SignatureGlobal India - A Consistent Compounder; ICICI Securities Initiates Coverage With A Buy

ICICI Securities Report

We initiate on SignatureGlobal India Ltd. with a 'Buy' rating and a target price of Rs 1,705, valuing the company at nine times FY24-26E average embedded Ebitda on sales bookings.

The Gurugram-based, National Capital Region residential developer has a lean banking business model boasting rapid conversion from acquisition to delivery, enabling it to channel internal accruals for future growth.

Signature delivered 43% sales booking CAGR over FY21-23, largely through affordable/ mid-income housing projects. It has now forayed into premium group housing projects in prime areas of Gurugram.

Given its strong launch pipeline of projects with a cumulative gross development value of more than Rs 400 billion over FY24-26E, we estimate that Signature may clock 38% sales booking CAGR over FY23E-27E with sales booking ranging between Rs 100- 120 billion annually over FY25E-27E at average realisations of over Rs 13,000/psf-plus.

Key risks: Slowdown in Gurugram market; inability to replenish land bank.

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