Awfis Space Solutions Limited — Q3 FY26

Awfis Space Solutions Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=tnSpk1TYqKk Published: 3 months ago

0:00 Ladies and gentlemen, good day and welcome to the Office Wave Salation Limited Q3 FI26 earnings conference call 0:07 7 seconds hosted by Ambedut Capital Private Limited. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you 0:16 16 seconds to ask questions after the presentation concludes. 0:20 20 seconds Should you need assistance during the conference call, please signal an operator by pressing star then zero and attach on phone. Please note that this 0:29 29 seconds conference is being recorded. I know the conference over to Mr. Shamitas from Ambed Capital Private Limited. Thank you and over to you sir. 0:38 38 seconds Yeah, thank you. Uh good evening everyone. On behalf of Ambbit Capital, I would like to welcome you all to the third quarter and 9 month FY26 earnings 0:48 48 seconds conference call of Office Space Solutions Limited. From the management we have with us Mr. Amit Ramani, chairman and managing director, Mr. 0:57 57 seconds Sumit Lakhani CEO, Mr. Ravi Dugar, CFO and Mr. Sumit Rochelani, Deputy CFO. We 1:05 1 minute, 5 seconds would like to now begin the call with opening remarks from the management post which we will have the forum open for an 1:12 1 minute, 12 seconds interactive Q&A session. Thank you and over to you Amit and Sumit. 1:18 1 minute, 18 seconds Thank you Shame. Uh good evening and very warm welcome to everyone present on the call. Along with me I have Mr. Mr. 1:24 1 minute, 24 seconds Sumit Lakhani our CEO, Mr. Rabi Dubar our chief financial officer, Mr. Sumit Roani our deputy financial officer and 1:32 1 minute, 32 seconds SGA our investor relation adviserss before we begin we would like to place on record our sincere appreciation for the valuable contribution and leadership 1:40 1 minute, 40 seconds of Mr. Ravi Doug during his tenure with the company we thank him for his dedication and the role he has played in strengthening the company's financial 1:48 1 minute, 48 seconds framework I would like to also inform you that the board has appointed Mr. 1:52 1 minute, 52 seconds Sumit Rochlani as the chief financial officer of the company effective February 3rd 2026 based on the recommendations on the 2:00 2 minutes nomination and remuneration committee Mr. Rochlani brings over 14 years of experience across audit, controllership, 2:08 2 minutes, 8 seconds financial planning and analysis, corporate finance and indirect taxation. 2:12 2 minutes, 12 seconds Having previously served as head of finance at office, he brings valuable continuity and deep understanding of the business as he steps into this role. 2:20 2 minutes, 20 seconds Coming to our quarterly performance, we have uploaded our Q3 526 results and presentation on the exchanges and I hope everybody had an opportunity to go 2:28 2 minutes, 28 seconds through the same. Let me start with a brief overview of the business for the year. As India's largest flexible workspace provider, office delivers a 2:36 2 minutes, 36 seconds strong performance amid buo commercial real estate environment. This is supported by a record office leasing of 82 million square ft in 2025 across 2:45 2 minutes, 45 seconds major Indian cities driven by sustained demand from domestic enterprises and GCC's. These are operating across 2:52 2 minutes, 52 seconds technology, BFSI, engineering and emerging new sectors. In Q3 FI26, office continues to maintain its strong growth 3:00 3 minutes trajectory supported by sustained client demand, healthy occupancy levels and operational efficiency. Revenue for the quarter grew 20% yearon-year to 382 3:09 3 minutes, 9 seconds crores while Aida increased to 30% to 139 crores with margins expanding by 270 3:16 3 minutes, 16 seconds basis points on a year-on-year basis, reflecting improved scale efficiencies, a higher share of mature centers and a 3:23 3 minutes, 23 seconds favorable operating leverage. Our co-workin allied services segment continued to lead growth rising 32% 3:30 3 minutes, 30 seconds yearonear to rupees 322 crores and contributing 80% 84% of the total revenue. This momentum was driven by our 3:38 3 minutes, 38 seconds ability to maintain high occupancy levels across an expanded seed base coupled with strong traction from GCC's and enterprise clients. Additionally, 3:47 3 minutes, 47 seconds the construction fit out projects further referenced as office transform segment contributed rupees 60 crores during the quarter. Revenues here saw a 3:56 3 minutes, 56 seconds decline primarily due to temporary project deferrals and ex execution delays linked to grab four pollution norms as well as lower managed 4:05 4 minutes, 