Awfis Space - Consistent Compounder ‘Flex-ing’ Its Wings; ICICI Securities Initiates With An Add Rating

ICICI Securities Report

Awfis Space Solutions Ltd. has a unique business model. While the company does not act as a land aggregator or landlord of office space, it focuses on providing services to its clients on demand side and also partners with space owners/landlords on supply side. With Awfis being the first co-working/flexible workspace company in India, there is also limited scope for comparison with industry peers.

Hence, we believe Awfis is more comparable to listed hotel peers. We believe given Awfis’ superior return on capital employed profile which is likely to consistently range over 20% FY26E onwards and net cash balance sheet combined with an estimated 48% Ebitda CAGR over FY24-27E, an enterprise value/Ebitda of multiple of 25 times is justified in line with hotel peers.

We initiate coverage on Awfis with Add rating; based on 25 times June-26E IND-AS 116 Ebitda of Rs 2.0 billion and adding net cash of Rs 1.7 billion, we derive an equity value of Rs 52.5 billion or Rs 757/share.

Key risks: Slowdown in overall office leasing across India and pricing competition among co-working flexible workspace operators.

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