ICICI Securities has suggested BUY Call for real estate major Signature Global, projecting strong growth fueled by an extensive launch pipeline and improving sales bookings. The company has demonstrated a 57% CAGR in sales bookings over FY21-25, with H1FY26 sales at Rs 47 billion and planned launches totaling Rs 130-140 billion GDV in Gurugram for H2FY26. ICICI Securities has revised the target price upward to Rs 1,786, driven by an embedded EBITDA multiple valuation framework reflecting sustainable growth and operational efficiency. Risks include market slowdowns and land bank replenishment challenges, but steady cash flows and EBITDAs project a promising investment horizon through FY28.

Buy Call by ICICI Securities with Upbeat Target Price

ICICI Securities maintains a BUY stance on Signature Global India with a revised target price set at Rs 1,786 per share, up from Rs 1,742 earlier. The target is underpinned by a valuation based on 7x the FY25-28 average embedded EBITDA of Rs 36.4 billion, with an EBITDA margin forecast of 30%. This multiple reflects the company’s consistent project completions and reinvestment model ensuring sustainable earnings growth. The stock currently trades at Rs 1,021, offering significant upside potential for investors looking for exposure to India's affordable-mid income housing segment.

Robust Sales Booking Growth with Strong Pipeline

SignatureGlobal has delivered an impressive 57% CAGR in sales bookings from FY21 to FY25, totaling Rs 103 billion in FY25, a 42% year-on-year increase. Despite a subdued H1FY26 with Rs 47 billion in bookings—impacted by lower new launches—steadfast momentum is expected in H2FY26 driven by targeted launches across Gurugram sectors, particularly large phases in Sector 37D and Sector 71. The company reaffirms its FY26 sales booking guidance of Rs 125 billion, a 20% year-on-year growth estimate, supported by an upcoming GDV launch pipeline valued between Rs 130-140 billion.

Financial Analysis: Profitability and Margin Expansion

Financials reveal transformative momentum. Net revenue is projected to grow substantially from Rs 24,980 million in FY25 to Rs 65,908 million by FY28, driven by scaling operations and enhanced sales velocity. EBITDA margins will expand dramatically from 1.8% in FY25 to 22.6% in FY28, translating into EBITDA growth from Rs 440 million to Rs 14,877 million over the same period. Net profits are forecast to surge from Rs 1,011 million in FY25 to Rs 11,644 million by FY28, with EPS escalating from Rs 7.2 to Rs 82.9. Capital structure improvements are evident as net debt/equity ratios fall sharply by FY28, supporting stronger returns on capital employed (RoCE) and equity (RoE).

Embedded EBITDA Valuation Approach Ensures Sustainable Pricing

The valuation methodology departs from conventional DCF or NAV approaches used by listed real estate developers. Instead, ICICI Securities endorses a going-concern valuation based on embedded EBITDA multiples representing operating cash EBITDA net of construction costs and overheads from projects launched. This model aligns with SignatureGlobal’s unique business model of launching/completing projects within 4-5 years and maintaining a consistent land bank reserve equivalent to 4-5 years’ worth of launches. The embedded EBITDA margin is maintained at 30%, providing a long-term sustainable earnings outlook driving the Rs 1,786 price target.

Key Trading Levels and Target for Investors

- Current Market Price (CMP): Rs 1,021 - Target Price: Rs 1,786 (Upside potential of approximately 75%) - Support Levels: Rs 980 (near-term) and Rs 900 (secondary support) - Resistance Levels: Rs 1,400 (intermediate resistance) and Rs 1,780 (target zone)
Investors are recommended to accumulate the stock in a phased manner on dips to support levels, with a disciplined exit or profit booking near the Rs 1,786 target. The elevated upside reflects not just the earnings recovery but embedded growth potential linked to SignatureGlobal’s expansive pipeline and prudent capital management.

Operational Risks and Mitigation Factors

Several risks to the bullish thesis exist, primarily the potential slowdown in the Gurugram real estate market and challenges in replenishing land banks to sustain long-term growth. Slow collections and sales bookings in H1FY26 hint at market softness but are expected to recover sharply as construction milestones are met in key projects. Diversification into other NCR markets beyond Gurugram could unlock additional upside beyond current estimates, providing investors some comfort against regional concentration risks.

Shareholding and Market Sentiment

The promoter holding remains steady at 69.6%, showcasing strong insider confidence, while institutional investors hold an increasing stake at 16.2%. Market capitalization stands near Rs 144 billion, with a decent three-month average daily turnover translating to healthy liquidity. Relative performance against indices indicates strong investor interest and recommended long-term positioning by ICICI Securities.

Bottomline: A Balanced Buy with Growth and Value

ICICI Securities’ Buy recommendation on SignatureGlobal India is grounded in solid fundamentals, an aggressive yet realistic project launch pipeline, and a forward-looking embedded EBITDA valuation that captures cash flow realizations effectively. With robust margin expansion, improving returns, and strong sales momentum expected in the coming quarters, investors looking for growth in the Indian affordable-mid income housing sector should consider SignatureGlobal a compelling addition to their portfolio, with a target price of Rs 1,786 representing a sizable upside from current levels.