Motilal Oswal Slashes SignatureGlobal's Target Price Citing Lag In Collections Despite Strong Launch Pipeline

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Motilal Oswal Report

SignatureGlobal India Ltd. reported a strong 57% CAGR in pre-sales over FY21-25, driven by an increase in projects under execution and premiumization.

As SignatureGlobal gears up with a strong launch pipeline of premium projects, we expect it to deliver a 31% CAGR in bookings over FY25-28E as the growth momentum remains intact.

We have valued the current residential portfolio by discounting the cash flows from all projects and accounting for the recent business development as well as potential land investments of Rs 15 billion for future growth.

However, we see a lag in collections continuing since last year, and hence we have removed the premium from valuation. Rerating or derating from here onwards will be dependent on how the collections pan out in the near term.

We reiterate our Buy rating with a revised target price of Rs 1,383 (earlier Rs 1,760), indicating a 35% upside potential.

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