Signatureglobal (India) Limited (SIGNATURE) Q2 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the Signature Global India Limited Q2FY27 Results Conference Call hosted by ICICI Securities Limited. 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. Adhidev Chattopatya from ICICI Securities Limited. Thank you, and over to you, sir.

Yeah, good morning, everyone. On behalf of ICSS Securities, I'd like to welcome everyone to the Signature Global India Limited call today. As always, from the management, we have at last Mr. Pradeep Kumar Agarwal, the Chairman and Whole-Time Director, Mr. Lalit Kumar Agarwal, Vice Chairman and Whole-Time Director, Mr. Ravi Agarwal, the Managing Director, Mr. Devendra Agarwal, the Joint MD and Whole-Time Director, Mr. Rajat Kathuriya, the Chief Executive Officer, Mr. Sanjeev Kumar Sharma, the Chief Financial Officer, So, I'm Ms. Pritika Singh, Head of Investor Relations. I would now like to hand over the call to the management for their opening remarks and comments. Over to you. Thank you.

Thanks, Aziz. Good morning, everyone. It is a pleasure to welcome all to the quarter to FY27 earning conference call of Signature Global. Thank you for joining us today. I hope you have had the opportunity to review our financial results and investor presentation shared yesterday. India's economy continues to grow strongly, and the real estate is growing with the sector support about the 7 crore jobs today, and this is expected to reach nearly 10 crore by 2030. According to a KPMG and Naredco report, better infrastructure, Supportive government policies and fast-growing cities are driving long-term demand for homes, creating big opportunities for organized developers. The strength of housing sector is very clear. From the latest number, according to the Anarok report, home sales across India's top seven cities crossed one lakh unit in quarter three. 2026, up 10% from the previous quarter, with a growth in all seven cities. New launches rose 18% and prices rose 7% over last year. Delhi, NCR, and Gurubram stand out even in this strong market. NCR saw the fastest price rise among the countries. Top 7 cities at 12%. Cushman and Wakefield recorded about the 8,700 new launches in NCR during this quarter, led by the GuruGram, with luxury housing gaining momentum. The real data shows Gurugram accounts for 43% of NCR housing sales. This is led by micro markets like Dwarka Expressway, Southern Periphery Road, New Gurugram, Sona, where the better connectivity is drawing more buyers. Against the backdrop, Signature Global is strengthened in the presence across the key residential areas while growing its premium and branded residence business. Backed by strong profitability and a healthy balance sheet, the strong response to our Tonino-Lamborghini residence of Southern Periphery Road, Sector 71, Gurugram, has made us more confident in this segment, driven by rising demand in premium and experience-led living. And we will continue to look for similar opportunity recently. We also added significant land parcel in Farukh Nagar, Guru Gram, giving us a strong pipeline for upcoming launches. The quarter source, strong progress supported by healthy customer demand, better sales relations, and strong revenue growth are focused on disciplined execution, efficient operations. And careful financial management helped us deliver a profitable quarter and built a strong base for long-term growth. Looking ahead, we are optimistic about the housing sector, especially in Gurudan and wider NCR region. We will stay focused on timely delivery, customer satisfaction. Financial discipline and long-term value for all stakeholders. With that, I would now like to invite our CEO, Mr. Rajas Kathuria, to take you through the company's financial performance in greater detail. Thank you once again for joining us today for your continued support for Signature Blue. Thank you.

