Indiqube Spaces Limited — Q3 FY26 earnings call

So it was H1 was around about, I would say, about INR180 crores. The H2, Adhidev would be something in the similar range. So my H1 OCF and the capex it would be almost similar of H2 so both yes. But the actual numbers we would be disclosing as I mentioned by the end of the year.

Analysts sought clarity on cash flow and capex, which management deferred to year-end, providing only half-yearly estimates.

Asked by Adhidev Chattopadhyay

So there are two, three reasons to it. So one is the occupancy. If you see, our occupancy has improved from 81% to 84%. So that itself gives you that from the existing building. And the renovated building which we talked about last time so there the occupancy has also improved and come to the realization 90% because they are they come into the steady-state level, which is more than 12 months. And basis this, this also comprises of one-time revenue. So we have one-time revenue, for example, coming from the either the design-and-build or any other sale of assets.

Management explained that higher revenue growth (45%) compared to seat growth (27%) was due to improved occupancy in existing and renovated buildings, plus a boost from one-time VAS revenue.

Asked by Mohit Agrawal

So here I would say, like the income from value-added service currently contributes almost about 13% of total revenue, which is already up from 12% last year. And as mentioned earlier, the VAS remains an integral part of our business model. However, the value-added stream scale, we see the contribution increasing to 15% in next financial year. And a net margin of these services would be around about 15%.

Management clarified the nature of VAS revenue, acknowledging its volatility due to one-time projects, but provided guidance for its increasing contribution and margin in the next fiscal year.

Asked by Mohit Agrawal

So if you look at, as suggested earlier, that our capex has been to the tune of INR180 crores in H1, and we see a similar kind of a addition this year. So bulk of the capex will go towards the interior addition. And that is where you see from the IPO proceeds that we raised, we have allocated more than INR400 crores towards the capex, and we are on track and using those funds. So predominantly most of the funds will go into interiors, whether it is for our managed office plug-and-play or whether it is for design and build, it will be a combination of that where most capital allocation will happen.

Management detailed that capex is primarily directed towards interiors for managed offices and design-and-build projects, funded by IPO proceeds, to support the company's 30% growth target.

Asked by Vikrant Kashyap

Yes, so basically our typical client lock-in is about 3 years. That is what we have with them. And what it means is that if the client is vacating within the lock-in period, they have to pay for the balance lock-in period. By and large, if you see our collections have been very, very high. Like we have been collecting more than, I will say, 97%-98% of the expected or projected revenue.

Management confirmed a 3-year lock-in period and stated that clients vacating early are liable for the remaining period, contributing to high collection rates and mitigating risk.

Asked by Siva

So basically -- yes, so I can give you some idea on the unit metric. Like for example, if you look at today in Karnataka, a unit of power costs about INR7.5. And when we are generating this power because it's a captive, so I'm not able to quantify the saving, saving per se, but broadly you can take 50% power savings if you were to look at the interest payout, depreciation, and all of that. 50% power savings we are able to achieve, yes. We will be happy to carve out the capex breakup also what goes under solar, yes, in times to come.

Management quantified the potential power savings from solar plants (50% of ₹7.5/unit in Karnataka) but deferred a detailed capex breakdown for solar vs. core business to future disclosures.

Asked by Adhidev Chattopadhyay

So see what happens, the biggest stickiness for clients is that once they become comfortable with the building and their employees are comfortable coming over there, they don't want to change the address. So there is a fair amount of stickiness. Now having said that, if suppose the client had taken 200 seats and the client is now going to 400 seats, if we don't have space, then we have to displace them. But our philosophy has been always that if I have 10 buildings in a micro-market, then idea is to add one or two buildings every year in that micro-market. We have not basically specifically the data immediately is not available, but as Meghna highlighted that if you look at like our steady-state center which are more than 12 months old, we have 90% plus occupancy over there.

Management emphasized client stickiness due to comfort and micro-market presence, noting that older centers (over 12 months) consistently maintain over 90% occupancy.

Asked by Dhairya Trivedi

So 40% of our clients are coming from brokers. To be precise, 39% and 61% of the clients are sourced directly by us. And within this 39%, I will say about 70% will be IPCs and then there will be a lot of individual or smaller brokerage firms. And our total brokerage payout is about 2% to 2.1% of our revenue.

Management provided a detailed breakdown of client sourcing, indicating a balanced approach with 61% direct sourcing and 39% through brokers (70% of which are IPCs), with a low brokerage payout of 2-2.1% of revenue.

Asked by Siva