Synopsis: A small-cap company engaged in providing workspace solutions has received a Buy recommendation from Choice Institutional Equities. The company in context has a 3 year sales CAGR of 67 percent.
A small cap stock where the company is in the business of providing workspace solutions has been given a buy rating by Choice Institutional Equities. The broker has given a target price of Rs 590 to the stock, which creates an upside potential of 63 percent from the current market price of the stock in context.
With a market cap of Rs 1715 Cr, AWFIS Space Solutions Ltd is the targeted stock by the brokerage firm. The company offers a broad range of flexible workspace solutions, catering to individual desk requirements of startups as well as large corporates and multinational companies.
Analyst Rational
Awfis reported healthy Q3FY26 performance with revenue rising 20.2 percent YoY and 4.1 percent QoQ to Rs. 3,818 Mn, broadly in line with estimates. EBITDA grew 29.8 percent YoY, while margins expanded to 36.5 percent, driven by improved seat mix and pricing. Operational seats increased significantly, reflecting strong underlying demand.
The company delivered strong operational momentum with blended occupancy improving to 75 percent, supported by large seat cohorts contributing 36 percent of the portfolio. EBITDA margin reached an all-time high, and 7,000 seats were added during the quarter, indicating sustained expansion and improving utilisation across centres.
The brokerage highlighted that in the conference calls the management stated that BFSI, technology services, consulting firms, and GCCs remain key demand drivers, with enterprises increasingly preferring flexible office solutions over traditional leasing. Growth is broad-based across major cities, reducing geographic concentration risk while strengthening revenue visibility and long-term scalability.
Occupancy at mature centres exceeded 84 percent, while large corporates accounted for 64 percent of occupied seats and GCCs generated about 21 percent of space revenue. Multi-centre clients represented 46 percent of seats, reflecting strong customer stickiness, improved collections, higher operating leverage, and faster payback for new centres.
Total capacity reached about 177,000 seats across 257 centres, with FY26 seat addition guidance revised to roughly 32,000 seats. Although subcontracting and facility costs remain elevated due to ramp-ups, management expects margin normalisation as utilisation improves and operating leverage strengthens profitability.
The company expects the ROE to be at 15.6 percent at the end of this fiscal year, while seeing this grow to 16.4 percent and 15.6 percent in the next two following fiscal years. The EPS is also expected to grow from Rs 9.6 of FY25 to Rs 11.9 in FY26 and then to Rs 16.9 in FY28. With DuPont Analysis, the company expects the Net Profit Margin to grow from 5.6 percent of FY25 to 6.1 percent in FY28
Choice revised its target price to Rs. 590 from Rs. 760, factoring in higher projected capex and lower PAT estimates. The brokerage applied a reduced EV/Adjusted EBITDA multiple amid muted investor sentiment and weaker relative performance in the office space sector. Key risks include potential slowdown in demand from GCCs and startups, declining blended occupancy, and intensifying competition from peers, which could impact growth and margins if market conditions weaken.
Q3FY26 Result
In the latest quarterly result the company has seen its revenue from operations increase by 20 percent YoY, from Rs 318 Cr in Q3FY25 to Rs 382 Cr in Q3FY26, while the QoQ increased by 4 percent from Rs 367 Cr. The net profits grew by 46 percent going from Rs 15 Cr in Q3FY25 to Rs 22 Cr in Q3FY26, while the QoQ increased by 37 percent from Q2FY26’s Rs 16 Cr.
In 9M numbers of the fiscal year, the company saw its revenue from operations increase by 25 percent YoY, from Rs 867 Cr in 9MFY25 to Rs 1083 Cr in 9MFY26. The net profits for the same period fell by 16 percent going from Rs 56 Cr to Rs 47 Cr.
The company has a 3 year sales CAGR of 67 percent, while the TTM is at 29 percent. The company’s 3 year profit CAGR is at 41 percent, while the TTM number is at 77 percent. The company also has a ROCE of 13 percent and a ROE of 26 percent.
Awfis Space Solutions Ltd is a leading flexible workspace provider in India, offering co-working spaces, customised managed offices, and mobility solutions for individuals, start-ups, SMEs, and large corporates. Incorporated in December 2014 and founded by Amit Ramani, the company is headquartered in New Delhi and operates across multiple Indian cities.
The company delivers integrated workspace solutions that include design-and-build, facility management, IT support, infrastructure, and event services, enabling businesses to seamlessly book and use offices as needed. Awfis has evolved into a comprehensive workspace platform with hundreds of centres and serves thousands of clients across diverse sectors.
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