Thank you, Pradeepji. Morning, everyone. Thanks for joining this call, which was – we didn't get a later slot, so this was, you know, scheduled a little early, so thanks a lot for all of us who – A little early and wishing each one of you and your family members a very happy and prosperous Diwali. Starting with our, you know, performance. And, you know, Starting with the primary theme, just to recall it, we are, by and large, mitigating. to market given the quantum of supply which we've been creating on a very sustained basis. Great income, housing, brand, and... Also, We have a launch where one can say that we've entered the upper-middle segment or, you know, entry-level premium segment when we launched our first branded Resonances project by the name of Branded Astorino Lamborghini. The project had more than 800 units. I think it has performed quite well. We've seen a good response on this project. And if we were to look at the last six months sales performance, we've... Recorded sales to the tune of about 38 billion. 75 odd units which have been sold by the company, and about 1.6 million square foot of underlying area has been sold. The way we look at this number is that as part of our business plan at the start of the year, typically we should do about 40%. The overall guidance for the year, at the start of the year, was 100 billion, which still remains 100 billion, and we are more confident about it because, you know, we've managed to achieve about 40% of the annual sales target during the first six months. 38 billion is almost like 38%. This is despite doing just one launch, which was one larger launch, which was these residences in Sector 71. But, you know, there are more launches planned in the second half of the year, both on the Southern Peripheral Road and, you know, along the Dwarka Expressway corridor. So we are... You know, gets achieved during the second half of the year. A couple of other just, you know, performance indicators. Overall realizations have crossed $17,000 at a portfolio level. This will look higher than the entire previous year realization. This is a little in the line with the market, wherein... At the same time, 17,000 per square foot, which is encouraging. Collections also stood at about 17-odd billion. The last quarter was a bit of an aberration where, you know, the collections were slightly lower. But if we look at a trend of the last 8 to 10 quarters, I think collections have been staying steady at about, you know, 10-odd billion per quarter. Achieve good collections and overall basis are We can stand at about $17 billion. But what's more important to focus here are two aspects. One is the cash surplus and the business development, which we have done during these six months. So if you look at the cash surplus, we've created about $4.8 billion surplus during the first six months. Approvals for upcoming projects or any debt repayments. So out of the by and large operating cash flows, we achieved a surplus of about 4.8 billion, which was roughly about 28% of the cash collection of the collections done by us. And we are fairly hopeful that with more launches and, you know, project completions planned for the second half of the year, our collections are expected to improve significantly in the second half. Thank you. Thank you. This can land up anywhere between, you know, 12 to 15 billion by the end of the year. Now, As far as business development is concerned, and the way Unpadirji talked about one large acquisition through collaboration, which we've done, for these six months, we've sold about 1.6 million square foot, but in terms of new business development, we've added almost close to 10 million square foot of developable area. So, there's a net addition of about 8.4 million square foot of developable area. The two primary... Acquisitions are in Faruk Nagar and in the Sona market. As far as Faruk Nagar is concerned, it could be termed as a new micro market within Gurgaon. The location is just about 15 minutes from the Dwarka Expressway. And the connectivity is very good, as in the road infrastructure leading up to this project is fantastic because just of the Dwarka Expressway, there is a Patawji Expressway. And this is just off that. in the region at a very good pace, and it is kind of paving way for, you know, newer locations and more developments. And Faruknagar is a good example where we've got like a massive 194-acre land parcel now, wherein about 25 acres was acquired by the company, and about 169 acres came in the form of collaboration. The aim is to develop this as one of its