Indiqube Spaces Limited — Q2 FY26 earnings call

Call held 10 Nov 2025

Management summary

IndiQube Spaces Limited reported strong Q2 FY26 results with significant year-on-year growth in revenue and EBITDA, driven by healthy occupancy levels and increased contribution from value-added services. The company achieved an 8% PAT margin and more than doubled its operating cash flow. Management outlined strategies for continued expansion in Tier 1 and Tier 2 cities, focusing on build-to-suit and renovated properties, while maintaining a strong client retention rate and targeting free cash flow positivity by FY27.

Highlights

  • Revenue for Q2 FY26 stood at INR354 crores, representing a 38% year-on-year growth.

  • EBITDA for Q2 FY26 was INR75 crores, which is up 74% year-on-year.

  • PAT margins improved significantly to 8% in Q2 FY26, compared to 3% in the same period last year.

  • Cash flow from operations more than doubled to INR151 crores in Q2 FY26, compared to INR64 crores in the same period last year.

  • Occupancy level reached 87% in Q2 FY26, up from 81% in the previous quarter, reflecting robust demand and client stickiness.

Key financials

  1. Revenue ₹354 Cr +38%YoY
  2. EBITDA ₹75 Cr +74%YoY
  3. PAT Margin 8%
  4. EBITDA Margin 21%
  5. Cash Flow from Operations ₹151 Cr
  6. Occupancy 87%
  7. VAS Contribution to Revenue 13%
  8. Capex H1 FY26 ₹179 Cr

What they filed

Q1 FY27: revenue up 36.9%, net profit up 35.1% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue252 268 297 309 350 +39%390 +46%401 +35%423 +37%
EBITDA145 158 170 188 208 +43%237 +50%248 +46%258 +37%
Net profit-53 -14 -31 -37 -30 +43%-17 −21%-23 +26%-24 +35%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Capital allocation

medium confidence
  • Capex ₹350 Cr
    • Advances for future signed projects
    • Settlement of prior period pending invoices
    • Investments in interior sit-out (financial leasing)
    • Renovation capex (per square foot) 500 Rs
    Meghna Agarwal: "INR179 crores capex also includes advances for the future signed projects. It includes settlement of the prior period pending invoices, investments in interior sit out, which is executed under the financial leasing, like the 60,000 square feet, which you're talking about." and "capex incurred on renovation is between INR500 and INR1,000 per square foot."

Guidance & targets

Revenue

  • Top line growth Revenue · next two years · High confidence 30%
    So, as Shamit mentioned earlier, we already signed 9.14. And this would become operational only in the next two years. And this would translate to almost like the top line growth to about 30% in the -- for the next two years.

    — Meghna Agarwal

Operational Area

  • Rent-paying area Operational Area · by March '26 · High confidence 7.6-7.67 million square feet
    Yes. So, my rent-paying area, I can give it to you, it will be around about 7.6 million, 7.67 million square feet. That would be my rent-paying area by March '26.

    — Meghna Agarwal

Occupancy

  • Occupancy level Occupancy · next two to three quarters · High confidence 85% plus or minus a couple of percentage points
    this 87% that you are seeing over the next two to three quarters, we see that this will be 85 plus or minus maybe a couple of percentage points.

    — Rishi Das

Profitability

  • EBITDA Margin Profitability · ongoing · High confidence 20% to 21%
    So that broadly basically talks about the margin expansion. I will say that our margin will be pretty much rain-bound in the 20% to 21%.

    — Rishi Das

Value Added Services

  • VAS contribution to revenue Value Added Services · next financial year · High confidence at least 15%
    These value added, we see that contribution increasing from 13% to at least 15% in the next financial year.

    — Meghna Agarwal

Cash Flow

  • Free cash flow status Cash Flow · FY'27 · High confidence breakeven or slightly positive
    FY'27? Yes, I mean, it will be breakeven or slightly positive, Mohit, definitely in FY'27, that's what we are seeing.

    — Meghna Agarwal

Growth Rate

  • Self-sustainable growth rate Growth Rate · next two financial years · High confidence 30%-35% (plus or minus 2%-3%)
    should be able to sustain a 30% kind of a growth rate, 30%-35%, maybe plus or minus 2%-3% here and there. I think that kind of growth looks very doable to us over the next two financial years for sure.

