EFC (I)

EFC (I) delivered robust Q3 FY25 results, with revenue reaching ₹181.5 crores, marking a sequential growth of 6.1%. EBITDA grew by 10.3% QoQ to ₹96.92 crores, and PAT increased by 10.7% QoQ to ₹40.47 crores. For the nine months of FY25, revenue totaled ₹457.87 crores, already surpassing the full FY24 revenue by 7%, demonstrating strong profitability and operational execution while navigating a dynamic business environment.

The Leasing vertical achieved significant milestones, expanding its Asset Under Management (AUM) to over 2.6 million square feet across 70 sites, with a seating capacity of 57,000 seats and a healthy 90% occupancy rate. Average rent per seat stood at ₹6250 and upwards. In Q3, the company added 2 lakh square feet to AUM and 5650 seats, contributing to a rental revenue of ₹96.34 crores, a 31% year-on-year growth, with EBIT surging 157% YoY and 37% QoQ.

The Design and Build vertical recorded exceptional growth, executing projects spanning over 4 lakh square feet. It reported a 51% increase in revenue and 27% growth in EBIT year-on-year, with a total project pipeline of ₹92 crores. The Furniture Vertical (The Ek Design) generated ₹13.33 crores from completed projects in Q3, with an order pipeline of ₹8.57 crores for completion within 30 days and an additional ₹14.35 crores within 30-60 days. Management expects the furniture division to achieve a 30% EBITDA margin going forward^⏳.

EFC (I) announced receiving the Certificate of Registration for its EMBERSTONE SM REIT, which will be managed by its subsidiary, EFC Investment Manager Private Limited. The company expects to file the DRHP with SEBI in February, with the IPO to follow upon approval. This initiative is strategically important as it is expected to directly add to the company's bottom line through service fees for managing and operating the REIT properties, as associated operational expenses will be booked by the SM REIT.

For the Leasing vertical, EFC (I) plans to add around 25,000 seats annually, with a CAPEX of approximately ₹50,000 per seat and ₹10,000 for deposits, totaling an outlay of around ₹150 crores. The company aims to fund a significant portion of this CAPEX through landlords to maintain an asset-light model. The Furniture vertical will primarily require working capital investments for its projected ₹150 crore business next year, with no further CAPEX needed for plant and machinery as infrastructure is already developed.

Management revised its FY25 top-line growth guidance from the previously stated target of 'doubling' to 'around 50% more than the last year.' This adjustment reflects a more realistic outlook while still indicating strong growth for the fiscal year. Despite this revision, the company highlighted a significant improvement in profitability, with a more than 50% increment in PAT for the nine months of FY25 compared to the previous full year, emphasizing efficiency gains through its integrated model.

The company addressed the sharp rise in interest costs, attributing it to the acquisition of a property in Wakadewadi, Pune, involving a ₹55 crore loan, and IndAS implications for new live sites. Other expenses saw a dip due to one-time^📎 expenses booked in Q1 not recurring in Q3. Management clarified that the Design & Build division aims for 17-18% margins, while the leasing vertical's EBIT margins, after accounting for interest costs, are expected to be around 30%, aligning with investor guidance.

EFC (I) is actively diversifying its client base across various industries beyond IT/ITES/BFSI, including education and healthcare, to mitigate risks from potential economic slowdowns. Management believes the office market and flexible leasing models will remain robust for the next 1-2 years, driven by demand for asset-light solutions. The integrated structure with multiple revenue sources (Leasing, D&B, Furniture) provides a hedge against sector-specific downturns, ensuring sustained growth.