Indiqube Spaces Ltd Q1 FY27 Earnings Call Summary

Revenue

Margin

Demand

Guidance

Tone

Event Participants

Executives

5 Rishi Das (Chairman, Executive Director & CEO), Meghna Agarwal (Co-Founder & COO), Pawan Jain (CFO), Vikas Agarwal (Head of IR), Vamsi Chatrathi (AVP, Marketing)

Analysts

8 Dhairya Trivedi (DTJ Investments), Hitaindra Pradhan (Maximal Capital), Jainam Sanghvi (Dhanma Capital), Jay Kant Beria (IIFL Capital), Saurabh Gilda (JM Financial), Shamit Ashar (Ambit Capital), Vikrant Kashyap (Asian Market Securities), Yashesh Gilganchi (BOB Capital Markets), Yog Rajani (Omega Portfolio Advisors)

Financials & KPIs

Metric	Reported	Commentary
Revenue	₹428 crores	Highest ever quarterly revenue, +37% YoY growth
EBITDA	₹87 crores	+34% YoY; EBITDA margin healthy at 20%
EBIT	₹55 crores	EBIT margin improved to 13% from 11% YoY
PAT	₹35 crores	+91% YoY; PAT margin expanded to 8% from 6% YoY
Area Under Management (AUM)	10.61 million sq ft	Added 1.91 million sq ft during the year
Rent Paying Area (RPA)	7.8 million sq ft	Rent yielding area at 6.74 million sq ft
New Centers Launched	17 centers	Guided annual addition of ~2 million sq ft
Client Count	855 clients	90% of occupants from clients with >100 seats
GCC Revenue Contribution	53% (52%)	Global Capability Centers are largest client segment
Multi-Center Client Revenue Share	41%	Clients taking more than one center; renewal rate ~90%
VAS Revenue Contribution	~17%	Up from 12% to 15% over prior periods; expected +2-4% structurally
Solar Capacity Operational	30 MW	Solar farms in Karnataka & Maharashtra plus rooftop installations
Institutional Supply Share	~20%	Up from ~12% a couple of years back
Bangalore Portfolio Share	~60%	City concentration; Chennai ~10%, NCR growing
Top 5 Clients Revenue Share	12%	Client base well diversified
Rent-to-Revenue Ratio	2.2 (corporate level)	City-wise breakup not calculated/disclosed

Geographic & Segment Commentary

Bangalore: Dominant market at ~~60% of portfolio (6.5+ million sq ft). Focus on outer Ring Road stretch (Silk Board to Marathahalli) - the best performing IT corridor. Minimal exposure to North Bangalore (~~0.5 million sq ft) due to oversupply. Bangalore absorption share ~28-30% of country's total (12.7 million sq ft of 45 million total in H1).
Hyderabad: GCC activity robust; management expects to sign up larger spaces in this financial year. City to contribute increasing share going forward.
Mumbai: Post-Covid expansion underway; management hopeful of signing larger spaces in FY27. Strategy varies by micro-market - dense markets like Nariman Point favor smaller/renovated buildings.
NCR/Noida: New large center signed on Noida Expressway (among largest in portfolio, owned by ultra-HNI family group), expected operational by Q2/Q3 FY28. Confidence driven by improving registration, law & order, Jewar airport.
Chennai: ~10% of portfolio; continues to be a key market alongside Bangalore.
Tier-2 Cities: Unit economics similar to tier-1 with cheaper real estate (₹50-70 per sq ft) and aggressive seat pricing (₹6,500-7,500 per seat); occupancy and profitability largely comparable.

Company-Specific & Strategic Commentary

Growth Strategy - "Follow the Talent": Build high-density workspace clusters in talent-rich micro markets. Philosophy of "land, expand, build scale" - entering markets with smaller presence before scaling up, as exemplified by Noida progression.
VAS Expansion (DesignQube, Indicare, ECO): Rebranded offerings positioning IndiQube as an integrated managed spaces platform. DesignQube (formerly Bespoke) for workplace design; Indicare (formerly IndiQ1) extending into retail store/branch management; ECO for sustainable commercial spaces. VAS contribution at ~17% of revenue, expected to increase by 2-4% structurally.
Rebranding & Platform Evolution: Transition from managed workspace provider to "total outsourcing solution for commercial spaces" - MDQ platform. Growth to come from both expanding managed workspace footprint AND increasing service range per customer.
Sustainability Initiatives: 30 MW solar operational; targeting 100% green power for portfolio. Plans to add 25-30 MW more with ₹100-120 crores capex; solar IRR up to 22% with excellent payback.
Institutional Supply Increasing: Share of institutional supply (listed REITs/large funds) grown from ~12% to ~20%; institutional typically higher-grade product with higher pricing and CAM costs, but margins consistent across institutional vs HNI supply.
Supply Pipeline: 3.9 million sq ft signed headroom (~97,000 seats) across various stages; 12-15 month timelines from LOI to operational.

