Target: ₹1,707

CMP: ₹1,399.55

We retain our BUY rating on Signature Global India (Signature) with an unchanged TP of ₹1,707, valuing the company at 9x FY24–26E average embedded EBITDA on sales bookings. Signature delivered 63 per cent sales booking CAGR over FY21–24, largely through affordable/mid-income housing projects. It has now forayed into premium group-housing projects in prime areas of Gurugram.

We envisage sector-71’s – christened ‘Titanium’ – phase-1 launch to happen in Jun/Jul’24 at a realisation of over ₹15,000/psf across 2msf with potential GDV of over ₹3,000 crore. Given its strong launch pipeline with a cumulative FY24–27E GDV of over ₹40,000 crore, we estimate that Signature may clock 19 per cent sales booking CAGR over FY24– 27 with FY25–27 sales booking of ₹10,000–12,000 crore annually at average realisations of over ₹13,000/psf-plus.

Traditionally, listed developers have historically been valued on a DCF-based NAV across the different business segments (residential/office/retail/hotels/others) along with land bank. However, the current buoyancy in the sector observed post covid, between FY22–24, has led to companies aggressively chasing growth while keeping balance sheets lean and using internal accruals to fund expansion.