IndiQube FY26: Growth with profitability, cash flow, and balance sheet repair

IndiQube Spaces closed FY26 with a set of numbers that read like a company moving from scale-up to scaled platform. On an IGAAP-equivalent basis, revenue rose to ₹1,469 crore, up 37 percent year on year. EBITDA grew faster at 60 percent to ₹301 crore, pushing the EBITDA margin to 21 percent from 18 percent in FY25. EBIT doubled to ₹183 crore and profit after tax increased 145 percent to ₹125 crore, lifting PAT margin to 9 percent from 5 percent.

Management framed FY26 as a year of execution in an uncertain environment. The CEO highlighted resilience and consistency, pointing to total income of ₹1,491 crore, PAT of ₹125 crore, operating cash flows of ₹304 crore, and a steady EBITDA margin profile. The cofounder emphasized the operating engine behind the numbers: expansion to 17 cities, 130 properties, 9.66 million square feet, and the addition of 28,000 seats while holding steady state occupancy at 88 percent.

The Q4 FY26 print supported that narrative. Quarterly revenue reached a record ₹407 crore, up 36 percent over Q4 FY25. EBITDA was ₹80 crore, EBIT ₹47 crore, and PAT ₹30 crore. The company also called out large enterprise wins that should start reflecting in subsequent quarters, including a 1,140-seat agreement in Pune valued at ₹54 crore over five years and a ₹75 crore deal for 48,000 square feet with a healthcare technology GCC.

A year where margins expanded and cash followed

The FY26 story is not only about higher revenue. It is also about operating leverage and cleaner cash generation. EBITDA expanded to ₹301 crore and the EBITDA margin improved to 21 percent. EBIT margin improved to 12 percent, and PAT margin to 9 percent. The mix also remained largely recurring: FY26 recurring revenue was ₹1,385 crore out of total revenue of ₹1,469 crore, with one-time revenue at ₹85 crore.

Cash flow from operations improved sharply to ₹304 crore in FY26 from ₹123 crore in FY25. That matters because the flexible workspace and managed office model is capital and working-capital intensive in its build-out phase. IndiQube also reported a higher current tax expense of ₹21.7 crore in FY26 versus ₹7.7 crore in FY25, consistent with stronger underlying profitability on its preferred performance lens.

Balance sheet indicators moved in the right direction as well. Net worth increased from ₹374 crore in FY25 to ₹1,160 crore in FY26. Gross debt reduced to ₹290 crore from ₹344 crore, while bank balances other than cash increased to ₹313 crore and cash and cash equivalents increased to ₹72 crore. As a result, net debt shifted from ₹338 crore to net cash of ₹95 crore, and the debt-to-equity ratio improved to 0.08 from 0.90. Return on equity also improved to 16 percent from 14 percent.

Q4 FY26: record revenue, but watch the margin mix

Q4 FY26 delivered the highest quarterly revenue at ₹407 crore, up 36 percent year on year from ₹300 crore in Q4 FY25. Profit growth was positive but not as steep as FY26’s full-year pattern. EBITDA rose to ₹80 crore from ₹69 crore, while PAT moved to ₹30 crore from ₹26 crore. EBITDA margin for the quarter was 20 percent and PAT margin 7 percent.

This is not necessarily a warning sign, but it is a reminder of how quarterly profitability can move with center ramp-ups, the timing of new sign-ups, and the revenue mix between recurring and one-time items. Q4 FY26 recurring revenue was ₹372 crore, while one-time revenue was ₹35 crore. At the full-year level, recurring revenue remained the dominant base at ₹1,385 crore with one-time revenue at ₹85 crore.

The company’s deal commentary suggests the pipeline is focused on larger, longer-stay enterprise demand. Q4 highlights included large commitments from GCC clients and multi-year agreements in Pune and Bengaluru. IndiQube also noted that the revenue impact of these sign-ups will be reflected in subsequent quarters.

Scale and utilization: the operating engine behind the P and L

IndiQube’s operating scale widened meaningfully by March 2026. Area under management reached 9.66 million square feet, up 15 percent from 8.4 million square feet in March 2025. The network expanded to 130 centers from 115 and to 17 cities from 15. Seats increased to 215,000 from 186,000, also up 15 percent.

Occupancy is the key swing factor in this business model, and the presentation draws a clean line between early-stage centers and mature ones. Steady state occupancy was 88 percent versus 87 percent a year ago. The portfolio also shows occupancy headroom. Of the 9.66 million square feet AUM, occupied area was 6.33 million square feet and operational area was 1.51 million square feet, with 1.82 million square feet under LOI signed. IndiQube framed this as 3.3 million square feet of occupancy headroom, which represents a tangible runway if demand remains supportive.

The asset-liability structure is designed to lower risk during expansion. Centers reach operational breakeven at 55 to 60 percent occupancy, and the steady state range is 85 to 90 percent. Client lock-in averages 34 months. Fit-out cost is stated at ₹1,650 per square foot, with capex payback in 36 months. Landlords are locked in with IndiQube for 10 to 20 years, with an average of 38 months shown on the portfolio timeline, while IndiQube’s lock-in is limited to around 3.5 years after which it can vacate with notice. This asymmetry is a central feature of the model and helps explain how the company can expand supply while retaining flexibility.

