Signatureglobal (India) Limited (SIGNATURE) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the Signature Global India Limited Q1 F527 Earnings Conference Call hosted by ICICI Securities. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star, then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Adidev Chattopthai. Thank you and over to you, sir.

Good evening, everyone. On behalf of ICHA Securities, I'd like to welcome everyone on the Signature Global call today. As always, from the management we have with us, Mr. Pradeep Kumar Agarwal, the Chairman and Whole-Time Director, Mr. Lalit Kumar Agarwal, the Vice Chairman and Whole-Time Director, Mr. Ravi Agarwal, the Managing Director, Mr. Devinder Agarwal, the Joint Managing Director and Whole-Time Director, Mr. Rajap Kathuria, the Chief Executive Officer. Mr. Sanjeev Kumar Sharma, the Chief Financial Officer, and Ms. Prithika Singh, Head of Investor Relations. And now I'd like to hand over the call to the management for their opening remarks and comments. Over to you. Thank you.

Thank you for joining us today. I hope you have had the opportunity to review our financial results and investor presentation shared earlier today. Again, India's housing market continues to be supported by a strong macroeconomic environment. Sustained infrastructure development, supportive government policies, and rising urbanization, all of which are driving long-term demand. The center's recent advisory directing state RERAL to grant a four-month extension for eligible projects impacted by the Middle East conflict further reflected. A proactive policy approach towards the sector, combined with the evolving homebuyer aspiration and a growing preference for quality development. These factors are creating significant growth opportunity for organized real estate developers. According to a recent report of Cushman and Bigfield, 18,470 residential units were launched in Dillion CR during H1-2026, making a 10% year-on-year increase. Guru Gram retained its position as a premium residential hotspot, accounting for 74% of all luxury housing launches. Additionally, the average launch price of home in billion CR rose 24% year-on-year in Q2-26, reflecting sustained demand for premium housing in the region. Against the positive backdrop, Signature Global continued to increase its presence across the residential metro market while expanding its... Diversification strategy. During the quarter, we entered in a branded residence segment through our collaboration with the Tonino Lamborghini for a premium residential project in sector 71 on southern periphery road, Gurugan. This launch align with the rapid growth of the branded residence segment, which industry estimate projects will expand by nearly seven years. 60% by 2027. Driven by the rising demand for premium and experience-led living, the strong response to the first phase of Renfade for the confidence in this segment. And we will continue to pursue similar opportunities that align with the evolving customer aspiration. Also reflected steady operational progress, healthy demand across our projects, improved sales realization, and sustained momentum in our core market. This performance was supported a very healthy project execution, improved operational efficiency, and successful monetization of our portfolio. De-framing the strength of our business model and disciplined approach to the sustainable growth. Looking ahead, we remain optimistic about the long-term outlook for the housing sector, particularly in group round, and the wider NCR region. And our focus will continue to be on timely delivery, project delivery, customer. Certainity, financial discipline, and catering long-term value for all stakeholders. With that, I would love. Now, I'd like to invite our CEO, Mr. Rajat Kasulia, to take you through the company financial performance in detail. Thank you once again for joining us today and for your continued support of Signature Global.