5 seconds aggregation seat addition during the 9-month FY26 versus last year. Looking ahead, the demand for office transform 4:13 4 minutes, 13 seconds remains strong. The third party pipeline currently spans about 9 lakh square ft translating roughly into 200 crores of revenue opportunity while the managed 4:22 4 minutes, 22 seconds aggregation link transform pipeline covers about four lakh ft of upcoming supply with project execution expected 4:29 4 minutes, 29 seconds to normalize and multiple large mandates moving into active delivery. The segment is positioned for a strong recovery 4:36 4 minutes, 36 seconds trajectory. Our geographic expansion strategy continues to strengthen our panindia presence. Today we stand tall 4:43 4 minutes, 43 seconds with 257 centers nearly 1 lakh77,000 seats across 18 cities serving a diverse base of 3,400 client companies from 4:51 4 minutes, 51 seconds dynamic startups emerging enterprises to large corporates and GCC's we continue to focus on gradea buildings and premium 4:58 4 minutes, 58 seconds locations aligning with evolving requirements of GCC's and large enterprises 100% of the new supply was on grade A and A minus assets with a 5:07 5 minutes, 7 seconds rising share of gold and elite formats reinforcing premium enterprise led positioning. Our tier 2 seat capacity 5:14 5 minutes, 14 seconds grew by 16% year on year, showcasing the growing acceptance and adoption of flexible workplace models beyond 5:21 5 minutes, 21 seconds traditional metropolitan centers. On the industry front, a street structural shift underways growing preference for 5:29 5 minutes, 29 seconds flexibility. Occupiers are increasingly seeking speed to market, capital efficiency, compliance, readiness, and scalability requirements that 5:36 5 minutes, 36 seconds traditional real estate models often struggle to meet. Flexible workspace solutions have therefore transitioned from being tactical or interim 5:45 5 minutes, 45 seconds arrangements to becoming a core component of enterprise real estate strategy. Flexible workspaces currently 5:52 5 minutes, 52 seconds account for roughly 16th of total new office leasing in India and are expected to reach approach almost 1/5 of over the 6:00 6 minutes near term. A powerful structural demand driver continues to be the rapid expansion of global capability centers 6:07 6 minutes, 7 seconds in India. Global enterprises are increasing scale. Their India presence through GCC supported by country's deep talent pool and structural cost 6:15 6 minutes, 15 seconds advantages with GCC is expected to account for approximately 40% of the total office absorption in 2026. 6:22 6 minutes, 22 seconds Importantly, this demand is becoming more broad-based extending beyond large multinationals to include mid-market global firms, global unicorns, and 6:31 6 minutes, 31 seconds emerging new age sectors. The m momentum is further reinforced by recent measures announced in the union budget 2026 aimed 6:39 6 minutes, 39 seconds at improving long-term tax certainty for multinational corporations. Key among these is the indic introduction of the 6:46 6 minutes, 46 seconds long-term tax holiday for common uh for foreign companies delivering global digital and cloud services using India 6:53 6 minutes, 53 seconds based infrastructure which significantly reduces uncertainty around future tax liabilities and strengthens India's attractiveness as a global operating 7:01 7 minutes, 1 second base. In parallel, the budget introduced transfer pricing norms applicable to multinational corporations, improving tax clarity and predictability for 7:09 7 minutes, 9 seconds global enterprises operating services in India technology and capability center which are being driven from here. These 7:17 7 minutes, 17 seconds measures significantly enhance ease of operations for MNC's adding incremental fuel to an already strong growth cycle 7:24 7 minutes, 24 seconds and supporting sustained demand for scalable enterprisegrade workplace solutions. In office, we already have 80 7:31 7 minutes, 31 seconds plus GCC's in our ecosystem and we have aligned our strategy to capture this opportunity by moving up the value curve. Strengthening our presence in 7:40 7 minutes, 40 seconds grade A and A plus assets locations and seeing increasing traction from midsize and large GCC's with 500 plus field 7:47 7 minutes, 47 seconds clients now contributing to 36% of our portfolio. Our growing golden elite center footprint and pan India network 7:55 7 minutes, 55 seconds position us well to capture both new GCC setups and expansionled demand. At office we believe one of our biggest 8:02 8 minutes, 2 seconds strengths is our ability to address demand of the across the entire spectrum of occupiers. On one hand we are very 8:10 8 minutes, 10 seconds well positioned to capture large enterprises and GCC demand through manage office segment where clients are looking for speed, compliance, scalability and long-term flexibility. 