    — Rishi Das

Flex Office Space Stock

  • Total stock in country Flex Office Space Stock · next two years · High confidence 140 million square feet
    today we are almost at 100 million square feet, kind of a total stock of flex office space in the country, likely to go up to 140 million in the next two years, with an annual addition of about 20 million annually.

    — Rishi Das

  • Annual addition to stock Flex Office Space Stock · ongoing · High confidence 20 million annually

    — Rishi Das

Area Under Management

  • Additional AUM Area Under Management · per year · High confidence 1.3 to 1.5 million square feet
    addition will continue on top of this 9.14 million, about 1.3 to 1.5 million per square foot additional AUM

    — Rishi Das

Design & Build

  • Pipeline for design and build Design & Build · next two quarters · High confidence 1.5 lakh to 2 lakh square feet
    In the pipeline, I mean, we do have close to almost like about -- close to about, you know, in leasing like just next quarter next two quarters, at about 1.5 lakh to 2 lakh square feet of design and build in just like next two quarters.

    — Meghna Agarwal

What to watch in Q3 FY26

Rent-paying area conversion progress

By March '26
Current 5.8 million sq ft (Q2 FY26)
Target Progress towards 7.6-7.67 million sq ft

Why it matters

This indicates the rate at which signed area is converted into revenue-generating operational space, directly impacting future top-line growth.

my rent-paying area... will be around about 7.6 million, 7.67 million square feet. That would be my rent-paying area by March '26.

Risks & concerns

  • Impact of AI on office space demand

    low

    Management views AI as accelerating the adoption of flexible workspaces due to increased corporate demand for agility and flexibility, rather than posing a risk.

    Management acknowledged

Q&A highlights

8 direct
Hyderabad design-build project and its margin profile compared to conventional contracts Direct
So this design and build project comes under the bespoke model. And so the landlord deal was done by them. But the client really liked our platform and the way we have designed and managed the entire enterprise. So they signed up with us in the bespoke model... we have very healthy margins, which are actually in line with EBITDA margins.

Clarifies the nature of a significant new project and confirms its profitability aligns with existing offerings, addressing investor concerns about new business models.

Asked by Adhidev

Conversion timeline of signed AUM to rent-paying area and projected operational area by March '26 Direct
my 9.14 million square feet will be converted into a rent-paying area in about the next 18 to 24 months... my rent-paying area... will be around about 7.6 million, 7.67 million square feet. That would be my rent-paying area by March '26.

Provides clear timelines and targets for the conversion of signed area into revenue-generating operational space, indicating future growth visibility.

Asked by Adhidev

Drivers behind EBITDA margin improvement and sustainability of the 20-21% margin range Direct
year on year EBITDA margin, like last year, this was about 17% to 18%. Now we are at 21%... the salaries as a percentage of the revenue have come down by about 1% odd... commissioned the solar power plant... about one percentage point... rental inflation with our landlord... one percentage point delta... our margin will be pretty much rain-bound in the 20% to 21%.

Explains the specific operational and cost-saving drivers behind margin expansion and provides a clear, sustainable range for future EBITDA margins.

Asked by Shamit

Capex for H1 FY26, its components, and the outlook for FY26 and FY27 capex Direct
capex, as you rightly said, it is about INR179 crores... includes advances for the future signed projects. It includes settlement of the prior period pending invoices, investments in interior sit out, which is executed under the financial leasing... this time is about INR179 crores, something equal. We are expecting in the next H2 also... should remain in a similar range, even for the next year, and also, whatever we have in FY 2026.

Clarifies the components of capex, explains the timing mismatch with seat additions, and provides a consistent outlook for future capex, aiding financial modeling.

Asked by Girish Choudhary

Sustainability of the current 87% occupancy level going forward Direct
this 87% that you are seeing over the next two to three quarters, we see that this will be 85 plus or minus maybe a couple of percentage points.

Provides management's expectation for occupancy levels, a critical metric for asset utilization and revenue generation in the flexible workspace sector.

Asked by Shamit

Strategy for geographic expansion, particularly in Tier 2 cities, and the criteria for market selection Direct
our strategy... has been follow the talent. So, if you look at, say, locations like Koramangala or any CBD location... most of these places, there is a dearth of larger buildings. So, our philosophy is to take up smaller buildings and also have a larger campus... wherever we see a good concentration of talent, it's not a question of whether, it's just a question of when we are going to go there.

