Smartworks lifts FY27 growth outlook after 39% Q2 rise

Smartworks Coworking Spaces Limited, referred to as Smartworks, raised financial year 2027 (FY27) revenue-growth guidance to 33-35% from 28-30% after revenue from operations in the second quarter (Q2 FY27) increased 39% year-on-year to Rs 591 crore. Normalised EBITDA rose 68% to Rs 117 crore and its margin reached 19.8%.

Why did Smartworks raise its FY27 revenue growth guidance?

Smartworks raised its FY27 revenue-growth guidance because management said first-half performance, sustained enterprise demand and a growing pipeline of large deals had put it ahead of its earlier plan. The revised 33-35% range is 5 percentage points above the previously stated 28-30% range in the October 30, 2026 release.

Smartworks retained guidance for a normalised EBITDA margin of 19-20%, saying the margin was trending towards the upper end of that range. It also retained a target to add 2.5-3 million square feet annually, while total footprint, including signed and upcoming properties, stood at about 17.5 million square feet across 71 centres as of September 30, 2026.

Management attributed the higher outlook to existing clients expanding across cities, new global businesses and Indian conglomerates taking space, and demand from Global Capability Centres (GCCs). GCC clients accounted for about 22% of rental revenue in Q2 FY27, according to Smartworks.

The 33-35% target is forward-looking rather than a reported result. Smartworks said such statements are subject to risks including macroeconomic conditions, competition, regulatory changes, technological developments and execution challenges that could cause actual results to differ.

How did Smartworks perform in Q2 FY27?

Smartworks reported Q2 FY27 revenue from operations of Rs 591 crore, up 39% year-on-year and 8% quarter-on-quarter. It described this as its sixth consecutive quarter of sequential revenue growth since listing, alongside sequential margin growth.

Normalised EBITDA, or earnings before interest, tax, depreciation and amortisation, rose 68% year-on-year to Rs 117 crore. The margin increased to 19.8% from 16.4% in Q2 FY26, a rise of 3.4 percentage points, or 340 basis points; management separately cited about 360 basis points of expansion over six consecutive quarters.

Normalised profit after tax more than doubled to about Rs 43.4 crore, while normalised operating cash flow rose 74% to Rs 107 crore. Annualised normalised return on capital employed (ROCE) reached 21.6%, compared with 13.6% a year earlier.

For the first half of FY27, Smartworks reported revenue from operations of Rs 1,138 crore, up 41% year-on-year. It also reported normalised EBITDA of Rs 224 crore, a margin of about 19.7%, and normalised operating cash flow of Rs 202 crore.

What enterprise demand indicators did Smartworks report?

Smartworks said enterprise clients contributed about 91% of rental revenue in Q2 FY27. Clients occupying more than 1,000 seats accounted for about 41% of rental revenue, up from 35% a year earlier.

Multi-city clients contributed about 35% of rental revenue, compared with 31% in Q2 FY26. Management said existing customers were expanding across cities and that large corporates sought flexibility to grow teams, enter markets and become operational without building offices themselves.

Contracted rental revenue stood at about Rs 5,800 crore at the end of Q2 FY27. Smartworks said expansions by existing clients and new enterprise wins drove the contracted amount, but did not specify the period over which the revenue would be recognised.

Smartworks served more than 780 clients as of September 30, 2026, including Fortune 500 and Forbes Global 2000 companies, multinational corporations, Indian conglomerates and high-growth businesses. Its SmartVantage offering is aimed at GCCs and combines managed campuses with partners providing legal, compliance, talent and operational support.

What capacity is Smartworks adding in FY27?

Smartworks had about 17.5 million square feet of total footprint across 71 centres in 15 cities in India and Singapore as of September 30, 2026. The total includes signed and upcoming properties, whereas its operational footprint was about 10.9 million square feet.

Mature centres maintained occupancy of about 88%, while committed occupancy stood at about 91% in Q2 FY27. Smartworks reported both measures alongside its annual target to add 2.5-3 million square feet, without defining the distinction between mature-centre and committed occupancy.

Eastside in Pune and Eastbridge in Mumbai are scheduled to become operational in the second half of FY27. Eastside covers about 863,000 square feet and Eastbridge about 815,000 square feet, adding about 1.68 million square feet of scheduled campus capacity.

Smartworks expanded its Singapore operations to four centres with about 1,600 seats by Q2 FY27. It said its model uses partnerships with real-estate developers to convert large commercial properties into managed campuses with facilities including cafeterias, gyms, recreation zones, convenience stores and creches.

Conclusion

The revised outlook combines faster first-half growth with a rental base concentrated in enterprise clients and a contracted rental revenue balance of about Rs 5,800 crore. Smartworks also reported a 74% year-on-year increase in Q2 FY27 normalised operating cash flow to Rs 107 crore, while clients with more than 1,000 seats increased their rental-revenue contribution by 6 percentage points.

The next disclosed milestones are the planned H2 FY27 openings of Eastside in Pune and Eastbridge in Mumbai, covering about 1.68 million square feet together. Smartworks’ progress against its maintained 19-20% normalised EBITDA margin guidance and annual addition target of 2.5-3 million square feet will also indicate delivery against its revised FY27 plan.