8:20 8 minutes, 20 seconds On the other hand, we continue to serve small cohorts through our co-working segment which remains strategic part of our business. Importantly, office is the 8:28 8 minutes, 28 seconds only large cla play player in India with strong presence in small cohort co-working segments catering to clients ranging from single seats to more than 8:35 8 minutes, 35 seconds 100 seats. This is a highly operation intensive business. It requires years of execution capability, strong processes 8:43 8 minutes, 43 seconds and on ground depth to build at a scale that we operate today. office portfolio depth meaningfully reduces client concentration risk and enhances the 8:52 8 minutes, 52 seconds resiliency and stability of our revenue profile. As we move forward, our focus remains unwavering to build the most 8:59 8 minutes, 59 seconds agile, high performing and the future ready workspace ecosystem in India. On the client side, we continue to enhance the experience through technology 9:07 9 minutes, 7 seconds integration, superior design and sustainable operation. Our aim is to position office not just as a workplace provider but as a long-term strategic 9:16 9 minutes, 16 seconds partner that empowers businesses to scale with agility and confidence. Let me hand it over to now Mr. Sumit Akani 9:24 9 minutes, 24 seconds our CEO to share Q3 FY26 operational highlights. Over to you Sumit. 9:30 9 minutes, 30 seconds Thank you Ahmed. Good evening everyone. 9:33 9 minutes, 33 seconds I would like to share with you the key operational highlights for Q3 FI 2026. 9:38 9 minutes, 38 seconds On the supply side, during the quarter we added 8,000 plus new seats, bringing our total capacity to around 152,000 9:46 9 minutes, 46 seconds operational seats across 232 centers pan India as of December 2025. 9:53 9 minutes, 53 seconds When including centers currently in the fit out phase and those under LOI, our total capacity now stands at around 10:00 10 minutes 177,000 seats across 257 centers covering an expansive 8.6 6 million square ft. Year on year, our growth 10:09 10 minutes, 9 seconds remains robust. Operational seats and centers grew by 25% and 20% respectively. Looking ahead, we have a 10:17 10 minutes, 17 seconds pipeline with signed lois for 11 new centers, adding approximately 11,000 seats and.5 million square ft of 10:24 10 minutes, 24 seconds chargeable area. On the premium workspace side, we now have 32 centers divided between 25 gold centers and 10:33 10 minutes, 33 seconds seven elite centers across some of the most prestigious commercial locations in the con country. Moving to our supply 10:40 10 minutes, 40 seconds pipeline, our expansion continues to be driven by a deep and highquality managed aggregation pipeline enabling capital 10:47 10 minutes, 47 seconds efficient network growth. Currently we have 8 lakh square ft² of MA supply committed across prime micro markets. Of 10:56 10 minutes, 56 seconds this 4.1 lakh square ft is already confirmed across key cities including Mumbai, Pune, Delhi, NCR, Hyderabad, 11:04 11 minutes, 4 seconds Chennai and Kolkata. The balance 3.99 lakh square ft is under advanced stages of closure providing clear visibility 11:12 11 minutes, 12 seconds for asset light growth over the coming years. On the demand side, we signed contracts for 15,000 plus new seats in 11:20 11 minutes, 20 seconds Q3 FY26 and roughly 57,000 new seats since December 2024, reflecting a well 11:27 11 minutes, 27 seconds diversified revenue base. Approximately 64% of our occupied seats are taken by large corporates and MNC's, 25% by 11:36 11 minutes, 36 seconds SMMES, midcorporates, 10% by startups and remaining share by freelancers. We are very happy to announce that we have 11:44 11 minutes, 44 seconds 80 plus GCC's in our ecosystem contributing 21% of our space uh revenue share. During 9 month FY26, we closed 12 11:54 11 minutes, 54 seconds deals with GCC's and 11 more already logged in to go live between January to June 2026. 12:01 12 minutes, 1 second Notably, multic-enter clients account for 46% of occupied seats for us. This cohort comprises over 300 plus clients 12:10 12 minutes, 10 seconds with an average tenure of approximately 42 months underscoring strong client stickiness. Within this space, 27% of 12:19 12 minutes, 19 seconds clients operate in more than three centers, 15% across more than five centers, and 6% across more than 10 12:26 12 minutes, 26 seconds centers, reflecting sustained expansion within our network. The average client tenure has increased to 37 months with an average lockin period of 26 months. 