Signatureglobal (India) Limited (SIGNATURE) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Signatureglobal (India) Limited Q1 FY '27 Earnings Conference Call hosted by ICICI Securities. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Adhidev Chattopadhyay. Thank you, and over to you, sir.

Good evening, everyone. On behalf of ICICI Securities, I'd like to welcome everyone on the Signatureglobal call today. As always, from the management, we have with us Mr. Pradeep Kumar Aggarwal, the Chairman and Whole Time Director; Mr. Lalit Kumar Aggarwal, the Vice Chairman and Whole-Time Director; Mr. Ravi Aggarwal, the Managing Director; Mr. Devender Aggarwal, the Joint Managing Director and Whole Time Director; Mr. Rajat Kathuria, the Chief Executive Officer; Mr. Sanjeev Kumar Sharma, the Chief Financial Officer; and Ms. Preetika 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.

Quarter 1 FY '27 earnings conference call of Signatureglobal. Thank you for joining us today. I hope you have had the opportunity to review our financial results and investor presentation shared earlier today. 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 RERA to grant a 4-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 & Wakefield, 18,470 residential units were launched in Delhi NCR during H1 2026, making a 10% year-on-year increase. Gurugram retained its position as a premium residential hot spot, accounting for 74% of all luxury housing launches. Additionally, the average launches price of home in Delhi NCR rose 24% year-on-year in quarter 2 '26, reflecting sustained demand for premium housing in the region. Against the positive backdrop, Signatureglobal continued to increase its presence across the residential macro market while expanding its diversification strategy. During the quarter, we entered in a branded residence segment through our collaboration with our Tonino Lamborghini for a premium residential project in Sector 71 on Southern Peripheral Road, Gurugram. This launch aligned with the rapid growth of the branded residence segment, which industry estimate projects will expand by nearly 60% by 2027, driven by the rising demand for premium and experience-led living, the strong response to the first phase of [ sales ], further confidence in this segment. And we will continue to pursue similar opportunities that align with the evolving customer aspirations. The quarter also reflected steady operational progress, healthy demand across our projects, improved sales realization and sustained momentum in our core markets. This performance was supported a very healthy project execution, improved operational efficiency and successful monetization of our portfolio, 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 Gurugram and the wider NCR region. Our focus will continue to be on timely delivery, project delivery, customer certainty, financial discipline and catering long-term value for all stakeholders. With that, I would now like to invite our CEO, Mr. Rajat Kathuria, to take you through the company's financial performance in detail. Thank you once again for joining us today and for your continued support of Signatureglobal. Thank you.

