This article first appeared on GuruFocus .
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Revenue:Reported revenue from operations grew 27% year-on-year to INR425 crores.
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Normalized Revenue:Adjusted for finance lease accounting, normalized revenue stood at INR437 crores, up 35% year-on-year.
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EBITDA:Reported EBITDA increased 28% year-on-year to INR162 crores, with EBITDA margin expanding to 38.2%.
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Cash EBITDA:Stood at INR44 crores, up approximately 34% year-on-year, with cash EBITDA margins at 10.1%.
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Profit Before Tax:Reported PBT stood at INR24 crores, up 135% year-on-year.
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Co-working and Allied Services Revenue:Grew 27% year-on-year to INR352 crores.
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Construction and Fit-out Services (Transform) Revenue:Grew 25% year-on-year to INR73 crores.
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ROCI:Sustained at 55%.
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Net Debt-to-Equity:Maintained a net cash position with net debt-to-equity at negative 0.08 times.
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Centers:Operated 242 centers across 18 cities as of June 2026, with another nine centers under fit-out, taking the total network to 251 centers.
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Seats:Operational capacity increased to approximately 159,000 seats, with total capacity, including centers under fit-out, reaching 170,000 seats.
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Occupancy:Occupancy across centers operational for more than 12 months stood at 83%, while overall portfolio occupancy held steady at 76%.
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Client Base:Active client base increased to over 3,600 clients, with weighted average client tenure at 38 months and average lock-in tenure at 26 months.
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GCC Clients:Served 100-plus unique GCC clients, contributing 24% of rental revenue.
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Release Date: August 13, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Revenue grew 27% YoY to INR 425 crores, with EBITDA up 28% to INR 162 crores and margin expanding to 38.2%.
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Strong demand from GCCs and enterprises, with 100+ GCC clients contributing 24% of rental revenue and a robust pipeline of new mandates.
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Capital-efficient model with net cash position (net debt-to-equity at -0.08x) and industry-leading ROCI of 55%.
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Expanding premium portfolio with 37 gold/elite centers and new co-branded developer partnerships, expected to command 30-50% higher pricing.
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Diversified client base across sectors and geographies, with weighted average client tenure improving to 38 months and lock-in tenure to 26 months.
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Transform business scaling well, with 92% third-party revenue share and a strong pipeline of large mandates (INR 200+ crores).
Negative Points
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Occupancy in mature centers dipped to 83% due to a one-off exit of a large enterprise client (3,000 seats), impacting near-term performance.
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Cash EBITDA margin remains low at 10.1%, with H1 margin pressure from commercial resets and timing differences in passing on rental increases.
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Rental payments increased significantly (from INR 85 to 130 crores) due to new leases, raising concerns about cost management.
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Revenue growth (65%) has not outpaced chargeable area growth (68%) over the past eight quarters, indicating stable per-square-foot revenue.
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Guidance for FY27 cash EBITDA (INR 190-200 crores) implies a margin of ~10%, which may be below investor expectations for higher profitability.
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Portfolio consolidation led to exiting ~1,800 seats in Q1, reflecting ongoing churn and the need for disciplined portfolio management.
Q & A Highlights
Q: Can you explain the jump in rental payments despite modest seat additions, and is the strategy of moving towards straight leases benefiting margins? Will you continue with more straight leases going forward? A: Sumit Rochlani (CFO)clarified that part of the rental expenses are also disclosed in other expenses, which have remained flat. When considering both, the growth in rental payments is in line with seat growth. Amit Ramani (Chairman)added that the blended occupancy held flat at 76% despite absorbing a large enterprise consolidation, and the mature cohort dipped marginally to 83% from 84% entirely due to that one-off exit. He emphasized that managed aggregation (MA) remains an important part of the supply strategy at 57% of current supply, but the company is not fixated on the MA versus straight lease split. They are becoming more selective, choosing whichever structure delivers the best realization and risk profile for a given asset, broadening the playbook rather than shifting away from MA.