Details the company's core strategy for market entry and expansion, emphasizing talent concentration and asset quality, which is crucial for sustainable growth.

Asked by Aayush Saboo

Impact of AI on the flexible workspace industry and IndiQube's competitive advantages Direct
Al-driven efficiencies and periodic workforce structuring, companies are becoming more cautious and seeking agility and flexibility in their real estate strategies... uncertainty is actually accelerating the adoption of flexible workspaces... our industry... is actually coming in as a handy thing.

Addresses a significant macro trend (AI) and explains how it benefits the flex workspace model, reinforcing the company's value proposition and long-term relevance.

Asked by Jahnvi Shah

Target for free cash flow positivity Direct
FY'27? Yes, I mean, it will be breakeven or slightly positive, Mohit, definitely in FY'27, that's what we are seeing.

Provides a key financial milestone for investors regarding the company's cash generation and financial self-sufficiency.

Asked by Mohit Agrawal

3 min read 7 chapters

Detailed narrative

Strong Financial Performance in Q2 FY26

IndiQube reported a robust Q2 FY26 with revenue reaching INR354 crores, marking a 38% year-on-year growth. EBITDA surged by 74% YoY to INR75 crores, leading to an improved PAT margin of 8% compared to 3% in the prior year. Operating cash flow more than doubled to INR151 crores, significantly exceeding EBITDA, highlighting operational efficiency and healthy profitability.

Expanding Portfolio and Robust Occupancy

The company's total signed portfolio stands at 9.14 million square feet across 125 centers and 16 cities, with 5.8 million square feet currently rent-yielding. Management expects the entire 9.14 million square feet to become rent-paying within 18 to 24 months, projecting a rent-paying area of 7.6-7.67 million square feet by March '26. Occupancy levels remained strong at 87% in Q2 FY26, up from 81% in Q1 FY26, with a low monthly churn of 0.01%, reflecting strong client retention.

Value-Added Services (VAS) as a Key Growth Driver

Value-added services (VAS) contributed 13% to total revenue in Q2 FY26, an increase from 11% in the previous year, reflecting strong client adoption and engagement. IndiQube plans to expand its B2B and B2C service spectrum to include facilities, F&B, IT, mobility, and solar services, targeting a VAS contribution of at least 15% in the next financial year. This strategy aims to integrate VAS further into the overall workspace experience and enhance revenue quality.

Strategic Geographic Expansion and Supply Sourcing

IndiQube continues its 'follow the talent' strategy, expanding in Tier 1 cities like Mumbai (from 85,000 to 140,000 sq ft) and Tier 2 cities, having added Indore and planning 3-4 more city additions in H2. The company's supply sourcing strategy for future growth includes build-to-suit properties (15-20% cheaper), acquiring and renovating older 'brownfield' assets (e.g., Bangalore MG Road at INR130-140/sq ft vs INR300/sq ft for new), and reactive client-driven acquisitions.

Innovation and Sustainability Initiatives

The company introduced AI routing for transport management and a cafeteria crowd meter module to enhance operational efficiency and employee experience. IndiQube is also expanding its solar energy capabilities, building on its existing 20-megawatt solar farm in Yadgir and 22 rooftop installations, with plans to scale the farm to 70 megawatts. These initiatives reinforce its ESG credentials and contribute to power bill savings, impacting margins positively.

Competitive Landscape and Moats

IndiQube highlights its competitive advantages, including its large operator status, pan-India presence, and strong referenceability network, with 40% of clients occupying multiple centers. The company notes that 65% of its total occupancy comes from clients with over 300 seats, reflecting a focus on large enterprise clients, comprising 40% GCCs and 60% Indian enterprises. Management believes the market will gravitate towards a few large players due to network effects and service quality.

Capital Expenditure and Free Cash Flow Outlook

Capex for H1 FY26 stood at INR179 crores, with an estimated full-year FY26 capex of INR350-360 crores, and a similar range expected for FY27. This capex includes advances for future projects and renovation. Management anticipates the company to be free cash flow positive or slightly positive in FY27, driven by improving operating cash flows and the gradual conversion of signed AUM into rent-yielding assets.

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