Motilal Oswal Bullish on Signature Global, Issues BUY Rating with Target Price of RS. 2,000

The leading brokerage firm Motilal Oswal remains bullish on Signature Global (India) Ltd. and has reiterated its BUY call on the company’s stock with a target price of ₹2,000 per share, indicating a potential upside of 50%.

The company’s shares were trading at ₹1,354.25, up 2.42% at the close of trading on January 1, 2025. The total market cap stands at ₹19,489.54 crore.

Brokerage Firm Recommendations

The brokerage noted that Signature Global, with its strong presence in strategic locations in Gurugram, is on track to capitalize on the ongoing demand, guided by a strong project pipeline of 24.3msf.

The brokerage firm noted that, with a projected 35% CAGR growth in pre-sales over FY24-27, the company is set to cumulatively collect ₹28,500 crore. Its strategic shift from the affordable to mid/mid-premium segment is expected to drive a strong cumulative OCF of ₹9,500 crore. This will enable the company to turn net cash positive and reinvest in land to fuel future growth.

Strong Market Presence

Signature Global has a strong presence in four of the hottest markets— Southern Peripheral Road (SPR), Dwarka Expressway Highway (DEH), Sohna, and Manesar—with 23.4msf of future potential. This is expected to generate a strong response similar to the recent launch of 9.6msf projects.

Excellent execution ensures 90% CAGR top line growth over FY 24-27

Signature Global is scheduled to deliver ~51msf of ongoing and forthcoming projects in a record time of eight years, according to estimates. This will drive revenue growth at a projected 90% CAGR over FY24-27.

Signature Global expects to recognize cumulative revenue of ₹92,600 crore over FY25-32, with the delivery of ~51msf setting an execution benchmark for future projects.

Strong Launch Pipeline to Drive Growth

As Signature Global prepares for a strong launch pipeline of premium projects, Motilal Oswal expects it to deliver a 35% CAGR in bookings over FY24-27, sustaining the growth momentum.

Strong pre-sales growth will drive a rapid scale-up in operations across key parameters, such as cash flows, revenue, and profitability, enhancing confidence in the company’s execution capabilities and future growth potential, the brokerage firm noted further.