EFC India Limited Q4 FY26 Earnings Conference Call

Financial Performance Summary

Full Year FY26 Performance (Consolidated)

Revenue from Operations: ₹10,367 million (vs. ₹6,567 million in FY25), representing 58% YoY growth
EBITDA: ₹4,683 million (vs. ₹3,277 million in FY25), representing 43% YoY growth
Profit After Tax (PAT): ₹2,347 million (vs. ₹1,408 million in FY25), representing 67% YoY growth
PAT Margin: Improved to 22.6% from 21.4% in FY25
Return on Capital Employed: 33% (vs. 30% in FY25)
Basic and Diluted EPS: ₹16.87 (vs. ₹10.35 in FY25)

Q4 FY26 Performance (Consolidated)

Revenue from Operations: ₹2,929 million (vs. ₹2,110 million in Q4 FY25), representing 39% YoY growth
EBITDA: ₹1,436 million (vs. ₹1,093 million in Q4 FY25), representing 32% YoY growth
Profit After Tax: ₹689 million (vs. ₹480 million in Q4 FY25), representing 45% YoY growth
PAT Margin: Improved to 23.5% from 22.7% in Q4 FY25

Segmental Performance FY26

Leasing Business

Revenue: ₹5,356 million (vs. ₹3,722 million in FY25), 44% YoY growth
Profit Before Tax and Interest: ₹2,127 million
Key Metrics: Presence across 25 cities, 750+ clients, average enterprise client tenure of 51 months
Portfolio Quality: Enterprise-centric revenue majority share, top 10 client contribution reduced to 24%
Unit Economics: Payback period 18-20 months with healthy revenue-to-rent dynamics

Design & Build Business

Revenue: ₹4,378 million (vs. ₹2,636 million in FY25), 66% YoY growth
Profit Before Tax and Interest: ₹1,197 million
Operational Metrics: 80+ designers and engineers, 45+ reputed clients, presence across 15+ locations
Design Footprint: Approximately 5.5 million square feet
Order Book: Described as "very healthy and really strong"

Furniture Business

Revenue: ₹632 million (vs. ₹209 million in FY25), 202% YoY growth
Profit Before Tax and Interest: ₹156 million
Manufacturing Capacity: 1.2 lakh square feet facility in Pune with capacity of ₹200-275 crore
Production Metrics: 1,500+ SKUs, delivered 60,000+ units
Target Sectors: Real estate, co-living, hospitality, IT, ITES, education, and allied services

Balance Sheet Position (as of March 31, 2026)

Total Assets: ₹26,751 million (vs. ₹16,992 million as of March 31, 2025)
Total Equity: ₹8,137 million (vs. ₹5,811 million as of March 31, 2025)
Non-current Assets: Increased driven by property, plant and equipment, right-of-use assets, and other financial assets
Liabilities: Lease liabilities and borrowings increased in line with business expansion

Cash Flow and Other Financial Metrics

Profit Before Tax: ₹3,098 million for FY26
Working Capital: Requirements increased particularly in trade receivables, inventories, and other financial assets
Finance Costs: ₹562 million for FY26
Depreciation and Amortization: ₹1,202 million for FY26

Business Strategy and Operational Highlights

Integrated Platform Approach

EFC operates three vertically integrated businesses:

1. Leasing: Provides stable, recurring revenue foundation with enterprise client stickiness

2. Design & Build: Offers growth momentum and execution capabilities

3. Furniture: Delivers backward integration, margin resilience, and supply chain control

Market Positioning

Serves structural demand from GCCs (Global Capability Centers), technology companies, financial services, and consumer businesses
Enterprises moving from CAPEX-led to OPEX-led workspace models
National presence across West, North, South, and East India

Growth Drivers

Managed office demand remains structurally strong
Enterprises seeking faster market entry, better employee experience, and lower setup risk
Cross-selling opportunities across verticals increase client lifetime value

FY27 Guidance and Outlook

Leasing Business

Target to add 18,000-20,000 revenue-generating seats annually
Geographic focus: West, NCR, Southern Belt (Hyderabad, Bengaluru, Chennai) with 30% contribution each
Expected growth from Eastern Belt with changing political dynamics
Average rent per square foot: Currently ₹7,250-7,500, expected to increase further

Design & Build Business

Target 40% growth rate for FY27
Strong pipeline from institutional businesses across office infrastructure, factory premises, healthcare centers

Furniture Business

Target over 50% growth for FY27
Benefiting from government policies promoting 'Make in India' and import substitution
BIS registration requirements creating competitive advantages

Margin Expectations

Target consolidated EBITDA margin of 30%+
Furniture business expected to generate 25% EBITDA margins

Management Commentary on Key Topics

AI Impact Assessment

Management believes AI will be net positive for workspace demand:

AI will generate new employment categories rather than reduce headcount
Structured businesses will require more structured workspace solutions
Historical parallels drawn with computerization and automation creating more jobs
Implementation and continuous improvement of AI requires human expertise

GCC Revenue Contribution

Approximately 70% of leasing revenue comes from large enterprise customers including GCCs
Long-term contracts provide revenue visibility and stability

Fundraising Strategy

Recently completed rights issue to support working capital requirements
Chose rights issue to reward existing loyal shareholders
Working capital intensive for Design & Build and Furniture businesses
Optimal debt-equity ratio to be maintained with debt around 7.5-7.75% interest rates

Capital Expenditure

No major CAPEX plans for FY27
Leasing business asset-light with only 10% seats requiring own capital
Design & Build is contractual with no CAPEX requirement
Furniture manufacturing facility already established with incremental improvements planned
No immediate land acquisition plans

Debt Profile

Primarily asset-backed debts with interest rates of 7.5-7.75%
Long-term debts with no immediate repayment pressure
No major debt expiries in FY27-FY28

Risk Factors Mentioned

Working capital requirements increasing with business scale
Design & Build and Furniture businesses are project-based and contract-based
Any underperformance in these verticals could impact overall margins

Participants in Conference Call

Management Team:

Mr. Umesh Sahay – Chairman and Managing Director
Mr. Nikhil Bhuta – Whole-Time Director
Mr. Uday Vora – Chief Financial Officer
Mr. Aman Gupta – Company Secretary

Moderator:

Mr. Nikunj Seth – MUFG Intime India Private Limited

Analysts/Investors:

Bharat with Compact Capital
Mohan Kumar with Athena Investments
Hassan with Kothari Family Office
Fenil Brahmbhatt with Choice Institutional Equities