Axis Capital initiates coverage on this multibagger stock; see up to 43% upside

Signature Global (SGIL), a real estate developer in the National Capital Region (NCR), has been highlighted by Axis Capital for its strategic growth and potential. The firm initiated coverage on SGIL with a ‘buy’ rating, setting a target price of Rs 1,780. This recommendation is grounded in SGIL’s diversified segment mix and expansion plans to enhance growth visibility.

Within a decade of its inception, SGIL emerged as the fifth-largest listed real-estate player in India, achieving a 58 per cent compound annual growth rate (CAGR) in pre-sales over the FY22-25 period. “This led to a 58 per cent CAGR rise in pre-sales over FY22-25, the fastest of all the listed developers, and surpassed Rs 100 bn to mark become the fifth-largest listed player by pre-sales in India,” noted Axis Capital. The company’s agility in adapting to changing regulations and customer preferences has been pivotal to its success.

Axis Capital also highlighted SGIL’s focus on expanding beyond its core market of Gurugram, particularly in Delhi and Noida. “SGIL also aims to diversify beyond Gurugram and is looking for growth potential in Delhi/Noida,” they stated. Such diversification efforts are expected to boost SGIL’s growth trajectory further.

The company is expected to continue delivering substantial growth in pre-sales, projected at a 19 per cent CAGR from FY25 to FY28. By capitalising on strategic micro-markets in Gurugram, where it holds a significant market share, SGIL aims to maintain its growth momentum. Its portfolio includes 25 million square feet of forthcoming projects across key markets.

While pre-sales have scaled significantly, collections have yet to reach similar levels, a point of concern for investors. However, Axis Capital anticipates improvements as execution progresses with newly appointed contractors. “We expect the company to deliver a 38 per cent CAGR in both collections and OCF. Surplus cash flows will be sufficient to fund the growth investments,” they added.

SGIL’s financial strategy includes maintaining healthy post-tax operating cash flow (OCF) margins, projected at 37 per cent, supported by a lower cost of land, estimated at 10-15 per cent of revenue. This approach is expected to yield favourable financial outcomes for the company.

With its robust growth strategy and financial outlook, Signature Global is well-positioned for re-rating, as suggested by Axis Capital. Investors are encouraged to consider SGIL as a promising prospect in the real estate sector.

SignatureGlobal has launched its IPO in September 2023, when the company raised Rs 730 crore via primary route by selling its shares for Rs 385 apiece. The stock has soared more than 225 per cent from its IPO price to hover around Rs 1,265 on Friday, with a total market capitalization more than 17,500 crore.

Despite a  23 per cent correction from its 52-week high at Rs 1,645.85, hit in September 2024, the stock is up over 25 per cent from its 52-week low at Rs 1,010.95, hit on March 06, 2025. However, the stock has remained flat in the last one month period. Axis Capital’s target suggest an upside potential of 43 per cent in the stock. 

SGIL logged pre-sales of Rs 2,640 crore in Q1FY26. Collections during the quarter fell 23 per cent YoY/ 21 per cent QoQ to Rs 930 crore. Average realisations were Rs 16,296 per sq ft (up 6 per cent YoY) while average ticket size at Rs 34 million was up 5 per cent YoY, said Nuvama Institutional Equities.

Net debt inched up Rs 10 crore QoQ as SGIL acquired 10 acres of land in Sohna with sales potential of 0.53msf. The company has maintained its FY26E guidance of INR125bn pre-sales and Rs 6,000 crore collections. SGIL’s successful transition to the premium housing segment is likely to keep sales momentum healthy going ahead, it added with a ‘buy’ and a target price of Rs 1,456.