kind. Thank you. Delhi Master Plan. has announced that only in Delhi, farmhouses can happen, which are of at least two and a half acres. Whereas in Gurdav, we can do farmhouses which are upwards of one acre, as in, there's a lot of these developments which are mushroomed in and around Delhi, as in, the quantums are huge, but any farmhouse within the Delhi premises... Workable in Delhi, a lot of people who want, like, you know, legit, good, gated, well-serviced, high-quality. Delhi and Delhi Airport would be less than an hour away, like within 45 to 50 minutes from the airport, you know, you can probably reach the Faruk Nagar as a destination. So, you know, we are very bullish on this particular product, which will take some time to be launched. Which has come to us. Besides this, we've added about 31 acres, again in the form of a collaboration in the Sona market. We've earlier done project duction, which is about 125 acres. So in and around duction, we've added about 31 acres. There is more coming during the second half of the year, which has a developable potential of about 2.7 million square foot. And there are some additions, smaller additions in sector 71 and sector 3070. Put together, I think it's about 10 million square foot which has been added and about 1.6 is something which we have sold. So, there's a good addition to the development, you know, under our portfolio as of today. Operating cash flows. A lot of it has also happened in the form of collaboration agreements. Comfortable limits are net debt number, if you look at it, stands at about 4.5 billion. Sitting in the balance sheet of about 24 plus billion INR. It's similar as previous here. It's here rated as A+, and with a stable output. Looking at the overall portfolio numbers, we've delivered till date about 19 million square foot. There's another 9 million, which is reaching the delivery stage fairly soon. It cost about 23 odd million square foot. Now, which is, again, in preparation of launch over the coming two years, if you look at the recently launched portfolio, the GDV stands at about close to 35 odd, 350 odd, you know, billion INR. The number will stand anywhere between, you know, 300 to 350 billion INR. So this is like a massive, massive... Land situation, which we've created in the company, and the balance sheet still looks On the 5th of March, we had consummated the transaction around a mixed-use development along with the RMV group. Just to recall, that's about 5.6 million square foot of... We have two hotel developments and a design district, as in a high street retail format, which is being introduced into the development. So this is, again, one of its kind development coming up in Gurgaon at a very prime spot on the southern peripheral road. And, you know, we partnered with the RMZ group on this. We're not reaching any launch or, you know, any construction start stage, but, you know, we are doing good progress in terms of concluding on the overall design and development of this project. We had appointed KPF as an architect for this. It's one of, amongst the best, you know, architectural forms in the world. So KPF has been doing the overall master planning and, you know, layout massing of this project. And I think we are progressing well on the approval side. There's good coordination happening alongside, along with the RMZ team, to see that this project... The bulk of this project will be in the form of a yield portfolio. Thank you. 14 billion-odd INR for... Thank you. With regard to our overall annual guidance of about 50 billion of completions for this particular year, which will also give a good push to the collections. And some of these projects tend to be lumpy and hence have, you know, bigger impact on the revenue recognition aspect as soon as they get completed. But for the first half, we completed projects close to about, you know, 14 odd billion worth. The gross profit for... The performance period stood at about 31%, whereas for the second quarter, where we saw more mid-income completions rather than affordable housing completions was... The EBITDA margin for the full half-year, as in for the half-year, was 13%, but for the second quarter, it stood at about 18%. We also are recognizing a part of close to about 50-odd groves. So, overall, a healthy situation, but much more to happen during the second half and very much in line with our stated guidance. So, on all four parameters, whether it is launches, sales, collection, or... You know, revenue recognition basis completions, we stay put to our guidance at the start. We'll take any...

Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Parves Kazi with Novama Group. Please go ahead.

Hello. Hi, good morning, and thanks for taking my question. So, a couple of questions from my side. First, you alluded to significant launches in H2, both in SPR and Dwaraka Expressway. So, just in order to get some more color on it, what kind of launches do we foresee in Q3 and also in Q4 and what could be the GDB of those ones?

Sure. Anything else besides the launches you want us to address?

The second question is on the BD spend. So, overall, BD activity has been very strong in H1. I think overall, including approvals, we have spent something like 560 crore in H1. So, what is this number going to be for the year as a whole? That's my second question. And the third is, I mean, we have seen over the last one year launches in the core market. But beyond that, when can we see the next launch in Sauna? When can we see the next Sauna launch?

So, for which, in a way, launches, I think technically there will be launches on all three fronts. Sector 71, we intend to come up with another 2 million plus square foot launch. The last one was in May. I think I can't put an exact, you know, month to it right now, but it is at very advanced stages of. You know, pre-launch stage, you know, work. So there's another 2 million square foot launch, 2 plus million square foot launch, just next to the Tonino-Limbogany residences, which is going to be the next large launch, which is coming up. Then on the Dwarka Expressway, there is, you know, a project which is just on the... So, like, it has frontage on the Dwark Expressway. It's not very large, but, you know, it will be, like, kind of an iconic, you know, single tower, which is expected to get launched again sometime soon. And even in Sona, see, there's a phase of launch, which is pending some approvals and some pre-launch days. Richard, again, no. I think a 2 million-plus square foot in sector 71 and about, you know, less than half a million square foot, about 300,000 or 400,000 square foot in sector 3070, something which are the immediate next launches which are getting planned. As far as the business development is concerned, See, the activity is quite high. We are in the middle of seeing quite a few transactions, and, you know, we are hopeful that the business development pace will continue for the balance portion of this year. As a very... for the entire year is that, you know, to the tune of our operating cash flows, we may end up doing that much business development. So, while this new business will get added, you know, it will not have any significant impact on the debt level of the company. So, you know, if the OCF is going to be anywhere between, you know, 12 to 15 billion, you may also expect business development to that tune for the current year.

The next question comes from the line of Pritesh Seth with Axis Capital. Please go ahead.

Yeah, good morning, and thanks for taking my question. Firstly, on, you know, the Sussman sales, I think I would say, like, a lot of players within NCR have done a little well on the Sussman's part. We had a, you know, decline in terms of our usual run rate of 2,000-odd crore. So, any specific reason you want to, you know, assign to that? And, um, uh, second on the, um, This is Faruk Nagar. You know, if you can just highlight what's the size of that Amos Villa kind of a market, you know, how much share we are applying to capture there on that sense. And lastly, on, again, collections and OCF guidance, how confident you are on meeting that, you know, this year, while for now we are tracking a bit behind. So just some sense of that. So three questions. Thank you.

On the sales aspect, like I said earlier, we were by and large targeting about 40% of the annual target to happen out of. God, that, you know, we've... with our target. Because this is not a usual product, you know. Unorganized market where very high ticket farmhouses are getting sold within Delhi, and these ticket sizes are really high. You know, the farmhouse areas where farmhouses in Delhi are getting sold for upwards of 100 crores as well, and that's like a usual market for those. Of course, our product is not in that range at all. We'll be much, much lower and, you know, of that kind of product. But this is like a... First of its kind product from... This will be fairly unique in that sense, and it is fairly close today. As OCF and collections are concerned, yes, we stay confident on our, you know, annual guidance. We know there's a fair bit of work to happen in the second half of the year, but we are fairly hopeful that some of these completions which we are targeting within this year are happening, and, you know, hence we'll get a fill-up to our collections during the balance part of the year. And as collections grow up, you know, OCF definitely, you know, goes in line with collections.

And just one last bookkeeping one, like, what's the inventory right now that we will have for the launch projects? You know, you give inventory for ongoing projects, but I can't see from the recent launches how much inventory is there. So just that number if you have handy.

Just one second. We'll pull it up during the course of this call. Yeah, okay.

Sure, sure. Okay, okay. That's it from my side. Thanks, and happy to give you all it to the team. Thank you.

The next question comes from the line of Adidev Chattopadhyay with ICICI Securities. Please go ahead.

Yeah, thank you for the opportunity. Could you just help us understand the impact of GARP now on possibly the construction progress across projects? And in our business plan, how we prepared for it? Because it seems to be a recurring thing now. So just if you could help us understand the construction material availability and our execution timeline, how are you working in the framework? That is the question.

So, this is a recurring and perpetual sort of an issue, the way it seems. So, the way we plan is to work for about 10 months in a year, and we are always assuming that, you know, these NGT ban on construction activity will. This is not going. This is planned within our construction activity. Thank you.

Sales guidance for the year now, we are expecting to do it mainly in line, or we are hoping to beat the guidance, or what is the sort of sense you are getting on the demand side and pricing in the Gurgaon market across the segment? You could help us understand that.

At this stage, I will say we are in line with the sales guidance. Markets holding up steady despite whatever macro headwinds which we have seen over these last six months. The market is still holding up quite steady. Thank you. I think real estate has given a sense of comfort to people because it tends to act like an inflation hedge as well. And if you really look at the actual supply, it's still very low. Thank you.

