AWFIS Space Q1 FY26 earnings call

Awfis Space Solutions Limited reported a robust Q1 FY26, with revenue growing 30% year-on-year to INR335 crores. Operating EBITDA saw a significant 60% year-on-year increase, reaching INR127 crores, and the EBITDA margin expanded by 710 basis points to 37.8%. The company achieved a PAT of INR10 crores, up from INR3 crores in the same period last year, demonstrating strong execution and business model strength. Gross debt stood at a low INR7 crores, resulting in a healthy debt-to-equity ratio of 0.02.

The company added 6,065 new operational seats in Q1 FY26, bringing the total capacity to 140,186 seats across 220 centers. Including centers in fit-out and under LOI, total capacity is projected to reach over 165,000 seats across 246 centers, covering 8.3 million square feet. Exit month occupancy was 73%, with mature centers (over 12 months operational) achieving 84% occupancy. The focus on premium positioning, with 100% of new centers in Grade A assets, is a strategic shift to cater to discerning clientele like GCCs.

Awfis signed contracts for 15,000 new seats in Q1 FY26, a strong performance compared to 11,000 seats in Q1 FY25. Approximately 18,000 seats are already signed and scheduled for occupancy in Q2 and Q3, translating to INR463 crores in locked-in revenue. The client base is highly diversified with over 3,200 active clients, and 41% of clients operate across multiple centers. The average client tenure has increased to 36 months, with a 24-month average lock-in period, indicating strong client commitment.

Management anticipates margin expansion over the next 2-3 years, primarily driven by increasing blended occupancy, operating leverage, and the strategic shift towards premiumization with more Elite and Gold centers. Mature centers are expected to achieve EBITDA margins of 30-35% for straight lease models and 23-25% for managed aggregation. Corporate overhead efficiencies are also expected to contribute 0.2-0.5% annually to margin improvement.

The construction fit-out projects segment generated INR58 crores in revenue during Q1 FY26. The company reported a strong execution pipeline of over INR100 crores for this segment and expressed confidence in achieving strong growth for FY26. The segment margin for fit-out projects is approximately 7.5% at the PBT level, which has improved from around 6.5% in the last 1-2 years.

Awfis is strategically expanding its Elite portfolio, with 3 centers currently live (2,800-3,000 seats) and plans to add 3-4 more in the remaining year. The Allied Services segment grew 43% year-on-year to INR36 crores, driven by deeper penetration, F&B offerings, TechLabs, mobility products, and employee transportation services. The company also plans to invest INR7-10 crores this year in establishing a furniture business, initially for internal consumption and then for third-party solutioning, leveraging its access to 3,200 client companies.