Thank you, Pradeepji, and thanks, everyone, for joining today's call. Digging a little deeper into details, so during this quarter, we did a fairly good launch of this group housing and apartment project. Development, wherein we did a tie-up with lifestyle brand Tonino Lamborghini. This is a reasonable-sized project, more than 12 acres in size, and more than 2 million square foot in terms of super built-up area. We launched the project at the highest ever price we've achieved ever, which is a little above 22,000 rupees a foot. Hence, taking the GDV value in excess of 4,000 crores, about 44 billion to be precise. So, overall, the project had more than 800 odd units. We opened up about 400 odd units for the first phase of sale, and more than 300 plus units were sold. You know, so we are fairly enthused that at these price points, we got a very strong response from the market. And even this needs to be looked upon in the context of the macro headwinds which we were witnessing throughout the first quarter with the Middle Eastern war. They were everyday, you know, bad print. Bad media stories getting covered, currency devaluations being talked about, etc. But given all of that, I think we were very happy with the way the project launch, you know, happened and performed. And, you know, it's satisfying in the way it has happened. We will be planning more launches for the year. Our overall guidance stays formed to come up with new launches worth You know, 150 billion for this year. So there are more launches planned during the third and the fourth quarter. More around Diwali, you know, there's another launch which is getting planned. We should, by and large, be able to achieve it. And there's a launch in the fourth quarter which is planned. So we look comfortable around our annual guidance of new launches of 150 billion for this particular year. I would also like to point out that if we look at the previous eight to nine quarters, we've consistently been launching projects across categories and across markets within Gurgaon, whether these are larger townships, where we launched two large townships, one of 125 acres, the other of 140 acres. And consistently launching group housing projects, starting from Deluxe, DXP, to Titanium, Coverdale, you know, and Twin Towers, and, you know, now Tonino and Lamborghini. So all these launches have been done in good tandem, because our fundamental thesis and, you know, learning of working in this market is that it's hugely supply constrained. Gurgaon market saw very little supply creation. It happened between 2014 and 2022 at an industry level, and hence that created a vacuum. The demand for new homes is significantly high, and that's why we feel the supply constraint can be met only by consistent supply, which Signature Global has been working upon over the last few years. As far as the numbers go, yeah, we've done close to 2,000 odd crores, about 20 odd billion of sales, pre-sales got achieved. Given our launch pipeline, we stay confident of achieving about 100 billion of pre-sales for the current year. This can be looked at in multiple ways. I think 20% of the target got achieved in first quarter itself. Usually, quarter three tends to be a good quarter in North India, and, you know, with more launches planned around that time, we are feeling comfortable with 100 billion target for the full year. As far as the price points, realizations, and collections go, we achieved a per square foot realization in excess of 17,000 rupees a foot. For the whole of last year, this number stood at a little above 15,000 odd rupees a foot, so we've grown significantly in terms of price per square foot, which is primarily driven by more premium launches, you know, a premium launch within this first quarter. That's one of the primary reasons why the poor square foot realization has gone up. But even in general, in Gurgaon, We are seeing, you know, at an industry level, people getting an inflation-plus-level increment in selling prices, primary reason for that being that, you know, demand is outpacing supply and demand is steady. Developers are feeling confident of enriching the product, giving better quality product, and backed up by good quality infrastructure which has come up over the years. I think some of these places which were a little ahead from the city are very much part of the city. There is more plans in terms of city-level infrastructure. The metro development, the phase two metro development is... It's approved, and, you know, that's, like, going to be again a game-changer for the Gurgaon city. So overall, prices continue to go up. We've also, you know, followed, in line with the trend, we've also witnessed, you know, realizations going up. As far as our collections are concerned, I think we collected about 6.7 billion during this quarter. This number, you know, will... It grows significantly during the current year because collections often are, you know, basis, the milestones getting achieved. We are achieving completion on a lot of our projects during this current year. We anticipate completing projects in excess of 5,000-odd crores and recognizing revenue of, like, 5,000-odd crores, about 50-odd billion INR. And hence, in line with that, collections are expected to face up during the rest of the year. As far as the current portfolio position goes, we've delivered about 19 million square foot till date. There's another 9 million square foot which, on an average, We have completion timelines like two to three, two, two and a half quarters. By another four quarters or five quarters, bulk of this nine million would have been completed with few exceptions, but the average completion time frame of this nine million square foot is just anywhere between two to three quarters now. In terms of recently launched projects, like I just talked about, that we've consistently created supply, we've launched projects. Almost like 23 million square foot since February 24, when we launched a group housing project called DLX DXP. The GDV value of all these launches is 334 billion. So this is one of the significant buckets. A lot of portfolio is actually converting into cash. These are not just futuristic land parcels which will be getting launched in five or seven or ten years. This is actually projects where work has commenced and we are actively developing these projects now. Besides that, there is a forthcoming portfolio of about 17 million square foot. Of which 5 million square foot is a commercial development where we did a tie-up with the RMZ group and we announced it in March. But besides that, there's another 12 million square foot which we will be launching as part of this year and the coming year. Adding to the portfolio's concern, we are very actively involved in doing new business development as during this year. We are very hopeful of adding a significant amount of, you know, land within our core markets and even outside of our core markets. By outside, I mean, you know, markets outside of the Delhi NCR. So, both of these markets, we are very, you know, hopeful of doing significant new business development. Besides that, you know, the balance sheet position of the company stays very good. We are sitting on cash and bank balances of close to $25 billion, our net debt positions close to, you know, less than $3.9 billion, so very low levels of net debt. While doing business development during the year, you know, the net debt numbers could go a little bit higher. Not significantly higher, but these could grow during this year as we... Intend to do significant amounts of business development. Besides that, I think there were few project completions. We've completed few affordable housing projects. There are just few now more to go, and we would be done by all affordable housing completions in a couple of quarters, but even in this quarter, there was more affordable housing completion than mid-income segment. The average per square foot. So, you know, realization of inventory which got completed during this quarter was less than $6,000. So, while currently we are selling at an average realization of $17,000, during the first quarter our average, you know, revenue was recognized on inventory which got completed was less than $6,000. And hence, you know, the P&L is not fully reflective of the current position. But during the course of the year, we are very comfortable that we'll recognize revenue of more than $50 billion and show a very good fat number emerging out of historical projects which are getting completed. So, by and large, we stay comfortable with our overall business guidance. You know, the business performance history, completions are happening at a good pace. Rains have been quite heavy last couple of days, but by and large, you know, we've got a good number of working days. There weren't too many disruptions happening out of rain this year, and we are fairly confident with regard to timely completions and collections. So we look comfortable with the guidance we gave at the start of the year, and it's a good beginning is the way we look at this particular year. To add on, I think in terms of a bit of flavor on the nature of business development, we feel comfortable doing large format developments. The way we've seen success of Project Daktion and Project City of Colors in our core market, we want to take that particular product segment across various markets, even outside of Delhi NCR. And, you know, low-rise developments, large-format developments spread across, you know, 100, 150 odd acres is somewhere we are focusing on, and, you know, you will see more additions on that format happening during the rest of the year. Happy to take up any questions.

Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question may press start and one. Anyone who wishes to remove themselves from the question queue may press start and two. Participants are requested to use handsets while asking for questions. Ladies and gentlemen, we will wait for a moment while the questions keep assembled. The first question is from the line of Parvez Kazi from Noobama Group. Please go ahead.

Good evening, and thanks for taking my question. So, my question is regarding business development activity. If I heard you right, you said that we are okay looking at projects outside NCR also. Did I get that right? Yeah, yeah, that's right. So, have you found out which geography are we looking at? Is this largely going to be North India or we are looking at other metro cities in there?

So, we are evaluating a few opportunities, but let it come to the stage where we can share more. So, I would prefer not to suggest the particular location, but yes. We are looking at larger format developments outside of the Delhi NGM market.

Sure, and wall park and what kind of landcapes are the comforted hill during the current day?

The number could be in the range of around, you know, 1,500 to 1,800 odd rows.

Regarding our launches in H2, fair to suggest that one of them could be in Dwarka Express and the other at STF.

It's possible that both of them could be in the SPR itself. The second one is definitely in SPR. The third one, we are yet to decide, but most likely it could be SPR again.

So then a related question, I mean, first quarter we had a launch with a GDP of about 4,400 crore. With a guidance of about 50,000 crore, that leaves almost about 10,000, 10,500. For the second half. So, are we okay bringing that kind of inventory in a single micro market or can there be launches outside these micro markets?

