Smartworks Cowor Q2 FY27 Earnings Call — Analysis (NSE: SMARTWORKS)

Smartworks raised its FY27 revenue growth guidance to 33–35% on robust enterprise and GCC leasing demand, delivering 39% YoY Q2 revenue growth alongside expanding EBITDA margins of 19.8%.

5 Nov 2026 · Analysis by Alpha Inflection

Result quality: stable — Results context unavailable. Management sentiment: optimistic.

The take

Q2FY27 Revenue from Operations ₹591 Cr ( +39% YoY ) . New guidance — FY27 fy27 revenue growth guidance 33% to 35% . New story: Enterprise and GCC Structural Migration .

Results

Revenue reached ₹591 Cr (+39% YoY, +8% QoQ); normalised EBITDA stood at ₹117 Cr (+68% YoY) with an EBITDA margin of 19.8% (+340bps YoY).

Financial highlights

Guidance

Management raised FY27 revenue growth guidance to 33–35% (up from 28–30%) while maintaining normalised EBITDA margins at the upper end of the 19–20% range.

What management committed to

• [Smartworks] is increasing [its] FY '27 revenue growth guidance to 33% to 35% from [the] earlier given guidance of 28% to 30%. — 33% to 35%, FY27
• [Smartworks] is keeping [its] normalised EBITDA margin guidance at 19% to 20%, trending towards the upper end of that band. — 19% to 20%, FY27
• [Smartworks] continues to expect more than 12.5 million to 13 million square foot of operational space by March of 2027. — 12.5 million to 13 million square foot, Q4FY27
• [Smartworks] guided capex of INR 550 crores to INR 600 crores [for FY27]. — INR 550 crores to INR 600 crores, FY27
• In H2, [Smartworks] will open about 45,000 seats, most of it in [Pune Eastside and Mumbai East Bridge campuses]. — about 45,000 seats, H2FY27
• [Smartworks] will continue to add 2.5 million to 3 million square foot every year and will fund it from within the business. — 2.5 million to 3 million square foot, every year
• [Smartworks has] given a guidance that by '28, you will see these ROCEs getting up to about 28%. — about 28%, FY28
• About INR 95 crores to INR 100 crores will go towards maintenance capex this year [FY27]. — INR 95 crores to INR 100 crores, FY27

Key themes

Aggressive enterprise flex capacity expansion and guidance upgrade

How the narrative shifted

• Enterprise and GCC Structural Migration: Large enterprises and GCCs are structurally shifting from permanent buildouts to flex campuses due to cost advantage, pan-India management ease, and headcount flexibility.
• Aggressive Counter-Cyclical Capacity Build: Management is executing its heaviest capex cycle to pre-lock scarce prime commercial supply across Tier-1 cities ahead of demand.
• Operating Leverage Dampening Capex Dilution: A maturing base of ~10M sq ft operating at 91% committed occupancy generates 300-400bps excess margin, neutralizing the margin drag of large new campus fit-outs.
• Non-Rental Revenue Diversification: Value-added services, Smart Vantage, and Fit-out-as-a-Service (FaaS) are expanding revenue per desk and scaling alongside real estate footprint growth.
• Macro Agnostic Office Demand: Global uncertainty and AI adoption accelerate flex office adoption rather than reducing overall desk requirements.

Operational commentary

• Platform expanded to 17.5M sq ft across 71 centres, with 10.9M sq ft operational across 58 centres after adding ~1.0M sq ft in H1 FY27.
• Mega campuses Eastside (Pune) and East Bridge (Mumbai) will go live in H2 FY27 with ~35% pre-commitments, adding ~45,000 seats.
• Large enterprise clients now contribute 91% of rental revenues, with 35+ clients taking 1,000+ seats representing 41% of rental revenue (up from 35% YoY).
• GCCs account for 22% of rental revenue and drive 35–40% of incremental growth; multi-city clients generate 35% of rental revenue.
• Mature centres (9.7M sq ft) operate at 88% occupancy and 91% committed occupancy; blended platform occupancy stands at 81% with 86% committed occupancy.
• Non-rental other operating revenues (VAS, FaaS, Smart Vantage) surged 125% YoY to ₹170 Cr in H1 FY27 from ₹70 Cr in H1 FY26.
• Debtor days maintained at 7 days; maintenance capex estimated at ₹95–₹100 Cr for FY27.

Analyst Q&A

• Q. What is the pre-leasing status and ramp-up timeline for Eastside (Pune) and East Bridge (Mumbai) mega campuses?

  Both campuses have ~35% pre-fill commitments from BFSI, manufacturing, logistics, and IT clients; breakeven is expected within 10–12 months of operations.

• Q. Why has other operating revenue surged 125% and is it sustainable?

  Growth is driven by expansion of VAS, FaaS (fit-out-as-a-service), Smart Vantage, and recurring utility/parking/amenity billing on a larger 10.9M sq ft base; other operating revenue will continue matching or leading footprint growth.

• Q. Will the large H2 capacity addition dilute margins or drop blended occupancy sustainably?

  Blended occupancy may temporarily dip below 80% purely due to the 45,000-seat denominator addition, but mature centres generate 300–400bps higher margin which offsets drag and keeps full-year margins at the upper end of 19–20%.

• Q. Is Keppel (holding ~15% stake) planning to monetise any part of its holding?

  Keppel invested balance-sheet capital with a long-term horizon; while only they can speak to their plans, management understands there is no immediate monetisation plan.

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