SignatureGlobal shares get a ‘Buy’ call from ICICI Securities

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. “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. “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.