Supply acquisition also appears diversified. The portfolio mix is 56 percent full buildings, 26 percent renovated properties, and 18 percent tech parks. On location and sustainability attributes, 78 percent of centers are within 3 km of operational or planned metro stations. Green certification coverage was highlighted at 3.3 million square feet, comprising 2.76 million square feet across 32 centers certified and 0.55 million square feet across 5 centers under certification, totaling 23 percent of AUM.

Enterprise mix, VAS expansion, and the technology layer

IndiQube’s client base reached 848 as of March 31, 2026, with 42 percent GCCs. Direct sourcing contributed 62 percent of business, with 38 percent via IPCs. The company reported monthly average net churn of negative 0.11 percent, improved from negative 0.23 percent in FY25. Multi-center clients contributed 44 percent of revenue, up from 35.89 percent in FY25, which typically indicates deeper penetration into larger accounts.

The sector mix remained anchored in technology services and adjacent knowledge industries. IT and ITeS accounted for 49 percent, BFSI and consulting 20 percent, manufacturing and automotive 11 percent, logistics and healthcare 7 percent, e-commerce and edtech 4 percent, and others 9 percent.

Seat concentration also signals enterprise skew. Occupancy split showed 63 percent in 300-plus seat customers, 26 percent in 101 to 300 seats, 7 percent in 51 to 100 seats, and 4 percent in 0 to 50 seats. The portfolio average client lease duration was 43 months, with 48 months shown for 300-plus seat customers.

A second growth lever is value-added services. FY26 VAS total was ₹218 crore versus ₹135 crore in FY25. The company also stated VAS contribution at 15 percent of operations revenue in FY26 versus 12 percent in FY25. This matters for two reasons. First, VAS can improve unit economics if attached to existing occupancy. Second, it makes relationships stickier because clients consume an integrated workplace bundle rather than only space.

The technology layer, MiQube, is positioned as an operating system for digital workplaces. The app crossed 119,000 downloads, supported 1.4 million plus transactions, and showed an increase in transaction volume to 1.4 million in FY26 from 1.0 million in FY25, up 36 percent. This is not presented as a revenue line item in the deck, but it is framed as part of the integrated solution stack, supporting employee experience and facility operations.

Ind AS versus IGAAP-equivalent: why the company keeps two lenses

A major portion of the presentation is dedicated to explaining the gap between Ind AS results and the company’s IGAAP-equivalent view. Under Ind AS 116, leases require recognition of right-of-use asset depreciation and interest on lease liabilities. IndiQube argues these are accounting-driven and not reflective of its underlying operating performance.

In FY26, the Ind AS impact of lease accounting was shown as interest on lease liabilities of ₹411 crore and depreciation on right-of-use assets of ₹506 crore, totaling ₹917 crore. Against this, payment of lease liabilities was ₹647 crore, and the net impact on profit and loss was shown as ₹270 crore. In FY25, the total Ind AS 116 impact was ₹694 crore and net impact on P and L ₹192 crore.

This framing also connects to management’s view of leverage. The investor Q and A explicitly states that lease liabilities should not be included in net debt computation because they are operational rather than financial. It also notes that while accounting may assume a 10 to 15 year lease term, IndiQube’s contractual commitment is typically limited to the lock-in period of around 3.5 years.

The company also encourages investors to focus on adjusted cash EBIT rather than cash EBIT. Adjusted cash EBIT for FY26 was ₹253 crore versus ₹131 crore in FY25, up 93 percent. Adjusted cash EBIT margin improved to 17 percent from 12 percent, based on revenue from operations. The adjustment includes income on finance lease, which the company treats as core to operations but which is classified under other income under Ind AS.

What to take away from FY26

FY26 positioned IndiQube as a scaled platform with improving profitability, stronger operating cash flows, and a materially healthier balance sheet. Revenue grew 37 percent, but PAT grew 145 percent and operating cash flows more than doubled. Net debt moved to net cash, and the debt-to-equity ratio dropped sharply.

Operationally, the company ended the year with 9.66 million square feet under management across 130 centers and 17 cities, while holding steady state occupancy at 88 percent. The model’s risk controls, including breakeven occupancy of 55 to 60 percent and client lock-ins averaging 34 months, help explain how expansion can coexist with margin stability. The increasing share of VAS in revenue and the higher contribution from multi-center enterprise clients suggest the platform is getting deeper, not just wider.

For investors, the central question going forward is whether IndiQube can keep converting its 3.3 million square feet of occupancy headroom into rent-yielding area without sacrificing return ratios. FY26 indicates that the company is trying to do exactly that: grow supply, fill it with large, longer-stay customers, attach services, and translate scale into cash. If execution remains consistent, the financial profile begins to look less like a workspace operator and more like a repeatable, integrated workplace annuity with operational leverage.