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Strong Growth Runway; Maintain BUY

Est. vs. Actual for Q3FY25: Revenue – MISS ; EBITDA – MISS ; PAT – BEAT

Changes in Estimates post Q3FY25

FY25E/FY26E/FY27E: Revenue: 0%/0%/0%; EBITDA: 0%/0%/0%; PAT: 0%/0%/0%

Recommendation Rationale

* Upcoming Launches and Portfolio Pipeline: The company’s ongoing portfolio of 11.2 Mn sqft primarily consists of mid-income and affordable housing projects, which are nearly 95% sold with a sales value of Rs 10,360 Cr and are expected to be delivered in the next 5-6 quarters. Recent launches account for 13.5 Mn sqft (out of 35 Mn sqft), while the forthcoming portfolio comprises 21.6 Mn sqft. These launches have a GDV potential of approximately Rs 15,000 Cr.

* Among recent launches is Daxin Vistas, marking the company’s successful entry into large township developments. The upcoming 21.6 Mn sqft is expected to be launched over the next 2-3 years, with a GDV potential of ~Rs 35,000 Cr. Key forthcoming projects include a 3 Mn sqft development in 37D, a 1.6-1.7 Mn sqft project in Sector 71, and new ‘low rises’ in Sohna, all in the advanced stages of approval and expected to be launched on time. Additionally, the company has added 2.9 Mn sqft in 37D, a core market for Signature Global.

* Strong Operational Performance: The management has maintained its guidance for pre-sales at Rs 10,000 Cr and collections at Rs 6,000 Cr. The company has achieved 87% of its pre-sales guidance and 54% of its collections guidance. Operating surplus for 9MFY25 stood at 38% of collections at Rs 1,210 Cr, compared to 36% in 9MFY24. The company achieved CY24 pre-sales of Rs 12,820 Cr, implying a run rate of approximately Rs 1,000 Cr per month in sales. Similarly, collections stand at ~Rs 300 Cr per month, expecting further improvement in the coming quarters. The company’s embedded EBITDA margin stands at 35%.

* Net Debt Reduction and More Acquisitions: Signatureglobal’s operating surplus stood at Rs 1,210 Cr. Out of this, the company employed Rs 570 Cr for land acquisitions, ~420 Cr for net debt reduction, and ~220 Cr for debt servicing. This reflects the company’s continued focus on debt reduction alongside robust financial performance. The management has guided for a 0.5x net debt-to-operating surplus ratio. With the current net debt at Rs 740 Cr and an operating surplus of Rs 1,210 Cr, the company remains optimistic about reducing net debt while further increasing its surplus.

Sector Outlook: Positive

Company Outlook & Guidance: We remain positive about the company’s long-term prospects

Current Valuation: 4.9x FY26E Pre-sales/EBITDA (Earlier 4.9x FY26E Presales/EBITDA)

Current TP: Rs 1,645/share (Earlier TP: Rs 1,645 /share).

Recommendation: With a 27% upside from the CMP, we maintain our long-term BUY rating on the stock.

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SEBI Registration number is INZ00016163