Flexible workspace operators closed FY26 on a strong note, supported by rising demand from global capability centres (GCCs), growing preference for premium office spaces, and increasing adoption of managed office solutions. Companies such as WeWork India, Smartworks, IndiQube, and Awfis reported healthy revenue growth, improving occupancies, and better margins, underlining the continued momentum in India’s flex office market despite broader stock market weakness.

These firms achieved double-digit revenue growth alongside margin improvements, projecting over 20% growth in the current fiscal year. Margin enhancements are primarily due to the maturation of centers and scaling efficiencies rather than pricing, as fixed costs are diluted over a larger occupancy base. Further margin expansion is anticipated as more centers reach maturity, enhancing operational leverage.

Despite a stellar quarterly performance, the stocks of these companies have not yielded returns this year, largely due to broader market weakness. Nevertheless, revenue visibility and margin enhancements bode well for the sector.

WeWork India has achieved a remarkable occupancy rate of 86.9%, driven by robust demand across its portfolio, especially from enterprise clients—who account for around 77% of its revenue. A significant portion of new demand stems from existing clients expanding their presence within its network, securing ₹1,885 crore in core revenue for FY27 thus far. BOB Capital Markets anticipates that WeWork may grow at a more measured pace due to a higher base, but strong occupancy figures should support revenue growth and stable margins. The brokerage retains a ‘buy’ rating with a target price of ₹765.

Smartworks has forecasted revenue growth of 28-30% for FY27, having secured nearly 83% of its projected revenue—₹5,200 crore—from enterprise clients, who represent 90% of its rental income. BOB Capital Markets has maintained a ‘buy’ designation with a target price of ₹547, boosted by expansion in leasable area and improved occupancy and operating margins.

IndiQube reported a stable occupancy level of 88% in FY26, up from 87% in FY25, with value-added services constituting 15% of revenue, a rise from 12% last year. However, BOB Capital Markets has downgraded the stock to ‘hold’ and reduced the target price by 28% to ₹167, citing macroeconomic challenges and a lack of immediate growth catalysts.

Awfis improved its EBITDA margin to 36.8% in FY26, up from 33.3% the previous year, driven by increased operational leverage and premium offerings. However, due to elevated capex on premium services and slower revenue growth, BOB Capital has reduced earnings estimates by 10% for FY27-28. The brokerage maintains a ‘hold’ rating with a target price of ₹364.