12:37 12 minutes, 37 seconds demonstrating strong long-term client commitments. 12:40 12 minutes, 40 seconds Our client base remains highly diversified with more than 3,400 plus active clients as of December 2025. 12:48 12 minutes, 48 seconds We are currently operating at an overall occupancy level of about 75% versus 73% last year, providing meaningful headroom 12:57 12 minutes, 57 seconds for margin expansion and growth without incremental capex. Demand performance remains robust with centers older than 13:05 13 minutes, 5 seconds 12 months operating at 84% occupancy reinforcing the steady ramp up curve and the strength of mature centers. This 13:13 13 minutes, 13 seconds segment is largely served through our asset light manage aggregation model and supported by favorable pricing and higher OC's. It continues to be a highly 13:21 13 minutes, 21 seconds profitable and scalable growth engine for office. 13:25 13 minutes, 25 seconds Despite the competitive nature of the market, we have continued to deliver profitable growth reflecting disciplined execution and a differentiated operating 13:33 13 minutes, 33 seconds model. Our strategy remains focused on midsize mandates complemented by select large engagements such as uh national 13:42 13 minutes, 42 seconds stock exchanges. We are increasingly partnering with first-time GCC's which tend to be highly sticky and long-term 13:49 13 minutes, 49 seconds in nature. With a dedicated team systematically identifying and pursuing GCC opportunities aligned with our strategic criteria, we have strong 13:58 13 minutes, 58 seconds confidence in the sustainability and scalability of our managed office growth. With India adding approximately 20 to 30 firsttime GCC's every quarter. 14:08 14 minutes, 8 seconds Our existing portfolio of over 80 plus GCC's combined with long-standing relationship with GCC enablers and 14:15 14 minutes, 15 seconds consultants across India, US and Europe provides us early and consistent access at the inception stage of GCC setups. 14:24 14 minutes, 24 seconds This together with our proven enterprisegrade execution capabilities enable office to capture a meaningful share of this growing segment. 14:33 14 minutes, 33 seconds That concludes my update. I will now hand over to Ravi our CFO for the financial discussion. 14:41 14 minutes, 41 seconds Thanks UTIT. Good evening everyone and a very warm welcome to everyone. Let me give you a quick overview on our financial performance. 14:48 14 minutes, 48 seconds Our consolidated operating revenues stood at 382 crores which is a strong growth of 22 20% on a year yony basis 14:58 14 minutes, 58 seconds and for 9 month FY26 it was,83 kores which is a growth of 25% year-on-year basis. This was supported 15:07 15 minutes, 7 seconds by a robust growth growth in our co-working and life services business which grew by 38% on a y basis. The 15:14 15 minutes, 14 seconds operating eida stood at 139 crores a growth of 30% on y basis. The margins stood at 36.5%. 15:23 15 minutes, 23 seconds And for a 9month FY26 the operating eida stood at 398 crores again a growth of 39%. With aida margins at a strong 36.7%. 15:35 15 minutes, 35 seconds In Q3 FY26 PAT excluding exceptional items stood at 22 crores compared to rupees 15 kores in Q3 of last year. And 15:44 15 minutes, 44 seconds for 9 month FI26 PAT excluding exceptional items stood at rupees 48 crores compared to 32 crores in 9 month 15:51 15 minutes, 51 seconds of last financial year. On the normalized basis which is adjusted for India's 116 lease rentals and for 15:58 15 minutes, 58 seconds India's 109 and 102 the normalized operating AIDA stood at 55 crores a growth of 18% on a y or y basis for this 16:07 16 minutes, 7 seconds quarter. For 9th for 9 month FI26, the operating EITA stood at 155 crores which is a growth of 30% on a Y basis. 16:18 16 minutes, 18 seconds On liquidity, our position continues to be very strong with the net debt to equity ratio at minus0.06% 16:25 16 minutes, 25 seconds as at 31st December 25. This is all from our end. We open up we now open the floor for Q&A. 16:34 16 minutes, 34 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask question may press 16:42 16 minutes, 42 seconds star and one on the touchstone telephone. If you wish to remove yourself from question Q, you may press 16:48 16 minutes, 48 seconds star and two. Participants are requested to use handsets while asking a question. 16:54 16 minutes, 54 seconds Ladies and gentlemen, we'll wait for a moment while the question Q assembles. 17:42 17 minutes, 42 seconds The first question is from the line of Girish Chri from Aendas Park. Please go ahead. 