Smartworks Revenue Rises 44% in Q1 FY27 as Contracted Revenue Crosses ₹5,400 Crore

What Happened ?

key details

Business Performance:

Smartworks maintained strong growth momentum during Q1 FY27, driven by sustained demand from large enterprises and continued expansion across key business locations.

Key Highlights:

• Fifth consecutive quarter of sequential revenue growth since listing.
• Continues to be among India’s fastest-growing listed flexible workspace companies.
• Revenue growth supported by higher enterprise occupancy and new campus additions.
• Expansion pipeline for FY27 and FY28 is fully booked. 

Operational Expansion:

The company continued expanding its managed office portfolio while strengthening its long-term supply pipeline.

Key Highlights

• Operational footprint increased to 10.4 million sq. ft.
• Operates 54 centres across 15 cities, including Singapore.
• Total secured portfolio reached 16.9 million sq. ft. across 70 centres.
• Added 0.3 million sq. ft. during the quarter.
• Another 2.2–2.7 million sq. ft. is scheduled to become operational over the next nine months. 

Client & Occupancy:

Enterprise customers continued to drive occupancy and rental revenue growth across Smartworks’ portfolio.

Key Highlights:

• Enterprise clients contributed ~92% of rental revenue.
• Mature centres operated at ~89% occupancy.
• Committed occupancy stood at ~92% for mature centres.
• Overall occupancy reached 81%, with committed occupancy of 86%.
• Revenue from Global Capability Centres (GCCs) increased to ~21% of rental revenue. 

Growth Pipeline:

Smartworks strengthened its future revenue visibility through long-term leasing and advance capacity planning.

Key Highlights:

• ₹5,400 crore of contracted rental revenue already secured.
• Contracts cover 87.2% of FY27 revenue guidance.
• Expansion planning has already commenced for FY29.
• Eastside, Pune (~8.63 lakh sq. ft.) is expected to become the world’s largest managed office campus in H2 FY27.
• Singapore capacity has doubled to approximately 1,500 seats following the Workstudio acquisition. 

Outlook:

Management reiterated its FY27 growth guidance, supported by a strong expansion pipeline and continued enterprise demand.

FY27 Guidance

• Revenue Growth: 28–30%
• Normalised EBITDA Margin: 19–20%
• Operational Footprint Target: 12.5–13 million sq. ft. by March 2027.

The company expects favourable industry trends to continue, supported by rising demand for managed workspaces and increasing adoption by global enterprises establishing operations in India. 

Risk Analysis

Summary:

• Smartworks delivered a strong Q1 FY27 with robust revenue growth, margin expansion and healthy cash generation. While contracted revenue and advance leasing provide strong visibility, future performance will depend on timely execution of its expansion pipeline, occupancy levels and sustained enterprise demand.

Key Risks:

• Execution Risk: Delivery of new campuses, including the Eastside Pune project, is critical to achieving FY27 and FY28 growth targets.
• Occupancy Risk: Revenue growth depends on maintaining high occupancy across newly operational centres.
• Expansion Risk: Large-scale capacity additions require timely fit-outs, client onboarding and efficient capital deployment.
• Enterprise Demand Risk: Any slowdown in corporate office leasing or GCC expansion could affect future absorption and revenue growth.
• Capital Investment Risk: Continued investments in new campuses may temporarily impact cash flows if occupancy ramps up slower than expected.

Worst Case:

• Delays in operationalising new campuses or weaker-than-expected enterprise leasing could reduce occupancy levels, slow revenue growth and affect margin expansion despite the company’s strong contracted revenue pipeline.

Risk Level: Medium

Company Commentary

Founder & Managing Director Neetish Sarda said the company has completed its first year as a listed entity with strong financial and operational momentum. He highlighted that large enterprises continue to shift towards managed workspaces, while Smartworks’ ability to secure premium office campuses well in advance and customise workspaces for clients remains a key competitive advantage.

Management also noted that AI is being integrated into internal tools and operational processes to improve execution and decision-making. With ₹5,400 crore of contracted rental revenue and expansion capacity secured through FY28, the company reiterated confidence in achieving its FY27 guidance and delivering long-term value. 

Management Priorities:

• Deliver 28–30% revenue growth in FY27.
• Maintain 19–20% normalised EBITDA margin.
• Expand operational footprint to 12.5–13 million sq. ft. by March 2027.
• Execute the FY27 and FY28 expansion pipeline.
• Increase enterprise, GCC and multi-city client penetration.
• Enhance operational efficiency through AI-enabled processes.