Key Financial Performance (Q2 FY27)

Financial Metrics (I-GAAP-equivalent basis):

  • Revenue: INR 768.7 crores, up 31.6% year-over-year and 10.1% quarter-over-quarter
  • EBITDA: INR 162.9 crores, up 37.6% year-over-year
  • EBITDA Margin: 21.2%, up 138 basis points from Q1 FY27
  • PAT: INR 65.8 crores, up 67.4% year-over-year
  • PAT Margin: 8.6%, up 183 basis points year-over-year
  • Revenue-to-Rent Multiple: 2.7x (all-time high)
  • ROCE: 34.5%, up 590 basis points quarter-over-quarter and 1,235 basis points year-over-year

Operational Metrics:

  • Desks Added in Q2: 11,700 (largest quarterly addition)
  • Total Desks: 145,300 across 85 centers in 8 cities, up 27% year-over-year
  • Members: 121,700, up 32.5% year-over-year
  • Occupancy: 83.7%, up 357 basis points year-over-year
  • Mature Centre Occupancy: Nearly 88%
  • Enterprise Contribution: 77% of core revenue
  • Fortune 500 Companies: 30% of revenue
  • GCCs: 41% of overall mix
  • Top 10 Members: 23% of overall revenue
  • Average Commitment Term: 28 months

First Half FY27 Performance

Financial Metrics (I-GAAP-equivalent basis):

  • Revenue: INR 1,466.7 crores, up 30% year-over-year
  • EBITDA: INR 301.2 crores, up 50.6% year-over-year
  • PAT: INR 119 crores, up 149.5% year-over-year
  • H1 ROCE: 31.1% (doubled year-over-year)

Operational Metrics:

  • Desks Added in H1: 18,400
  • Additional Desks in October: 4,500 (crossed 150,000 mark)

Platform Business Performance

Value-Added Services (VAS):

  • Q2 Revenue: INR 79.6 crores, up 35% year-over-year

Digital Services:

  • Q2 Revenue: INR 29.2 crores, up 46% year-over-year

Combined Platform Revenue:

  • Q2 Total: INR 108.8 crores, up 38% year-over-year
  • Digital EBITDA Margin: Close to 80%
  • VAS Margin: Margin accretive

Cash Flow and Balance Sheet

Cash Flow Metrics (Q2 FY27):

  • Free Cash Flow from Operations (FCFO): INR 237.7 crores, up 149% year-over-year and 68% quarter-over-quarter
  • FCFO to EBITDA Multiple: 1.5x
  • Capex: INR 175.8 crores
  • Free Cash Flow to Firm: INR 61.9 crores

H1 FY27 Cash Flow:

  • FCFO: INR 379.8 crores, up 157% year-over-year (already nearly two-thirds of FY26 full year FCFO of INR 586 crores)
  • Capex: INR 363.8 crores (largest ever deployed)
  • Surplus after funding growth: INR 16 crores

Balance Sheet Position (as of September 2026):

  • Net Cash: INR 23.1 crores (compared to net debt of INR 310.5 crores a year ago)
  • Credit Rating: Upgraded from A- to A+ over the year
  • Average Cost of Borrowing: 8.5%, down 184 basis points year-over-year

Market Context and Industry Trends

Indian Office Market Q3 Data:

  • Office Space Absorption: 21 million square feet, up 6% year-over-year
  • Flex Segment: 24% of all leasing (5 million square feet), up 21%
  • Domestic Companies: 47% of all leasing
  • Hyderabad: 25% of Q3 leasing
  • Green-Certified Completions: 80%
  • Leasing in Buildings Under 10 Years: About 75%

Flex Market Size:

  • Total Office Space: 1 billion+ square feet
  • Flex Space: 123 million square feet
  • Organized Flex: 83 million square feet
  • Organized Branded Workspace: 29 million square feet
  • WeWork Market Share: 26% of space, 34% of revenue in branded segment

Expansion and Growth Plans

Current Pipeline:

  • Desks Under Leases Signed and Fit-out: More than 9,000
  • Desks Under LOIs: 38,000
  • Total Incremental Desks: 47,000 (32% beyond current capacity)

Capacity Guidance:

  • March 2027 Target: 150,000-155,000 desks
  • Future Target: 190,000-200,000 desks
  • FY28 and FY29 Supply: Already under negotiation

Geographic Distribution:

  • Bangalore: 54,000 desks (anchor market)
  • Hyderabad: 20,000 desks (overtook Mumbai as second-largest market)
  • Pune: 17,000 desks

Recent Openings:

  • Chennai: 3,600 desks (fully demand-backed managed office deal)
  • Hyderabad: 2,700 desks (all branded WeWork spaces)
  • Pune: 2,600 desks (all managed offices)

Contracted Revenue Visibility

Locked-in Core Revenue:

  • Amount: INR 3,843 crores, up nearly 66% year-over-year
  • Rent Locked-in: INR 1,421 crores
  • Coverage Ratio: 2.7x
  • Contracted Value Added: Nearly INR 3 of value for every INR 1 of rent

Renewals and Customer Retention

Renewal Metrics:

  • Renewal Percentage: 80-85% in first half
  • Contracted Escalations: 6-7% on existing contracts
  • Revenue-to-Rent Multiple on New Deals: Closer to 3x (vs 2.7x historical)
  • Lower-than-expected churn in business

Customization Revenue:

  • Q2 Customization: INR 18 crores
  • H1 Customization: INR 30 crores
  • Flow-through to EBITDA: Positive
  • Amortization: Large customizations are being amortized

Capital Allocation Strategy

Capex Guidance:

  • FY27 Capex: Approximately INR 500 crores
  • H2 FY27 Capex: Lower than H1 but includes large deal execution
  • FY28 Capex: Expected around INR 600 crores or slightly more

Capital Priorities:

  • Funding expansion (FY28 growth expected to be higher than FY27)
  • Corporate action to utilize book losses for dividends or buybacks
  • Investment in adjacent businesses complementing core strengths
  • Building businesses around helping companies grow in India

Management Commentary Highlights

Market Position: WeWork is the brand India's companies look for first when choosing where to work, with 96% brand awareness among non-members vs 51% median for other operators.

Demand Drivers: Companies are planning around teams rather than buildings, with 5+ year leases collapsing from 40% to 8% of enterprises. New hires can join in 45-60 days while teams can be live in WeWork spaces on day one.

Platform Strategy: Nearly 30% of members using physical spaces work across more than one format, and 27% buy services beyond the desk. The platform is becoming the infrastructure companies run their workplace on.

Operating Leverage: Despite the heaviest investment cycle in company history, margins held at 19.8% in Q1 and grew to 21.2% in Q2, demonstrating improved operating leverage.

Promoter Pledge: The promoter pledge continues but is expected to reduce as market cap recovers. The company has three years to pay off the debt and is on a deleveraging path.

Reported Ind AS Figures

Q2 FY27 Ind AS PAT: INR 20.5 crores (compared to loss of INR 4.2 crores in Q1 FY27)

Difference from I-GAAP: Due to lease accounting under Ind AS 116 and brokerage treatment

Analyst Q&A Key Points

Underwriting Economics: Return profiles continue to expand with improved payback periods and occupancy ramp-up timelines. The company is taking larger positions in Grade A assets and signing buildings still under development.

GCC Demand: Continued strong demand from GCCs setting up in India, with companies moving jobs from US to India and insourcing from IT services firms. Premiumization trend continues with higher capex requirements for better spaces.

Margin Outlook: Structural margin expansion expected, with center-level margins near 30%. Range of 20-23% EBITDA margin expected for next year depending on capacity timing and opex factors.

Lumpy Expiries: Commonwealth Bank of Australia may move out in the next year (1.2 million sq ft campus), but backfill plans are underway. No other major concentration issues.