Guidance & Outlook

Metric	Guidance / Outlook	Commentary
Annual Area Addition	~2 million sq ft per year	Committed to growth trajectory; additions in RPA vary quarter-to-quarter with Q2-Q4 FY27 expected to show increases
Occupancy (Corporate)	80-85%	Maintained annually; Q1 at 86%
Occupancy (Mature Centers >12 months)	85-90%	Steady state for stabilized centers
EBITDA Margin	19-21%	Range-bound annually regardless of occupancy fluctuation
EBIT Margin	11-13%	Range guidance for the year
PAT Margin	8-10%	Range guidance for the year
VAS Revenue Contribution	+2-4% increase from ~17%	VAS margin ~15%; focus on growth and scale over margin expansion for next 1-2 years
New Center Ramp-up	Breakeven in 5-6 months (~50-57% occupancy); ~90% occupancy in 9-12 months	Not 36 months for full capex recovery; stable margins despite growth
Solar Capacity	+25-30 MW additional	₹100-120 crores capex requirement; IRR up to 22%

Risks & Constraints

Risk	Context
City Concentration (Bangalore)	~60% of portfolio in Bangalore; management notes Bangalore remains largest and fastest-growing market with 28-30% of national absorption. Mitigation: expanding in Hyderabad, Mumbai, NCR while maintaining Bangalore presence.
Supply Timing Uncertainty	Quarterly RPA additions vary due to building ramp-up timing; Q1 FY27 flat RPA despite AUM growth. Mitigation: 3.9 million sq ft signed headroom provides visibility.
Tenant Concentration	Top 5 clients only 12% of revenue; 41% revenue from multi-center clients; renewal rate 90%. Client notice periods 60-90 days provide some lead time to backfill. No back-to-back landlord arrangements.
Margin Pressure from New Centers	New centers take 5-6 months to operating breakeven at ~50-57% occupancy. Management confident of maintaining margin ranges despite growth, given historical operating leverage.
Client Attrition	Not explicitly quantified; management notes negative attrition historically (net seat growth from existing clients positive). 41% revenue from multi-center clients adds stability.
GCC Dependency	GCCs contribute 53% of revenue; shift from startups/unicorns post-2020-21. Management expects GCC share to grow to 54-55% but not drastically, deliberately maintaining diversified client mix.

Q&A Highlights

Area Addition & RPA Timing

Question: Why no change in operational area addition in Q1 FY27 despite annual guidance of 2 million sq ft? (Shamit Ashar, Ambit Capital)
Answer: Expansion is on an annual basis rather than quarter-to-quarter; H2 FY26 added ~~1.14 million sq ft. Timing of new center additions varies due to building ramp-up. Headroom of 3.9 million sq ft (~~97,000 seats) already signed. Occupancy maintained at 80-85% corporate, 85-90% mature centers. (Meghna Agarwal)

VAS Revenue Recognition

Question: What led to ₹39 crores one-time VAS revenue and what is steady-state expectation? (Shamit Ashar, Ambit Capital)
Answer: One-time revenues from DesignQube, Indicare, and ECO services. Considered recurring in nature as growth repeats. VAS contribution structurally increasing from 17% by 2-4%; quarterly percentage may fluctuate but structural trend is upward. (Meghna Agarwal)

Solar Investment Returns

Question: How much capex earmarked for solar and what IRR? (Shamit Ashar, Ambit Capital)
Answer: 30 MW operational capacity; adding 25-30 MW requiring ₹100-120 crores capex. Solar IRR up to 22% with excellent payback. Continuing to double down on green transition for own portfolio and client solutions. (Rishi Das)

Revenue Mix by Client Type

Question: What proportion of rents from IT tenants and GCC percentage? (Yashesh Gilganchi, BOB Capital Markets)
Answer: 52% revenue from GCCs, 23% from startups/unicorns, 28% from Indian enterprises. Indian IT services companies part of the 28% at ~10-12%; large percentage remains GCCs. (Rishi Das)

Interest Expense Increase

Question: Why did interest expense rise? (Yashesh Gilganchi, BOB Capital Markets)
Answer: Debt increased for solar plant funding, not for normal business operations. (Vikas Agarwal)