Q: What is the revenue and cash EBITDA guidance for FY27, and is the margin guidance understated given the mature cohort occupancy? A: Sumit Lakhani (CEO)explained that the cash EBITDA margin is currently around 10%, but H1 has been impacted by a large customer moving out and commercial resets on properties signed in 2021, creating a timing gap between rental increases paid and received. He stated that H2 will outperform H1, and the company expects full-year revenue of around INR1,800 crores with cash EBITDA of INR195-200 crores. He is hopeful that Q4 will show a meaningful difference in both occupancy and margins as new elite and gold centers come online.
Q: Can you provide more details on the developer partnership model, including the stage of construction at signing, capital contributions, and lease tenure? A: Sumit Lakhani (CEO)stated that these are true partnerships where the developer invests in fit-out capital and provides preferable rent, with profit sharing. Properties will go live over 6 to 12 months, with centers opening between 9 to 15 months. Awfis contributes around 50% of the fit-out value, with a small security deposit at signing. The lease tenure is nine years, starting from the date of receiving the occupation certificate (OC) for the building. The strategy is to lock in Grade A+ supply across key micro-markets, with properties going live from 6 to 24 months.
Q: The chargeable area grew 68% while revenue grew 65% over the last eight quarters. Is per-square-foot revenue stable or declining, and what is driving this? A: Sumit Lakhani (CEO)corrected the analysis, noting that chargeable area includes seats under fit-out that are not yet live. He highlighted that net operational seats grew 59% from 100,000 in Q1 FY25 to 159,000 in Q1 FY27, while revenue grew 65%, indicating outperformance. He added that price realization per seat has been increasing every quarter due to contractual escalations of 4-7% and the focus on premium centers over the last 12-14 months, which is reflecting in overall price realization.
Q: What is driving the 92% third-party revenue share in the Transform business, and is it sustainable? What are the margins? A: Amit Ramani (Chairman)explained that Transform has structurally flipped from a captive fit-out arm to a majorly third-party design and build business, driven by enterprises and GCCs engaging Awfis directly for multi-city mandates. The split will move around quarter to quarter based on project delivery mix, but the number should stay structurally high. On margins, he noted that landlord partner projects have about a 15% gross margin, while third-party margins range between 18-20%, with the blended margin in the 17-18% range.
Q: How is the GCC industry evolving, and where does Awfis stand in terms of contribution from GCCs? A: Amit Ramani (Chairman)highlighted that India's office market delivered its strongest first half on record with gross leasing of approximately 43 million square feet, up 5% YoY. GCCs leased 16.5 million square feet, growing 38% YoY and accounting for almost 38% of total office leasing. Flex operators posted their strongest half-year performance, leasing 8.4 million square feet, a 55% increase. Flex penetration of overall leasing has climbed to 21% and is on a path towards 25% by 2027. Awfis serves 100+ unique GCC clients, contributing 24% of rental revenue, and this trend is expected to continue growing.
Q: Are there more developer partnership deals like the one with Malpani Estates in the pipeline? A: Amit Ramani (Chairman)confirmed that there are a couple more deals being curated, but noted these take longer due to the complexity of partnership structures compared to straight leases. He emphasized that Awfis is only partnering with Grade A+ developers, which limits the pool of potential partners, but the company wants to ensure it partners with the right developers for its premiumization strategy.
Q: What is the current premium portfolio mix, and how will it evolve by FY27 and FY28? Are all these institutional assets? A: Amit Ramani (Chairman)stated that out of 242 live centers, roughly 37 are in the gold and premium category, making up about 15% of the portfolio. With seven additional properties in LOI stage and six in fit-out stage, all of which are premium, the mix is expected to shift from an 85/15 split to closer to an 80/20 split by the end of FY27. He confirmed that all of these are institutional assets in select micro-markets.
Q: What is the CapEx guidance for FY27? A: Amit Ramani (Chairman)stated that the CapEx guidance for FY27 is roughly in the range of INR200-210 crores.
Q: When will we see meaningful improvement in occupancy and margins? A: Sumit Lakhani (CEO)noted that this was the first quarter where occupancy remained flat, whereas it
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
