30% upside on cards! This realty stock bags ’buy’ call from Axis Securities ahead of Q3 results 2025

Signatureglobal (India) shares have gained a healthy 24% over the past year. Yet, the stock may still have room to run, driven by the company’s strong growth prospects, sectoral tailwinds, and attractive valuation. The stock may see fresh traction after the December quarter results, which are to be released on Monday, February 10.

Axis Securities has initiated coverage on the realty stock ahead of its Q3 result. The brokerage firm has a buy call on Signatureglobal stock with a target price of ₹1,645, which implies a 29 per cent upside potential.

“We are initiating coverage on Signatureglobal (India) with a buy recommendation and a target price of ₹1,645 per share, which implies an upside of 29 per cent. Signature Global is a leading real estate development company in the Delhi/NCR region focused on affordable and mid-segment housing,” Axis Securities said.

Why is Axis Securities bullish on Signatureglobal?

Axis Securities highlights the following four key factors that make it bullish on the stock:

1. Focus on mid-income/premium housing: Axis Securities finds the company’s focus on mid-income and premium housing segments, which drove accelerated demand and resulted in a low inventory overhang for that segment, a key focus.

The brokerage firm pointed out that Signature identified the shift from affordable to mid-income and later premium housing and adopted a model focusing on homes priced between ₹2 crore and ₹6 crore.

According to the brokerage firm, this segment currently has limited proven branded players, and over the past decade, Signature has demonstrated its ability to capture this market.

2. The Gurugram factor: Signature is a major Delhi/NCR region real estate player. Axis Securities believes the company plans to capitalise on the Gurugram urbanisation wave by selecting emerging micro markets for development.

Gurugram is witnessing increased housing requirements. The brokerage firm underscored that the new generation seeks gated communities and lifestyle-enhancing products.

Axis said Signature’s low-rise floors and the development of amenities successfully catered to this demand, showcasing the company’s deep understanding of its market. The company aims to deliver the right size in the right location at the right price.

“Gurugram is transitioning from a previously investor-driven market into an end-user market. The market has also seen improved affordability due to higher employment generation and industrial growth,” said Axis.

“The company has strategically positioned itself around areas of forthcoming infrastructure and industrial developments. Most of its upcoming pipeline is located at Sector 71, Sector 37D, and the Sohna/Manesar Corridor. These emerging markets offer tactical advantages and excellent upcoming connectivity and are expected to witness improved realisations,” Axis said.

3. Improved financials and profitability: Axis Securities expects the company’s margin to improve when the lagging revenue is recognised in the coming quarters.

“The reported EBITDA is low as overhead costs for the year are being recognised without its corresponding revenue recognition. The project-level EBITDA for residential projects ranges between 35-40 per cent, while the overall EBITDA remains within 25-30 per cent,” said Axis.

The brokerage firm expects the company’s pre-sales to grow at a robust pace of nearly 36 per cent CAGR over FY25E-FY27E (bookings at ₹18,129 crore), driven by upcoming launches of nearly 25 million square feet.

“These upcoming launches have the potential to unlock a GDV (gross development value)) of ₹50,000 crore while incurring a 15 per cent cost (i.e. nearly 7,500 crore). A meaningful uptick of ₹528 crore is expected in the operating cashflows as the company exits FY25E,” Axis said.

“The trend is expected to improve going into FY27E, with operating cash flows expected to scale up to ₹2,708 crores driven by bookings and improving margins. These cashflows will further aid in the replenishment of land. The company is projected to have negative net debt in the coming years,” said Axis.

4. Strong sales: According to Axis Securities, out of the company’s seven projects under the affordable housing policy, six witnessed oversubscription at launch.

“Its broad customer base has positioned it as a market leader in this segment. Since entering the mid-income and premium categories, it has also experienced oversubscriptions at launches,” said Axis.

“The company’s predictable costs, combined with uniform business processes and technical specifications, enable a quick turnaround time of only 18 months for land-to-launch. Its upcoming projects are expected to bolster its mid-income presence further and plotted development segments within key micro-markets,” said Axis.

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