"Compounding firmly seated
In H1FY25, Awfis Space Solutions (Awfis) delivered on two of its main FY25 guidance parameters, viz. 30%-plus revenue growth for FY25 and expansion in IGAAP EBITDA margin upwards of 12% (H1FY25 YoY revenue growth of 39% and IGAAP EBITDA margin of 13.3%). With an overall operational and committed pipeline of 150,649 seats (over 110,000 operational) as of Sep’24, we expect continued growth ahead. We estimate CAGR of 35% in seat addition, 31% in revenue and 53% in IGAAP EBITDA (EBITDA post lease payments) over FY24–27E. We retain BUY with a revised target price of INR1,049 (earlier INR 979), as we roll forward to 25x Mar’27E IGAAP EBITDA (earlier Dec’26E) of INR 2.8bn and add net cash of INR 2.4bn. Key risks: Slowdown in office leasing and pricing competition."