Margin Stability with Growth

Question: Will newer centers breaking even take time and impact overall profitability? (Yog Rajani, Omega Portfolio Advisors)
Answer: Centers reach operating breakeven in 5-6 months at ~50-57% occupancy; ~90% occupancy within 9-12 months. Margin ranges: EBITDA 19-21%, EBIT 11-13%, PAT 8-10% annually — no margin pressure from growth. (Meghna Agarwal)

Noida Large Center

Question: Timeline for large Noida center and confidence behind it? (Saurabh Gilda, JM Financial)
Answer: Operational by middle of next year (Q2/Q3 FY28). Existing presence in NCR with two Noida centers and Gurgaon centers. Confidence from improving Noida fundamentals (registration, law and order, Jewar airport). Not demand-backed but proactive — "land, expand, build scale" philosophy. (Rishi Das)

Institutional vs HNI Supply

Question: Breakdown and pricing differences between institutional and non-institutional supply? (Jainam Sanghvi, Dhanma Capital)
Answer: ~20% institutional (listed REITs/large funds) vs 80% ultra-HNI landlords; institutional share growing from 12% two years ago. Institutional product higher grade with higher pricing and CAM costs but attracts GCCs willing to pay premium; margins consistent across both. (Rishi Das)

Cash Flow & Capex Disclosure

Question: What OCF generated and capex guidance? (Jay Kant Beria, IIFL Capital)
Answer: Capex is combination of design-build-project, interiors, solar, vendor cycles - recurring in nature, not directly proportional to area addition. H1 audited numbers will provide full detail; refrained from provisional numbers to avoid subsequent changes. (Meghna Agarwal)

Supply Delivery Timelines & Micro Markets

Question: Timeline for 1.14 million sq ft added in H2 FY26 and which micro markets? (Vikrant Kashyap, Asian Market Securities)
Answer: Supply delivered in 12-18 months; incremental deliveries happening. Leasing uptake higher February-March to October; deliveries timed to Jan-Feb for marketing runway. Supplies concentrated in key performing micro markets like Outer Ring Road with 85%+ occupancy; avoiding over-supplied North Bangalore. (Rishi Das)

Margin Expansion Drivers

Question: Will VAS margin (vs core workspace) drive overall margin expansion via occupancy pickup? (Vikrant Kashyap, Asian Market Securities)
Answer: VAS contribution to increase 2-4% over next coming years; focus on growth and scale for DesignQube, Indicare, ECO rather than margin expansion. VAS revenue margin around 15% for next 1-2 years; growth prioritized over margin. (Meghna Agarwal)

Tier-2 Performance & Bangalore Concentration

Question: How are tier-2 centers performing vs metros, and plans for diversification? (Dhairya Trivedi, DTJ Investments)
Answer: Tier-2 occupancy, profitability, and unit economics similar to tier-1; real estate cheaper (₹50-70 per sq ft) with seat pricing ₹6,500-7,500. Bangalore concentration at ~60% but Chennai at ~10%, NCR growing; additional supply planned in Hyderabad and Mumbai. Bangalore share of national absorption ~28-30% so dominance justified. (Rishi Das)

Client Renewals & Pricing

Question: What is renewal rate, pricing step-up, and notice periods? (Hitaindra Pradhan, Maximal Capital)
Answer: Attrition negative historically - existing customers growing net seats. 41% revenue from multi-center clients. Renewal rate ~90%. Top 5 clients only 12% of revenue. Most properties multi-tenant except single-digit exceptions. Client notice periods 60-90 days (smaller/larger clients respectively); no back-to-back arrangements with landlords. (Rishi Das)

Key Takeaway

IndiQube Spaces delivered its highest-ever quarterly revenue of ₹428 crores (+37% YoY) in Q1 FY27, with PAT surging 91% to ₹35 crores and EBIT margin improving to 13% from 11%, demonstrating operating leverage. The company added 1.91 million sq ft to AUM (now 10.61 million sq ft) and launched 17 centers, maintaining its ~2 million sq ft annual addition guidance. Strategic focus centers on the integrated managed spaces platform - DesignQube, Indicare, and ECO - with VAS contribution at ~17% of revenue and expected to rise by 2-4%, while the ambitious Noida Expressway center and planned Hyderabad/Mumbai expansions target GCC-driven growth. Management guided margins to remain range-bound (EBITDA 19-21%, EBIT 11-13%, PAT 8-10%) with new centers reaching breakeven in 5-6 months. Key watch points include quarterly RPA addition timing (flat in Q1 despite guidance), Bangalore concentration at ~60% of portfolio, and the transition toward institutional supply (now ~20%), though the 3.9 million sq ft signed pipeline provides significant visibility.