17:48 17 minutes, 48 seconds Yeah. Hi. Uh good evening. Thanks for the opportunity. Uh firstly uh how should we look at the occupancies going ahead? Uh this port is 75%. 18:01 18 minutes, 1 second uh all right if you can give a bit of detail about what can happen to the occupancy u because what I see is that 18:08 18 minutes, 8 seconds the matured center occupancy uh has remained at around 84% so is this uh optimal kind of occupancy in the mature 18:16 18 minutes, 16 seconds centers so the incremental uh uh ramp up has to come in from the centers which have been added in the last 6 to 9 18:23 18 minutes, 23 seconds months so uh so that's the first question yeah hi [clears throat] Gish this Sumit. 18:30 18 minutes, 30 seconds So with respect to occupancy as you would see over the last one year the blended occupancy uh has increased by over uh 200 basis point from 73 to 75%. 18:41 18 minutes, 41 seconds So there is a um serious effort with respect to improving the occupancy. Um uh the way uh the new sales uh is 18:50 18 minutes, 50 seconds happening and the kind of committed new sales has happened. we see uh a serious improvement around on um occupancy 18:58 18 minutes, 58 seconds buildup in the next one and two quarter itself where uh we uh we feel very optimistic around uh moving these 19:04 19 minutes, 4 seconds numbers substantially. In terms of uh the occupancy for u 12 month plus 19:12 19 minutes, 12 seconds centers internally uh we think 84 85% is not the uh steady state. Uh this can uh 19:19 19 minutes, 19 seconds get uh increased up. uh we see couple of centers u u are taking a bit uh longer. 19:26 19 minutes, 26 seconds So uh in the next one or two odd quarters you would see even this segment uh getting an improvement uh by almost about 100 to 150 basis point. 19:37 19 minutes, 37 seconds Okay. Great. So this this improvement you're expected to see in the in the coming one to two quarters is is is that right? 19:46 19 minutes, 46 seconds Yes. Because like I mentioned uh uh the way we have visibility of signed seats pipeline in the next one to two quarter 19:54 19 minutes, 54 seconds we are uh expecting uh improvement in both blended occupancy for uh the whole portfolio as well as uh improvement 20:03 20 minutes, 3 seconds around in the uh occupancy across the 12 month plus portfolio. 20:08 20 minutes, 8 seconds Sure. Sure. Okay. Um secondly on on the uh the overall uh pricing right what 20:16 20 minutes, 16 seconds what's the kind of price growth you're seeing like to light uh in in the same centers and uh also wanted to understand 20:24 20 minutes, 24 seconds the margin tra trajectory going ahead in the co-working segment. 20:29 20 minutes, 29 seconds So um Vish uh as we would have mentioned earlier as well the pricing is a direct reflection of uh the overall micro uh 20:38 20 minutes, 38 seconds micro market rental at that uh point of uh time. So any uh even for a mature center any new customer who is coming in 20:46 20 minutes, 46 seconds that center uh the pricing reflects the current uh micro market rental. So which uh in the last one to two years uh is 20:55 20 minutes, 55 seconds higher. So the the customer ends up paying a larger price for the existing customer cohort. Uh our u agreements 21:02 21 minutes, 2 seconds contracts have 5 to 7% uh kind of escalations being built in where u for 21:10 21 minutes, 10 seconds small to midsize cohorts and four to 5% escalations for larger size cohorts. So uh in any case uh for the existing 21:19 21 minutes, 19 seconds client cohorts uh uh the overall business model uh enables about 5% kind 21:26 21 minutes, 26 seconds of escalation in pricing. So that's always built in and that's the nature of the business. 21:38 21 minutes, 38 seconds Does that answer your question Girish? The participants have led the queue. 21:45 21 minutes, 45 seconds Move to the next. The next question is from the line of Vash Galanji. Please go ahead. 21:53 21 minutes, 53 seconds Uh good evening P. Thank you for taking my question. Um the tenure bucket of greater than 24 months uh has not really 22:01 22 minutes, 1 second changed in any material way despite uh enterprise MNC's including SMMES and midsize corporates making a a bigger portion of your client distribution. 22:11 22 minutes, 11 seconds Um so please help me understand the corporates MNC's ormemes in your client mix. What cohort of seats do they 22:20 22 minutes, 20 seconds usually prefer? What kind of lease terms are they signing and how do you expect this mix to evolve in the future? 