Oh, sure. So that is very helpful. Wish you all the best and happy Diwali.

A reminder to all participants, you may press star and want to ask a question. The next question comes from the line of Harish Patuk with Motilan Oswal. Please go ahead.

Yeah, hi, sir. Good morning, and thanks for the opportunity. So, my first question is on the construction cost. We have seen the cost declining on 1-8 as well as Q2 basis. So, can you please highlight, you know, has the existence slowed down, or is it something that we are facing on ground? If you can please highlight.

Sorry, Harsh, your voice was a little unclear. So, are you talking about construction escalation, construction cost escalations?

Yes. So, in the first half, we have incurred, I think, 880 crores of construction cost. If I see the fine item on the cash flow statement, in one half, similar last year, it was 970 crores. Even if I look at the second quarter, there has been a decline. So, what's the possible reason for this, please?

So, it's tough to do a line-to-line, you know, comparison in that sense, but one of the reasons you can, you know, allocate to this is that, see, there are two large plotted, so one large plotted development where a lot of work is happening, which is our project called City of Colors in Manasar. So it requires a fair bit of work and, you know, activities when you're doing these plotted developments with the construction spend is usually not very high. And second is that within Project Dakshin, there's an industrial, you know, plotting block, which is again pure plotting development. Both of these are, you know, nearing completion. We are expecting, you know, completion-related approvals from the government within this year. So, both of these locations, while they'll contribute significantly to the revenue recognition, to collection, and even in terms of construction coordination, you know, it is kind of, a bit of heavy lifting is happening. But, you know, it does not translate into very high construction cost. So, that is one reason why construction is going on. We've had, like, reasonable six months during the first half of the year. But, you know, maybe that's one reason why you're not seeing the number surpassing the previous year's number.

Sure. So what is the number that we should be building in for the full year? And can we expect that, you know, given how the cost towards construction has been, can we expect collections commensurately catching up or how do you see the dynamics playing out?

So, see, as a longer-term trend, you know, if you look at the construction costs, we've seen a late single-digit escalation, you know, which happens. So if you look at the last decade every year, we see that on an yearly basis, you know, as labor and material put together, the numbers tend to... You know, escalate anywhere between 7 to 9 percent. So, it usually doesn't cross like double digits and, you know, late single digit escalation has always been there. And which we are able to factor into our own models while we are taking up any new project or we are starting any project. So, this is the same number which we are anticipating for this particular year. I don't think while costs have gone up, on a combined basis, they will not go into the double digits. For the year, I think this number will be more than double for the first half of the year, but it will not probably reach, you know, 2,000 growers.

Understood. So, should we expect the same impact on collections, or like you highlighted earlier in the call, we can expect some catch-up in the collections or maybe some growth on a year-on-year basis for the full year?

No, this year, I think, because some of these plotted developments are getting completed, both in Sona, which is Daksin, you know, X Factor. As a project name and City of Colors, while construction spends will happen, but I think it will have an incremental impact on, you know, collections and revenue recognition.

Understood. And my another question is on the project, Lamborghini project that we launched in June. I see there is some revision, very minor change, but some revision in the launch value. I think last we had mentioned 44 this quarter, it's 43. So it is insignificant, but is it that we have taken some price revision here or why is the value lower?

How should we can... Maybe address that separately. For these minor evidences, I am not very sure why.

Sure, no worries. Just last question on the brokerage part. So what kind of broking expense are we incurring on this Lamborghini project?

Usually, brokerage slabs are in this 3% to 5% range. PL will be closer to about 4%.

Okay, sir. Thanks a lot for taking my questions, and all the best, and best wishes for the festive season. Likewise, Ash. Thanks a lot.

Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to the management for the closing remarks.

Thanks, everyone. Happy Diwali. Thanks a lot again. Thank you, everyone.

Thank you, sir. Ladies and gentlemen, on behalf of ICICI Security is Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.