Smartworks signs Rs 540 crore in Q2 contracted rental revenue

Smartworks signed about Rs 540 crore of contracted rental revenue through client agreements in Q2 FY27, comprising about Rs 235 crore from existing clients expanding across cities and Rs 305 crore from new clients. Total contracted rental revenue reached about Rs 5,800 crore, up from about Rs 5,400 crore in June.

How did Smartworks build Q2 contracted rental revenue?

Smartworks built about Rs 540 crore of Q2 FY27 contracted rental revenue through both expansions by existing clients and additions of new clients. Existing clients expanding across cities accounted for about Rs 235 crore, while new clients across technology, consulting, healthcare, lifestyle and customer-experience sectors accounted for about Rs 305 crore.

The agreements entered into during Q2 sit alongside total contracted rental revenue of about Rs 5,800 crore, compared with about Rs 5,400 crore in June. The presentation reports both measures: the Rs 540 crore represents agreements with clients during the quarter, while Rs 5,800 crore is the stated contracted rental revenue position.

Smartworks also reported revenue from operations of Rs 591.4 crore in Q2 FY27, up 39% from Rs 424.8 crore in Q2 FY26 and 8% from Rs 546.2 crore in Q1 FY27. Management described Q2 FY27 as its sixth consecutive quarter of sequential revenue growth since listing on 17 July 2025.

Are existing clients expanding with Smartworks?

Existing clients are expanding with Smartworks, contributing about Rs 235 crore of Q2 FY27 contracted rental revenue across cities. The company reported that clients with more than 1,000 seats generated about 41% of rental revenue, up from about 35% a year earlier, and that revenue from this cohort increased 49% year on year.

Smartworks reported a 49-month tenure for its 1,000-plus-seat clients, compared with an average 45-month tenure across the client base. More than 35 clients had over 1,000 seats, while more than 75 clients operated with Smartworks in more than one city; the client count was 785 in H1 FY27.

Examples disclosed for the first half include a global customer-experience company with more than 8,500 seats in four cities after beginning its relationship in 2022, and a Swiss bank global capability centre (GCC) with more than 3,400 seats in Pune that expanded in H1. An Indian engineering-services leader with more than 2,900 seats added a Pune floor, while a Big Four firm was Smartworks’ largest client by revenue across two cities.

How diversified is Smartworks’ client and sector mix?

Smartworks reported a diversified client portfolio, with its largest client accounting for less than 5% of rental revenue and the top 10 clients accounting for about 24%. Enterprise clients remained the main base at 91% of rental revenue in Q2 FY27, compared with 90% a year earlier.

Information technology and IT-enabled services, or IT/ITeS, represented about 36% of rental revenue, down from about 40% a year earlier. Smartworks said IT revenue still grew, but that about 77% of revenue added over the preceding year came from outside IT and ITeS, reflecting faster growth in other sectors.

GCCs accounted for about 22% of rental revenue after a quarter-on-quarter increase of 110 basis points, or 1.10 percentage points. Smartworks said GCC revenue rose 50% over the previous year, while new H1 wins included a global pharmaceutical company, a Japanese non-banking financial company and a research and consulting major in Mumbai, plus a German industrial group engineering centre in Pune.

The mix data show two changes occurring together: the 1,000-plus-seat cohort’s rental-revenue share increased by about six percentage points to 41%, while IT/ITeS’ share declined by about four percentage points to 36%. Smartworks therefore reported higher revenue from large enterprise relationships without identifying one client or the technology sector as the sole source of growth.

What capacity supports Smartworks’ contracted revenue plans?

Smartworks’ client growth plans are supported by 10.9 million square feet of operational space across 58 centres and a total secured footprint of 17.5 million square feet across 71 centres, including letters of intent. The operational footprint was 20% higher year on year, while total secured supply was 38% higher.

The company had about 4.3 million square feet under fit-out or awaiting handover, against its stated H2 requirement to bring 1.6 million to 2.1 million square feet live. This pipeline includes Eastside in Kharadi, Pune, at about 863,000 square feet and Eastbridge in Vikhroli, Mumbai, at about 815,000 square feet.

Occupancy differed by centre maturity in Q2 FY27. Mature centres, defined as those open for more than 12 months, were 88% occupied and 91% committed across 9.7 million square feet, whereas new centres were 48% committed across 1.3 million square feet; overall occupancy was about 81% and overall committed occupancy about 86%.

Management said client lock-ins covered landlord rent commitments by about two times and disclosed no asset-liability mismatch through FY30. It also said centres reach break-even in about 12 months and reach 85% to 90% occupancy in under 18 months as fit-out is paid back and contracts re-price.

Conclusion

Smartworks’ Q2 FY27 agreements combined about Rs 235 crore from existing clients expanding across cities with about Rs 305 crore from new clients. Rising contribution from 1,000-plus-seat clients, a less-than-5% largest-client share and IT/ITeS falling to about 36% of rental revenue indicate that the reported growth included both deeper enterprise relationships and broader sector participation.

The next disclosed milestones are management’s FY27 revenue-growth guidance of 33% to 35%, its reaffirmed normalised earnings before interest, tax, depreciation and amortisation margin target of 19% to 20%, and H2 openings of 1.6 million to 2.1 million square feet. Smartworks also targets about 12.5 million to 13.5 million square feet of operational space by March 2027, making leasing progress at Eastside, Eastbridge and other new centres relevant to future contracted revenue.