Signature Global Q2 Results: Motilal Oswal Maintains 'Buy' On The Stock; Sees 56% Upside Potential, Here's Why

Motilal Oswal Report

Signature Global India Ltd. reported a strong 63% compound annual growth rate in pre-sales over FY21-24, driven by an increase in projects under execution and premiumization. As Signature gears up with a strong launch pipeline of premium projects, we expect it to deliver 35% CAGR in bookings over FY24-27E as the growth momentum remains intact.

Strong pre-sales growth will also lead to a rapid scale-up in operations across the key parameters, e.g., cash flows, revenue and profitability, which will give confidence in the company's execution capability and future growth potential.

Based on the net present value method, we value Signature's existing project pipeline of ~30 msf at Rs 150 billion. Thus, the current valuation implies 30% of going concern premium for the company (versus 50-100% for comparable peers), indicating that a large part of future growth potential is yet to be accounted for.

We maintain our Buy rating with a target price of Rs 2,000/share, indicating a 56% upside potential.

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