Awfis Space Solutions: Q2 & H1 FY26 Performance Highlights and Strategic Outlook

Awfis Space Solutions Limited, a prominent player in India's flexible workspace sector, has reported a robust financial performance for the second quarter and first half of fiscal year 2026 (Q2 & H1 FY26). The company's consolidated operating revenue for H1 FY26 stood at INR 702 crores, marking a significant 28% year-on-year growth. This strong top-line expansion was complemented by an impressive 44% year-on-year increase in Operating EBITDA, reaching INR 259 crores, with margins at 36.9%. Profit After Tax (PAT), excluding exceptional items, also surged by 49% year-on-year to INR 26 crores. For Q2 FY26 alone, revenue from operations grew 26% year-on-year to INR 367 crores, with Operating EBITDA increasing 32% to INR 132 crores, and PAT at INR 16 crores. These figures underscore Awfis' ability to drive both growth and profitability in a dynamic market.

The company's performance was largely driven by its core co-working space on rent and allied services segment, which contributed INR 574 crores to H1 FY26 revenue, representing approximately 82% of the total. This segment saw a 36% year-on-year growth in Q2 FY26. The construction and fit-out projects segment also showed healthy traction, contributing INR 128 crores to H1 FY26 revenue, making up 18% of the total. This segment grew by 19% quarter-on-quarter in Q2 FY26. The sustained demand from clients, coupled with high occupancy levels, has been instrumental in this growth momentum.

Strategic Evolution and Market Leadership

Awfis has solidified its position as India's largest flexible workspace solutions provider, boasting a portfolio of 247 centers and approximately 170,000 seats across 18 cities, serving a diverse base of around 3,400 clients. This scale is a testament to the company's execution capabilities and operational expertise. A key strategic initiative is the ongoing shift towards premiumization. Awfis is increasingly focusing on Grade A buildings and premium locations to cater to the evolving requirements of Global Capability Centers (GCCs), large enterprises, and other premium clients. This is evident in their new supply acquisition, with 70% coming from Grade A+ developments and 100% from Grade A assets. The company now operates 21 Gold and 5 Elite centers, strategically located in key business districts.

Another significant development is the planned subsidiarization of Awfis Transform, the company's high-potential design and build business. This move is designed to enhance focus, strategic clarity, and scalability for this vertical. As a wholly owned subsidiary, Awfis Transform will gain greater flexibility to operate independently, pursue new markets, and present standalone financials, enabling clearer performance visibility. The business aims to expand into new segments such as retail, hospitality, and institutional projects, thereby broadening its customer base and accelerating sustainable, diversified growth for the Group.

Operational Efficiency and Future Outlook

Awfis continues to demonstrate strong operational efficiency, reflected in its high occupancy rates. The blended occupancy stood at 74%, while centers operational for over 12 months achieved a robust 84% occupancy. The company's asset-light Managed Aggregation (MA) model remains a cornerstone of its strategy, with 61% of total seats and 60% of centers operating under this model. This approach helps in sustaining growth while optimizing capital deployment. The company's liquidity position is strong, with gross debt at INR 21 crores and a healthy debt-equity ratio of 0.04, an improvement from 0.07 in Q2 FY25.

Management's outlook remains positive. For the current financial year, margins are expected to remain stable between 14% to 15%, with a positive upside anticipated in the next financial year as blended occupancy further increases. The company is confident in meeting its full-year guidance for construction and fit-out projects. Capex for FY26 is projected to be around INR 220 crores, a slight revision from the initial guidance of INR 180-200 crores, primarily due to increased focus on straight lease properties in H1. Awfis is well-positioned to capitalize on India's growing flexible workspace market, driven by increasing demand from GCCs, large enterprises, and a broader acceptance of agile work models.

Sustained Growth and Disciplined Execution

Awfis Space Solutions Limited's Q2 and H1 FY26 performance highlights a period of sustained growth and disciplined execution. The strategic shift towards premiumization, coupled with the expansion into Tier 2 cities and the planned subsidiarization of Awfis Transform, positions the company for continued leadership in India's evolving flexible workspace landscape. With a strong financial foundation, diversified client base, and a clear strategic roadmap, Awfis is focused on delivering long-term value to its stakeholders by leveraging its integrated ecosystem and operational expertise.