This article first appeared on GuruFocus .
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Revenue from Operations:INR1,493 crores, a 24% increase year-on-year.
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Co-working and Allied Services Revenue:INR1,237 crores, a 35% growth year-on-year.
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Operating EBITDA:INR550 crores, a 37% increase year-on-year with margins expanding to 36.8%.
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PAT before Exceptional Items:INR71 crores, a 66% growth year-on-year.
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Q4 Revenue from Operations:INR410 crores, a 21% increase year-on-year.
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Q4 Co-working and Allied Services Revenue:INR342 crores, a 27% increase year-on-year.
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Q4 Operating EBITDA:INR152 crores, a 31% increase year-on-year with margins at 37%.
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Q4 PAT:INR23 crores, a 107% increase year-on-year.
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Cash Generated from Operations:INR655 crores for FY26.
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ROCE:Sustained at 60%.
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Annualized ROE:17%.
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Net Cash Position:Maintained throughout the year with net debt to equity at negative 0.20.
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Total CapEx:Approximately INR208 crores for FY26.
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Release Date: May 25, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Awfis Space Solutions Ltd ( NSE:AWFIS ) reported a 24% year-on-year increase in revenue from operations for FY26, reaching INR1,493 crores.
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The company's co-working and Allied Services segment grew by 35% to INR1,237 crores, adding INR321 crores of incremental revenue.
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Operating EBITDA increased by 37% year-on-year to INR550 crores, with margins expanding to 36.8%.
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Awfis maintained a net cash position throughout the year, with a net debt to equity ratio of negative 0.20.
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The company achieved a return on capital employed (ROCE) of over 60%, reflecting strong capital efficiency.
Negative Points
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The Design and Build (D&B) segment experienced softness, impacting consolidated revenue growth.
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The company faced a 5% closure rate in its seat portfolio due to portfolio rebalancing and exiting certain centers.
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There was a significant increase in the payment of principal portion of lease liabilities due to new seat additions and escalations.
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Awfis's revenue-to-rent ratio stands at 2.3%, which may be a concern compared to peers.
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The company has not reported any other income for FY26, unlike INR132 million in FY25, due to the sale of its facility management services business.
Q & A Highlights
Q: When you refer to your occupancy, is the base on operational capacity or on the total supply of 167,000 seats? Also, what's the margin profile on the D&B business, and could you provide the revenue-to-rent ratio? A: Occupancy is calculated on the total operational seats, which is around 157,000 seats. The design and build margins are close to 7% to 8% net. The revenue-to-rent ratio is approximately 2.3%. - Sumit Lakhani, Deputy CEO & Sumit Rochlani, CFO
Q: What is the operational chargeable area as of 4Q '26, and are the centers assigned to the partial managed office likely to be bigger than typical Awfis centers? A: The operational chargeable area is calculated at 50 square feet per seat. Partial managed office centers are typically 30,000 to 50,000 square feet, but can go up to 65,000 to 70,000 square feet depending on client demand. - Sumit Lakhani, Deputy CEO
Q: What is the highest sustainable level of blended occupancies in your portfolio, and what would drive that improvement? A: The blended occupancy is currently at 76%, with mature centers at 84%. We aim to improve this by deeper GCC and enterprise penetration, longer tenured deals, and active renewal management. We expect a couple of hundred basis points increase over the next quarters. - Sumit Lakhani, Deputy CEO
Q: With the growth in your D&B business and a higher proportion of Elite and Gold centers, how do you expect EBITDA margins to trend over the next few years? A: We anticipate a significant uptake in EBITDA margins due to our premiumization strategy and the growth of the D&B business, particularly from third-party projects. - Sumit Lakhani, Deputy CEO
Q: What are the seat addition plans for FY27, and what kind of CapEx are you looking at? A: We plan to add 22,000 to 25,000 gross seats, translating to about 1.25 million square feet. The CapEx will be similar to FY26, focusing on Grade A and A+ buildings. - Sumit Lakhani, Deputy CEO
Q: Why was there a reduction in seat addition guidance from 40,000 to 32,000 seats, and what was the actual addition? A: The reduction was a deliberate choice for quality over quantity, focusing on Grade A+ buildings. We added 30,000 seats gross, with a net addition of 22,000 seats after closures. - Amit Ramani, Managing Director
Q: Could you explain the partial managed office format and its significance for Awfis? A: Partial managed office involves signing a new property with 40% to 60% of seats pre-committed by a client, providing anchor economics from day one and yield upside from flex inventory. - Sumit Lakhani, Deputy CEO
Q: How do developer partnerships fit into your strategy, and what do these deals look like? A: Developer partnerships are an extension of our managed aggregation model, focusing on portfolio-level relationships with developers for co-working and flex centers, sharing risk and capital investment. - Sumit Lakhani, Deputy CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
