IndiQube narrows H1 loss as lease effect reaches Rs 152 crore

IndiQube Spaces Limited reported a Rs 38 crore loss before tax in H1 FY27, but management attributes much of the statutory effect to Ind AS 116, whose Rs 539 crore lease-interest and right-of-use depreciation charges exceeded Rs 387 crore of lease-liability payments by Rs 152 crore.

Why did IndiQube report a loss before tax in H1 FY27?

IndiQube reported a Rs 38 crore loss before tax in H1 FY27, compared with a Rs 89 crore loss before tax in H1 FY26. Management says the accounting loss is largely due to Ind AS 116, the lease-accounting standard that records depreciation on right-of-use, or ROU, assets and interest on lease liabilities in the profit and loss account.

The presentation says IndiQube is profit-after-tax, or PAT, positive and has consistently paid income tax, but it does not disclose a numerical PAT figure or a reconciliation from the Rs 38 crore loss before tax to PAT. It lists Rs 13 crore under income or current tax expense for H1 FY27, after Rs 22 crore in FY26 and Rs 8 crore in FY25.

The cash-flow statement starts with the Rs 38 crore loss before tax and adds back Rs 383 crore of depreciation and amortisation, Rs 18 crore of finance costs and Rs 223 crore of interest expense on lease liabilities. These and other adjustments resulted in Rs 534 crore of operating cash flow before working-capital changes in H1 FY27, compared with Rs 402 crore in H1 FY26.

How did IndiQube calculate its Rs 152 crore lease-accounting effect?

IndiQube calculated a Rs 152 crore net impact on profit and loss by comparing Rs 539 crore of total Ind AS 116 impact with Rs 387 crore of lease-liability payments in H1 FY27. The company’s table includes Rs 239 crore of interest on lease liabilities and Rs 300 crore of ROU depreciation in the Rs 539 crore total.

The equivalent net impact was Rs 143 crore in H1 FY26, when Rs 433 crore of lease interest and ROU depreciation was compared with Rs 290 crore of lease-liability payments. Total Ind AS 116 impact increased by Rs 106 crore year on year, while the table’s net profit-and-loss impact increased by Rs 9 crore.

The presentation does not describe the Rs 152 crore figure as underlying profit or provide an Indian generally accepted accounting principles, or IGAAP, equivalent profit figure. It also shows Rs 223 crore of interest expense on lease liabilities in the H1 FY27 cash-flow adjustments, Rs 16 crore below the Rs 239 crore figure in the investor table, without explaining the difference.

What are IndiQube's ROU assets and lease liabilities?

IndiQube defines an ROU asset as the accounting value of its right to occupy and use a leased property over the lease period. Under Ind AS 116, this asset is recorded on the balance sheet and depreciated over the applicable lease period, with the resulting depreciation charged to profit and loss as a non-cash accounting expense.

A lease liability is the accounting value of future rent payable on leased properties, according to IndiQube. Management says it is presented on the balance sheet under Ind AS 116 even though it is not a traditional loan or borrowing; H1 FY27 cash flow records Rs 387 crore of lease-liability payments including interest, against Rs 290 crore a year earlier.

Management says IndiQube’s contractual commitment is typically limited to a lock-in period of around 3.5 years, whereas Ind AS 116 requires the entire lease period to be considered. It says this increases reported lease liability and interest expense, and management therefore says lease liabilities should not be included in debt-to-equity calculations.

Does IndiQube's cash flow support its explanation?

IndiQube generated Rs 513 crore of net cash from operating activities in H1 FY27, up Rs 84 crore from Rs 429 crore in H1 FY26. Cash generated from operations was Rs 509 crore before a Rs 4 crore net income-tax refund, while the prior-year half included Rs 12 crore of net income-tax paid.

Working-capital movements reduced operating cash flow by Rs 25 crore in H1 FY27. Trade receivables used Rs 13 crore, other financial assets used Rs 38 crore and other assets used Rs 43 crore, partly offset by Rs 34 crore from other financial liabilities and Rs 36 crore from other liabilities.

Cash generation from operations was followed by Rs 70 crore used in investing activities and Rs 363 crore used in financing activities. Investing cash use included Rs 203 crore spent on property, plant and equipment, capital work-in-progress, intangible assets under development and capital advances, while financing cash use included Rs 387 crore of lease-liability payments.

Cash and cash equivalents under the cash-flow statement ended at Rs 69 crore in H1 FY27, compared with Rs 24 crore in H1 FY26. The balance-sheet cash-and-cash-equivalents figure was Rs 110 crore, after including Rs 92 crore of restricted bank deposits with an original maturity of less than three months, while the cash-flow figure deducts Rs 41 crore of bank overdraft.

What does IndiQube's tax disclosure show?

IndiQube’s presentation lists Rs 13 crore of income or current tax expense for H1 FY27, following Rs 22 crore in FY26 and Rs 8 crore in FY25. Management uses these figures to support its statement that IndiQube is PAT positive and has consistently paid income tax, although FY26 is a full-year period and is not directly comparable with H1 FY27.

The H1 FY27 cash-flow statement instead shows a Rs 4 crore net income-tax refund, compared with Rs 12 crore of net income-tax paid in H1 FY26. The supplied pages do not reconcile the Rs 13 crore current-tax-expense figure with the Rs 4 crore cash-tax refund, so they should not be treated as the same measure.

IndiQube also directs readers to adjusted cash earnings before interest and tax, or Adjusted Cash EBIT, rather than cash EBIT. Management says Design & Build revenue is excluded from operating income under Ind AS but represents cash inflows and is added back in Adjusted Cash EBIT; no H1 FY27 Adjusted Cash EBIT amount appears on these pages.

Conclusion

IndiQube’s H1 FY27 disclosure shows a narrower Rs 38 crore loss before tax alongside Rs 513 crore of operating cash generation and a management-calculated Rs 152 crore net Ind AS 116 profit-and-loss effect. Compared with H1 FY26, the reported loss narrowed by Rs 51 crore, operating cash flow increased by Rs 84 crore and total stated lease-accounting impact increased by Rs 106 crore.

The next disclosure to watch is whether IndiQube provides a numerical bridge between loss before tax, its PAT-positive assertion, Rs 13 crore of current tax expense and any IGAAP-equivalent profit measure. Investors can also track whether the company explains the Rs 16 crore difference between the two H1 FY27 lease-interest figures and whether newly commissioned centres meet management’s stated five-to-six-month break-even period.