See, there will be some launches outside. I'm not saying the entire, you know, 150 billion gets received out of the single market. But yes, a good portion of the launches for the parent year are planned in sector 71. And we are comfortable creating that kind of supply because there is very little getting supplied in that market at this stage because there are very few developers locally who own any reasonable quantum of land in that particular market. In the last couple of years.

And last question, in SPR, we are compatible with the kind of ticket size and the unit size, which we have roughly about five, five and a half crore. Would that be a fair assessment? Thanks and all the best. Thank you.

Thank you very much. Reminder for all participants, please press star and 1 to ask a question. Participants who wish to ask a question may press star and 1. The next question is from the line of Pritesh Sher from Access Capital. Please go ahead.

Yeah, thanks for the opportunity. So just on, you know, continuing on these launches, you know, I think we had a branded residence launch this quarter, and there are a couple of more which are also planned as a branded residence, you know, in the market. So in general, how do we differentiate with these products? So, you know, considering that we launched four and a half, we would have sold maybe 1,000, 1,500 crore this quarter. We still have good enough inventory there. So, you know, bringing a couple of more branded residences, you know, how does customers, you know, differentiate, you know, in terms of which one to prefer that way. So, yeah, that's my first question.

Vitesh, thanks for asking this. See, there... Here's differentiation which is getting created. So, differentiation in terms of the product offering, the brand which is being offered, the size of units which is currently being offered, and the overall orientation of the project. So, there are multiple ways in which differentiation will get created. The second project is very thoroughly being worked upon so that it's clearly different from what we recently launched. We've achieved good sales. We've crossed 1,500 odd cores out of this particular launch itself, and it's not that, you know, we're putting the rest of the inventory immediately into the market, you know. Some sales are happening even during the current quarter, but thereafter, you know, we may park some of the inventory and, you know, bring it up for sale in a subsequent manner. So there will be a clear product differentiation across. Thank you very much.

Sure. And how should we think about the monetization cycle now? You know, obviously, earlier, earlier, I would say, I mean, maybe two years, three years back, it used to take maybe just a quarter or two quarters to monetize everything to offer, you know, with these branded residences. Now, it should be, you know, a one-year product or a two-year monetization cycle. How should we think about it? Or how would our monetization strategy be, you know, in that sense?

With some of these projects, the way we plan internally is, let's see, a lot of these lands are typically already owned by us and paid for, right? So, these are owned land parcels with very little level of debt in the company. So, by and large, you know, these are paid for land parcels. Our development costs and SG&A costs do not cost, you know, 30 to 35 percent of the sale value for these projects. So, anytime we are crossing, let's say, a 40 percent, So our orientation of sales for these projects is that, let's say, we sell about give or take 50% of the project within, you know, three to six months of launch. And then, you know, you launch about 10% of the inventory on an annualized basis till the time the project goes for completion so that, you know, you balance out on both, you know, quantum of sales, price appreciation, and anyways, financial closure gets achieved right at the start. So that's the broad split in terms of sales which we plan to offer in the market because when you get into You know, this upper mid-segment, you know, it's not a volume play anymore. You want to, you know, launch a good portion of that project at launch, but at the same time, you know, you want to, you know, show progression on the project as you achieve more sales. So we don't want to kind of, you know, achieve 100% sales like within a particular span of time.

Sure, perfect. That's helpful. And second on the collections, I think, you know, obviously it was quite weak versus our usual trend that we have been maintaining since quite a few quarters now. So specific reasons for that. And in general, see, while our sales run rate in a quarter is... Two, two and a half thousand crores since, I mean, 2,000 ballpark in that range since quite some time. You know, would we ever get to like 2,000 crores in terms of collections or anything between 1,300, 1,500 crore collections in a quarter is a good number to base. This is your business plan that you've made in terms of collections.

