.00 apiece on the BSE, a premium of 15.58% to the issue price of ₹385 per share.
SignatureGlobal shares have given multibagger returns since its listing. The stock is up more than 220% from its listing price. In the past three months, SignatureGlobal shares have rallied more than 73% and over 58% in 2024 so far.
At 2:00 pm, SignatureGlobal shares were trading 2.91% lower at ₹1,382.70 apiece on the BSE.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
Catch all the Business News , Market News , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
- Top Gainers
- Top Losers
- 52 Week High