Buy Awfis Space Solutions Ltd for the Target Rs. 590 by Choice Institutional Equities
Key Conference Call Highlights
Macro Environment:
* India office leasing market remains strong with record leasing activity; GCCs and flexible workspace operators continue to drive demand growth
* GCC ecosystem in India crossed 2,100 centres, with AI-led expansion increasing demand for premium managed workspaces
* GCCs contributed 40%+ of leasing demand; flex operators penetration reached 21% and expected ~25% at end of FY27E
Operations:
* AWFIS highlighted five long-term growth engines: premiumisation, multiformat supply, GCC demand, organic client expansion and adjacencies such as design-build and furniture
* Nearly 60% of new supply was signed with institutional landlords, improving asset quality and pricing power. Developer partnerships with institutional landlords are expected to become an important supply channel in FY27–28E, improving capital efficiency and lowering risk
* GCC clients contributing 23% of rental revenue. Enterprise and GCC clients now account for 64% of client base, with the average tenure increasing to 37 months
* 48% of clients operate across multiple AWFIS centres, highlighting customer stickiness
* Mature centre occupancy remained healthy at ~84%, while blended occupancy stood at 76%; the management expects further improvement through GCC and enterprise demand
* Average new centre size ~20% larger than legacy portfolio
* The design & build business (“AWFIS Transform”) is scaling up rapidly, with third-party revenue increasing significantly and a strong FY27E order pipeline already secured
* D&B segment’s margin stood at 7–8% by the end Q4FY26
Guidance:
* The management expects FY27E overall revenue growth of 25–27%, supported by GCC mandates, premium centre ramp-up and managed office expansion
* FY27E: Coworking & allied business expected to grow 27–28% Design & Build expected to expand 20–23%
* FY27E gross seat additions to be 22,000–25,000 (~1.5 msf), with focus remaining on higher revenue per seat rather than aggressive capacity growth
* FY27E capex expected to remain at a level similar level to FY26
* Premiumisation has become a core strategy, with 100% of new supply added in Grade A/A+ assets and operationalising 35 premium Gold/Elite centres. The focus is shifting from seat growth to higher revenue per seat
For Detailed Report With Disclaimer Visit. https://choicebroking.in/disclaimer
SEBI Registration no.: INZ 000160131