22:26 22 minutes, 26 seconds Right? So uh if you look at the tenure bucket u the greater than 24 months uh tenure clients constitute about 73% of 22:35 22 minutes, 35 seconds our uh portfolio currently and uh 12 to 23 is 20%. Um I see from my vantage 22:43 22 minutes, 43 seconds point the way I see is I have seen uh this tenure bucket u growing up uh uh significantly around over the last 22:50 22 minutes, 50 seconds couple of uh years. uh I I'm probably you may be referring to one or two quarters of data uh I don't have that 22:58 22 minutes, 58 seconds data handy uh with me but uh if we look at over the last one to two years period uh I have seen uh this uh growing 23:07 23 minutes, 7 seconds significantly and uh where we feel u very uh you know confident around is uh 23:15 23 minutes, 15 seconds because we originally when we started the overall tenure buckets used to be between 6 to 12 months and now almost 23:22 23 minutes, 22 seconds about 2/3 of the business uh it is around more than 12 uh 24 odd months. Uh to your question around on what kind of 23:30 23 minutes, 30 seconds preferences various kind of occupiers have with respect to uh various uh tenure buckets, it's more around on the 23:38 23 minutes, 38 seconds cohort sizes. Uh generally a larger cohort uh let's say a 200 300 plus seater cohort prefers to uh sign up for 23:47 23 minutes, 47 seconds uh 36 to 48 months uh kind of lockins and 48 to 60 months kind of you know tenurs whereas shorter tenure customers 23:56 23 minutes, 56 seconds uh ends up signing up more between 12 to 24 uh months. It's a bit more agnostic between enterprisesmemes midcorporates and uh startups. 24:06 24 minutes, 6 seconds Yes, just to add to that uh this uh quarter obviously the overall locked in tenure has for the port complete 24:15 24 minutes, 15 seconds portfolio is now 26 months uh instead of 24 and the tenure for the overall portfolio 32 and if you look at the 24:24 24 minutes, 24 seconds greater than 100 seats which typically is the you know the larger cohorts that overall locked in tenure is basically 37 24:33 24 minutes, 33 seconds months and basically uh uh the total tenure is about 49 months. 24:40 24 minutes, 40 seconds So there's been significant improvement as we see it in those two buckets as well. You also need to understand that a large portion of our portfolio almost 24:48 24 minutes, 48 seconds 45% is less than 100 seats and in that obviously there will be a bit more you know uh lesser uh you know tenure 24:58 24 minutes, 58 seconds okay understood and yes indeed I was just comparing numbers from previous quarter but um so I know you uh spoke 25:05 25 minutes, 5 seconds about uh your blended occupancy improving because of increased sales traction uh please help me understand what is causing that increased sales 25:13 25 minutes, 13 seconds traction. Is this something that in your offering that has changed or is it something in the macroeconomic environment that you see changing that's causing these decrease in sales? 25:22 25 minutes, 22 seconds So uh so go ahead go ahead. 25:27 25 minutes, 27 seconds So primarily this had been organic. If you would see the number of new seeds sold we have been doing uh selling every 25:34 25 minutes, 34 seconds quarter. Uh it's broadly u organically increasing uh every quarter. uh there is 25:41 25 minutes, 41 seconds a significant level of uh behavioral change u with uh occupiers looking to prefer flex and uh that is continuing 25:49 25 minutes, 49 seconds and that's uh probably why the demand is going up now u where you are seeing also some improvement around in blended 25:57 25 minutes, 57 seconds occupancy is also a function of the aging of centers till about two quarters back lot of our centers were aged between 0 to 3 months uh kind of a 26:06 26 minutes, 6 seconds bracket as that uh profile of vintage of those centers became 6 to 7 months they have started hitting higher occupancies. 26:14 26 minutes, 14 seconds We generally require about 9 to 10 months for centers to start hitting 80% plus kind of occupancy. So it's a 26:21 26 minutes, 21 seconds function of both that lot of our centers which we opened uh during Q4 of last financial year they were more uh without 26:30 26 minutes, 30 seconds any kind of customers. they were pure um speculative centers where we opened up a center and then we were waiting for the 26:38 26 minutes, 38 seconds or we were filling in the demand for those centers versus the kind of centers where uh you start with a new demand. So 26:45 26 minutes, 45 seconds the overall cycle is about 9 to 12 months to hit occupancies. So currently it's more organic uh market and demand 26:53 26 minutes, 53 seconds over the last couple of years uh had been growing steadily uh with the absor uh more adoption of co-working. 27:03 27 minutes, 3 seconds Thanks. That's helpful. And this one lasts from uh me going forward um what proportion of your revenue from operations is expected from construction and business? 