You're right that, you know, we are averaging around 2,000-odd crores of, you know, pre-sales for a few quarters now. I think even last year, the best quarter was the first quarter where we achieved close to 2,600-odd crores. But, yeah, we are averaging around this 20 billion mark in terms of pre-sales for a few quarters, which we believe... You know, it's kind of, you know, a fair number, you know, 2,000 to 2,500 odd crores of sales coming out of a particular quarter from by-in-large Gurgaon, you know, which we've been achieving. And that's where we think that, you know, at these numbers, it's good kind of sales getting achieved. Collections, yes. This quarter was a bit of an aberration. We've been closing out on 1,100 odd cores of collections per quarter. I think we'll soon get back to that number. Even the coming quarter, we expect it to be quite good. The reason of missing out this year was certain milestones, you know, with lumpy collections getting slipped. into the coming quarter, and that's why, you know, the collection number stood at a mark where it is. But eventually, yes, to your point, all this sales has to, you know, converge into collections on a quarterly basis. I can't give you a particular quarter where it's happening. You know, Excel can speak a story which you want to narrate. But yeah, all of This sales is going to definitely convert into... Because even if you look at the historical trend, so if we've launched 23 million square foot over the last nine quarters, the GDB value is close to 334 billion. We've achieved sales of, let's say, you know, 230, 240 billion has been achieved. So since first is supply, then a sale, and then of course it's collection, so we don't see any doubt around it.

Ladies and gentlemen, we have lost the last participant's line. We will be moving on to the next participant. The next question is from the line of Adi Tev Chattopthai from ICICI Securities. Please go ahead.

Yeah, thank you for the opportunity. I just wanted to understand on the supply side now because of the geopolitical issues, has there been any increase in the cost of the key raw materials or our finishing thing? And next, maybe on medium term, do you see any cost expression in the projects? For that, just wanted to understand how this is playing out.

Azeem, even if we go almost a decade back and see the trend, usually costs tend to go up in late single digits. You do an average of material and labor, both. I think you'll see anywhere between 7% to 8% kind of escalation on cost, which has happened over the last decade. So far, we've not seen any inordinate increase in cost over the last. And, you know, so we do always take, you know, this kind of escalation into our budgets when we are planning for it. So this 7-8%, you know, kind of cost escalation is something which one should budget, you know, over the coming years, so to say. But nothing inordinate, nothing very, you know, no crazy spike on any particular, you know, key building product.

Okay, okay, okay.

Secondly, just to allude on your comments on exploring opportunities outside NCR, we had also mentioned this, right, a few quarters back. So, in terms of the margin and the projects which you want to do, would it be similar to what we are doing in Gurgaon or this would be, you are looking to get into maybe something ultra-luxury or mid-income or how is the, what sort of products are you looking to get into in these markets in terms of technical side?

The preference is to do low-rise developments, more spread-out developments, because any new market which you get into, you know, the idea is not to pick up small 5-10-acre parcels and just, you know, work for that. The idea is to gain relevance in any of these markets where we enter. So low rise is a good model because, you know, you enter and execute and you're able to show your delivery capability sooner in a new market. So while Gurgaon, Delhi, NCR, people may know signature global. As we get into newer markets, you know, we, for that brand recognition, you know, execution capability to be displayed, it's good to kind of, you know, do lower. Low-rise developments and showcase that delivery capability at a good pace. So, that's why the format we are opting for is larger format, low-rise developments, definitely mid-income focus, neither affordable nor on the premium side, so more mid-income, you know, developments in some of these newer markets.

Sure, sure, sure. And finally, sir, yeah, that's all from my side, yeah.

Thank you, Aditya.

Thank you. That was the last question for today. I now hand the conference over to the management for closing remarks. Over to you.

Thanks, everyone. Thank you, everyone. Thank you.

On behalf of ICICI Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.