Smartworks FY26 results: revenue up 31%, turns profitable

What changed in FY26

Smartworks Coworking Spaces Limited reported its first annual profit in FY26, supported by higher occupancy across its office portfolio and rising demand from enterprise clients for managed workspaces. The company said revenue from operations rose 31% year-on-year to ₹1,796 crore for the year ended March 31, 2026, from ₹1,372 crore in FY25. It reported a net profit of ₹11 crore, reversing a loss of ₹63 crore in FY25, according to a regulatory filing dated April 30. Separately disclosed consolidated numbers showed net profit of ₹10.52 crore on total income of ₹1,849.90 crore for FY26. The turnaround comes at a time when flex and managed office operators are pitching predictable, multi-city capacity to large companies.

FY26 financial performance: profit, margins, and returns

Operating profitability improved during the year, with normalised EBITDA rising 75% to ₹314 crore. EBITDA margin expanded to 17.5% from 13.1% a year earlier, indicating better operating leverage as centres mature and occupancy rises. Return on capital employed (ROCE) increased to 16% from 7.3% in the previous year. The company’s disclosures also pointed to a balance sheet improvement, with net debt at -₹56 crore, implying net cash. Smartworks said gross debt was down by more than 50% since its IPO. It also reported cost of borrowing below 9%, down by about 180 basis points year-on-year.

Q4 FY26: strongest quarterly performance to date

In the January-March quarter (Q4 FY26), Smartworks reported its strongest quarterly performance so far. Revenue rose 45% year-on-year to ₹520 crore, while normalised EBITDA increased 71% to ₹99 crore. Quarterly net profit was reported at ₹17 crore, while another disclosure showed profit after tax of ₹16.62 crore on Q4 total income of ₹532.70 crore. A separate results snapshot also cited Q4 net profit of ₹15.02 crore compared with a loss of ₹7.08 crore in Q4 FY25, reflecting the same broader turnaround trend. Despite differences in reporting basis across disclosures, the direction was consistent: faster growth, higher margins, and a shift to profitability.

Footprint and occupancy: scale continues to expand

Smartworks said its operational footprint crossed 10 million square feet during FY26, making it the first listed flex workspace platform in India to reach that scale. The company’s total portfolio expanded to 16.1 million square feet across 66 centres in 15 cities, with disclosures noting the footprint includes locations such as Singapore in some measures. Mature centre occupancy was reported at 89% in one update. Another operational update for Q4 FY26 cited operational area of 10.1 million square feet and overall occupancy at 82%. The company also reported a seat retention rate of 88% in FY26, a key metric for managed workspace operators that rely on contract renewals.

Forward visibility: contracted rental revenue and locked-in FY27

Management highlighted a pipeline of contracted revenue that supports near-term visibility. Founder and Managing Director Neetish Sarda said the company entered FY27 with more than ₹5,200 crore of contracted rental revenue. Smartworks also said it has secured 100% of FY27 supply and already has 75% visibility for FY28. In addition, it stated that over 80% of its expected FY27 revenue is already locked in. For investors, these metrics matter because managed workspace cash flows depend on multi-year enterprise contracts and the speed at which new centres ramp up.

Market reaction and investor focus points

After the turnaround-led Q4 performance, the stock rose 2.23% to ₹450, according to a market update. The near-term focus for the market is likely to remain on occupancy, margin sustainability, and the pace of centre additions. Management’s disclosures on net cash position (net debt of -₹56 crore), lower borrowing costs, and reduced gross debt since IPO also add to the discussion around financial flexibility. But the key operating drivers remain revenue growth from enterprise demand and improved utilisation across mature centres.

Sector context: office leasing cycle remains supportive

Smartworks’ commentary referenced a supportive backdrop for India’s office market. It noted that India’s office market absorbed a record 83 million square feet in 2025, and that Q1 calendar 2026 recorded the highest first-quarter gross leasing on record. For flexible workspace operators, stronger leasing conditions typically translate into higher enquiries from enterprises that want satellite offices, swing space during expansions, or fully managed campuses without long build-out timelines.

Key numbers at a glance

Why the FY26 turnaround matters

For a flex and managed workspace operator, profitability is closely tied to occupancy, ramp-up timelines, and financing costs. Smartworks’ FY26 results show margin expansion alongside revenue growth, suggesting that a larger base of mature centres is supporting operating leverage. The improvement in ROCE to 16% from 7.3% also indicates better returns on deployed capital compared with the prior year. Meanwhile, contracted rental revenue of more than ₹5,200 crore and the claim that over 80% of expected FY27 revenue is already locked in provide a clearer view of near-term cash flows than many real estate-linked business models.

Conclusion

Smartworks closed FY26 with a return to profit, higher margins, and an expanded operational footprint beyond 10 million square feet. The company has positioned FY27 around contracted rental revenue visibility, secured supply, and a high share of pre-committed revenue. The next set of updates investors will track are execution on FY27 supply, occupancy trends across new and mature centres, and whether borrowing costs remain below 9% as the portfolio scales.