Signature Global (SGIL), a leading real estate developer in the National Capital Region (NCR), has garnered strong momentum in pre-sales, benefiting from its robust presence in the supply-constrained Gurugram market. According to Nuvama Institutional Equities, the company’s transition to premium housing and a capital-efficient business model position it for a 21% compound annual growth rate (CAGR) in pre-sales over FY25–27E.
Nuvama has initiated coverage on Signature Global with a ‘BUY’ rating and a target price of ₹1,436, which represents a 20% premium to its net asset value (NAV). The brokerage believes SGIL’s potential entry into Noida and Delhi could act as a re-rating catalyst, while a slowdown in the Gurugram market remains a key risk.
Founded a decade ago, Signature Global has swiftly established itself as one of the largest real estate players in NCR, initially specializing in affordable housing. The company’s strength lies in its ability to quickly acquire land, launch projects, and execute timely deliveries, leading to 7.6x growth in sales bookings (TTM basis) from FY21 to 9mFY25.
The Gurugram market has seen unprecedented demand post-pandemic, with CY24 demand surging 3.7x compared to CY22. Signature Global has strategically built a land bank across high-growth micro-markets, including Southern Peripheral Road (SPR), Dwarka Expressway, and Sohna, ensuring strong sales traction.
One of SGIL’s key strengths is its ability to acquire land at a cost of just 10–15% of the pre-sales value, significantly lower than industry norms. This cost advantage, combined with its strong market position, allows the company to maintain healthy cash operating margins of 35%, with potential to expand to 40%.
Additionally, ongoing and planned infrastructure projects in Gurugram are expected to further boost real estate demand, reinforcing the company’s growth trajectory.
SGIL operates with a high-velocity sales model, which minimizes working capital requirements. Strong collections – up 5.4x from FY21 to 9mFY25 – further support its capital efficiency. The company’s net debt-to-operating surplus ratio stood at ~0.5x at the end of Q3FY25, showcasing its disciplined financial management.
Despite plans to increase land capex to sustain its land reserves, Signature Global’s rising free cash flow and improving profitability are expected to drive it toward a net-cash status by FY27E.
