Awfis Space Solutions Ltd – Q4 FY25 & FY25 Full Year Concall Highlights Leadership & Organizational Progress: - Sumit Lakhani appointed CEO, overseeing strategy, P&L, operations, and growth initiatives; supported by strengthened leadership team across sales, design, and delivery. - Focus on fostering innovation and agility to capitalize on industry opportunities. Financial Performance FY25: - Revenues surged 42% YoY to ₹1,208 crore, surpassing initial guidance. - EBITDA increased 64% to ₹402 crore with margin expansion to 33.3%; operating leverage evident. - Segmental growth: Co-working & allied services up 48%, contributing 76%; Design & Build (D&B) up 36%. - Q4 FY25: Revenue ₹340 crore (+46%), EBITDA ₹116 crore (+73%), margin at 34.1%. - Profitability: Excluding one-offs, PBT of ₹97 crore; strong liquidity with ₹130 crore cash; debt minimal at ₹23 crore. - Long-term debt-free status maintained; treasury of ~₹875 crore; invested around ₹282 crore in GrafTech, with MTM losses as a treasury play. Operational Enhancements & Expansion: - Added ~39,000 seats in FY25, reaching ~134,000 seats across 208 centers; combined capacity over 164,000 seats. - Occupancy at 73%; centers >12 months old at 84%, indicating strong demand. - Entered nine Tier 2 cities and five new micro-markets; signed LOIs for 13 new centers (~11,000 seats). - Client base: 66% large corporates/MNCs, 20% SMEs; high multi-center engagement (40%). Business Model & Strategic Initiatives: - Asset-light, high-margin managed aggregation (67% portfolio), with integrated offerings like F&B, mobility, IT, and event management. - Expanding elite centers targeting GCCs and Fortune 200 companies; 3 operational, 8–9 planned in FY26. - Backward integration into modular furniture using demand from recent seat additions; margin benefits expected. - Digital innovations include VR-based designs for client engagement and immersive workspace solutions. FY26 Outlook & Strategic Focus: - Continue adding ~39,000 seats, with managed ramp-up in occupancy (84–85% in H1 FY26). - Revenue growth targeted around 30%, with margins sustained or slightly improved; capex around ₹200 crore aligned with FY25. - Phased approach: H1 focus on occupancy, H2 to accelerate supply. - Expect norm for tax-outgo due to accumulated losses. Industry & Market Trends: - Rapid growth in Indian flex space market (projected to reach ₹600bn by 2027) and GCC market (~$100bn by 2030). - Tier 2 cities to contribute ~30% of market growth by 2028–29; AWFIS targeting strategic expansion. - Rising customer preference for experience, design, and sustainability. - Competitive edge: Extensive network in 18 cities, multi-tiered offerings, and integrated platform. Challenges & Risks: - No material headwinds; strong demand and robust pipeline noted. - Risks include higher-than-expected capex, early-stage results from furniture & mobility units, and center rationalization charges. - Portfolio optimization ongoing; no material operational headwinds foreseen. Summary: Awfis delivered a strong FY25 with robust revenue, margin expansion, and significant capacity additions. The company is leveraging its asset-light model, expanding into allied services, and investing in backward integration to boost margins and client retention. With a clear growth strategy and industry tailwinds, management remains confident of sustained expansion, improved occupancies, and margin enhancement in FY26 and beyond, maintaining an optimistic outlook.