Thank you, Pradeep ji, 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 size 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 INR 22,000 a foot. Hence, taking the GDV value in excess of INR 4,000 crores, about INR 44 billion to be precise. So overall, the project had more than 800-odd units. We opened up about 400 plus -- 400-odd units for the first phase of sale and more than 300-plus units were sold. So if you -- 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. There were every day bad print, bad media stories getting covered, currency devaluations being talked about, et cetera. But given all of that, I think we were very happy with the way the project launch happened and performed. And it's satisfying in the way it has happened. We'll be planning more launches for the year. Our overall guidance stays firm to come up with new launches worth INR 150 billion for this year. So there are more launches planned during the third and the fourth quarter. More around Diwali, 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 INR 150 billion for this particular year. I would also like to point out that if we look at the previous 8 to 9 quarters, we've consistently been launching projects across categories and across markets within Gurugram, whether these are larger townships where we launched 2 large townships, one of 125 acres, the other of 140 acres and consistently launching group housing projects starting from De Luxe DXP to Titanium, Cloverdale and Twin Towers and now Tonino Lamborghini. So all these launches have been done in good tandem because our fundamental thesis and learning of working in this market is that it's hugely supply constrained. Gurugram market saw very little supply creation happened between 2014 and '22 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 Signatureglobal has been working upon over the last few years. As far as the numbers go, yes, we've done close to INR 2,000-odd crores, about INR 20-odd billion of sales, presales got achieved. Given our launch pipeline, we stay confident of achieving about INR 100 billion of presales 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 3 tends to be a good quarter in North India. And with more launches planned around that time, we are feeling comfortable with INR 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 INR 17,000 a foot. For the whole of last year, this number stood at a little above INR 15,000-odd a foot. So we've grown significantly in terms of price per square foot, which is primarily driven by more premium launches or premium launch within this first quarter. That's one of the primary reasons why the per square foot realization has gone up. But even in general, in Gurugram, we are seeing at an industry level, people getting an inflation plus level increment in selling prices. Primary reason for that being that demand is outpacing supply and demand is steady. Hence, developers are feeling confident of enriching the product, giving better quality product and backed up by a 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 2 metro development is approved, and that's like going to be, again, a game changer for the Gurugram city. So overall prices continue to go up. We've also followed -- in line with the trend, we've also witnessed realizations going up. As far as our collections are concerned, I think we collected about INR 6.7 billion during this quarter. This number will grow significantly during the current year because collections often are 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 INR 5,000-odd crores and recognizing revenue of like INR 5,000-odd crores, about INR 50-odd billion. And hence, in line with that, collections are expected to pace 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 completion time line like 2 to 3, 2 to 2.5 quarters. By another 4 quarters or 5 quarters, bulk of this 9 million square foot would have been completed with a few exceptions, but the average completion time frame of this 9 million square foot just anywhere between 2 to 3 quarters now. In terms of recently launched project, like I just talked about that we've consistently created supply. We've launched projects of almost like 23 million square foot since February '24 when we launched a group housing project called De Luxe DXP. The GDV value of all these launches is INR 334 billion. So this is one other significant bucket. So a lot of portfolio is actually converting into cash. These are not just futuristic land parcels, which will be getting launched in 5 or 7 or 10 years. This is actually projects where work has commenced, and we are actively developing these projects now. Besides that, there's 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. Now, as far as adding to the portfolio is concerned, we are very actively involved in doing new business development during this year. And we are very hopeful of adding a significant amount of land within our core markets and even outside of our core markets. And by outside, I mean markets outside of the Delhi NCR. So both of these markets, we are very hopeful of doing significant new business development. Besides that, the balance sheet position of the company stays very good. We are sitting on cash and bank balances of close to INR 25 billion. Our net debt position is close to less than INR 3.9 billion. So very low levels of net debt. While doing business development during the year, the net debt numbers could go a little bit higher, not significantly higher, but these could grow as during this year as we intend to do significant amounts of business development. Besides that, I think there were a few project completions. We completed a few affordable housing projects. There's just a 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 realization of inventory which got completed during this quarter was less than INR 6,000. So while currently, we are selling at an average realization of INR 17,000. During the first quarter, our average revenue was recognized on inventory, which got completed was less than INR 6,000. And hence, 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 INR 50 billion and show a very good PAT number emerging out of historical projects which are getting completed. So by and large, we stay comfortable with our overall business guidance. The business performance is steady, completions are happening at a good pace. Rains have been quite heavy last couple of days, but by and large, we've got good number of working days. There weren't -- there are too many disruptions happening out of rain this year. And we are fairly confident with regard to timely completions and collections and launches are planned. 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. And just to add on, I think in terms of a bit of flavor on the nature of business development, we are -- we feel comfortable doing large format developments, the way we've seen success of Project Daxin and Project City of Colours in our core market, we want to take that particular product segment across various markets even outside of Delhi NCR. And low-rise developments, large format developments spread across 100, 150-odd acres is somewhere we are focusing on, and you will see more additions on that format happening during the rest of the year. Happy to take up any questions, which you guys want to ask.

[Operator Instructions] The first question is from the line of Parvez Qazi from Nuvama Group.

So my question is regarding business development activity. If I heard you right, you said that we are looking at projects outside NCR also. I mean, did I get that right?

Yes, Parvez, that's right.

Have you firmed up which geography are we looking at? Is this largely going to be North India or we are okay looking at other metro cities as well?

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 NCR market as well.

Sure. And ballpark, I mean what kind of land CapEx are we comfortable with during the current days?

So see, the number could be in the range of around INR 1,500 crores to INR 1,800-odd crores for the year.

Regarding our launches in H2, fair to suggest that one of them could be in Dwarka Expressway and the other at SPR?

It could be -- 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. First quarter, we had a launch with a GDV of about INR 4,400 crore. With a guidance of about INR 15,000-odd crore, that leaves almost about INR 10,000 crores, INR 10,500 crores 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 also?

See, there will be some launches outside. I'm not saying the entire INR 150 billion gets achieved out of the single market. But yes, a good portion of the launches for the current 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, which is coming out very well in the last couple of years.

And last question, in SPR, we are comfortable with the kind of ticket size and the unit size which we have roughly about INR 5 crores, INR 5.5 crores. Would that be a fair assessment?

Yes.

[Operator Instructions] The next question is from the line of Pritesh Sheth from Axis Capital.