27:16 27 minutes, 16 seconds So roughly about 20% of the revenue is expected from the construction fit out business. Currently the split is about 27:22 27 minutes, 22 seconds 8317 but roughly this will settle in somewhere around 80/20 kind of a number. 27:30 27 minutes, 30 seconds Go ahead. Thank you very much. 27:35 27 minutes, 35 seconds Thank you ladies and gentlemen. In order to ensure that management is able to address questions from all the participants in 27:42 27 minutes, 42 seconds the queue, please limit a question to one question per participant. Do you have a follow-up question? We request you to rejoin the queue. The next 27:52 27 minutes, 52 seconds question is from the line of Adid from IIC Securities. Please go ahead. 27:58 27 minutes, 58 seconds Yeah, good evening everyone. Thank you for the opportunity. Uh the first question to Amit and Sumit is uh could you help us uh think what is going to be 28:06 28 minutes, 6 seconds the end of 26 operational seeds and a similar number for FI27 considering the pipeline which we have now. Yeah, that is my first question. 28:16 28 minutes, 16 seconds So Advance for FI26 is somewhere around 32,000 seats for FI26. Um I would not want to 28:25 28 minutes, 25 seconds comment on the FI27's guidance right now which we'll give as part of the revenue and the other financial metric guidance that we will provide in the last quarter. 28:35 28 minutes, 35 seconds Okay. So then this 152,000 right 1 lakh 52,000 goes to around how much incrementally? 28:42 28 minutes, 42 seconds So we ended FI25 at 1 lakh 35,000 seats. 28:46 28 minutes, 46 seconds So roughly you add another 30,000 somewhere around 1 lakh 66 or,000 seats. 28:51 28 minutes, 51 seconds Okay. So okay so this quarter is going to be a means uh quite a few number of seats should open up right in this quarter one quarter 28:58 28 minutes, 58 seconds that is correct if you if you see the uh under fit out right the centers is 1 lakh 66 already right so the these 29:07 29 minutes, 7 seconds centers are already under fit out so the 1 lakh 52 will be closer to 1 lak 66 at the exit of fi 26 March 26 29:18 29 minutes, 18 seconds okay okay uh and sir you alluded obviously 20 you don't have to share guidance but uh the overall 1 lakh 29:25 29 minutes, 25 seconds 77,000 uh this is something we have clear visibility means uh over the next 18 months this should definitely come on stream or uh how should we look at it 29:34 29 minutes, 34 seconds we we have clear visibility down to the center level I mean we know the name of the building asset where this will go 29:42 29 minutes, 42 seconds live so complete clarity on that 1 lakh 77,000 seat okay okay fine fine fine uh yeah the 29:50 29 minutes, 50 seconds second Question is mainly for Ravi or if you could answer the just wanted a capex number YTD this numbers are 110 crores 29:57 29 minutes, 57 seconds right in the 6 months so what is the number for 9 months and uh 26 how much do you end are you going to end up with 30:06 30 minutes, 6 seconds yeah so for for uh for the 9 month period the number is 159 crores okay 30:13 30 minutes, 13 seconds and we had given a guidance of 200 to 210 beginning of the year and we expect the number to be around that only. 30:23 30 minutes, 23 seconds Okay. So, another 55 60 crores of capex. 30:26 30 minutes, 26 seconds Okay. And just as a bookkeeping question, yeah, the net cash or on books as of December, you have that number handy. 30:36 30 minutes, 36 seconds Yeah. The cash balance what we have is around 95. Yeah. One second. I'll give you the number. Yeah. Yeah. 30:46 30 minutes, 46 seconds Hold on. 30:48 30 minutes, 48 seconds 96 crores. The cash balance is in the books. Okay. Including investments. 30:56 30 minutes, 56 seconds Including investments. Yeah. Okay. Around 96 crores. 31:00 31 minutes Yeah. 96 crores is the including FDS and you know the cash balance and whatever we are carrying. 31:05 31 minutes, 5 seconds Okay. Okay. Okay. And sir just last one this taxation are we out of it from this fourth quarter onwards? Do we move to a 31:13 31 minutes, 13 seconds normal tax rate means uh or uh there are still some losses and all which we can cover in the thing? 31:19 31 minutes, 19 seconds So we have a runway of one more year from here. 31:23 31 minutes, 23 seconds Okay. Okay. Okay. Another three or four quarters. We'll be out of it most likely. Okay. Okay. Fine sir. Fine. Fine sir. 31:33 31 minutes, 33 seconds Yeah. That's it from my side. All the best. I'll come back in the moment. Thank you. Thank you. 31:40 31 minutes, 40 seconds The next question is from the line of VR Kashia from Asian market securities. Please go ahead. 31:47 31 minutes, 47 seconds Hi, good evening to the team. Uh my first question pertains of the uh seat addition. So 31:54 31 minutes, 54 seconds the industry has shown a very strong seat addition during the quarter while if you look at we have added only 8,000 seats compared to around 11,000 plus 32:03 32 minutes, 3 seconds seats same quarter last year. So where uh we went wrong this quarter was the seat sold number are very high compared 32:10 32 minutes, 10 seconds to what the state standards are but in the terms of seat addition and also the 32:17 32 minutes, 17 seconds uh share of managed seats which used to be 65 67 odd% is now 62% of the portfolio. So where the deferrals are uh 32:26 32 minutes, 26 seconds and how we are planning ahead because we had earlier guided for 40,000 seats in the beginning of the year now we are guiding for 32,000 seats. 32:35 32 minutes, 35 seconds So can you please throw some more lights on that? 32:38 32 minutes, 38 seconds Yeah. So uh the original guidance for uh seat additions had been around 40,000 gross edition in a year. Uh whereas we 32:47 32 minutes, 47 seconds are now guiding around 32 to 33,000 seats uh to be added u this financial year. See it's primarily uh from a 32:56 32 minutes, 56 seconds perspective that we don't need to add uh lot of seeds for our revenue uh growth. 33:01 33 minutes, 1 second Our focus is more around on building uh blended occupancies uh for uh the current portfolio 33:08 33 minutes, 8 seconds uh and uh run it that way. Uh so we are taking a more balanced approach around on it because u uh in if you look at the 33:17 33 minutes, 17 seconds last 6 to 9 months had also been a very uh peak commercial real estate cycle and we are playing it very guarded and 33:26 33 minutes, 26 seconds conservatively because we don't want to be stuck with uh signing up deals at prices which are not uh conducive for us 33:33 33 minutes, 33 seconds in long term. So that is primarily you know one of the reasons where we had been a bit more conservative in the whole uh financial year with respect to 33:42 33 minutes, 42 seconds our seat additions. Second we had been uh balancing our u overall blended occupancy along with it uh along with 33:50 33 minutes, 50 seconds the margins because we don't want to be in a situation where we add up more seats uh and sit with a bit more uh muted kind of occupancy which will have 33:58 33 minutes, 58 seconds a negative impact on the overall margins. If you look at now uh currently in our presentation also we had given 34:05 34 minutes, 5 seconds the complete uh pipeline of our seeds uh especially in the managed aggregation uh way uh and the the numbers and the kind 34:15 34 minutes, 15 seconds of pipeline uh looks u uh very uh promising. Uh third uh if you see our 34:22 34 minutes, 22 seconds business model is significantly different than most of the peers. Uh for most of the peers they end up taking very large uh spaces. uh so the seat 34:32 34 minutes, 32 seconds addition numbers becomes straightforward uh and their model is more around on straight leases. Our model is more 34:39 34 minutes, 39 seconds hinged around on setting uh setting up midsized co-working centers which cater to larger number of clients um uh around 34:49 34 minutes, 49 seconds and u which we believe works in a bit better uh form both from a capital uh 34:57 34 minutes, 57 seconds light perspective as well as uh managing the risk perspective and that's the model we follow. So there the seat 35:06 35 minutes, 6 seconds addition will always grow in a bit more organic way versus uh what the peers do. 35:11 35 minutes, 11 seconds If I can take an example uh it's more like building a retail banking brook u with uh doing some level of managed 35:19 35 minutes, 19 seconds offices uh could be some larger loans happening versus building a complete NBFC book. So our approach to life is 35:26 35 minutes, 26 seconds build the business more organically on a uh you know brick by brick basis uh uh in a fundamentally right manner. So 35:33 35 minutes, 33 seconds that's uh what we have been doing. My last point over here would be under uh like if you go through our presentation we have also given guidance around on uh 35:42 35 minutes, 42 seconds how the seat edition is happening across various quarters. Uh lot of our managed aggregation uh seats are have already 35:50 35 minutes, 50 seconds been forward leased. uh we have signed up uh these buildings which are brand new buildings which will go live in the 35:56 35 minutes, 56 seconds coming quarters and um uh that's the reason why a bit uh uh you know this addition of seats in this financial year. 36:06 36 minutes, 6 seconds Okay. So the second question is on your transform business. So for last two quarters uh we have seen deferral in 36:13 36 minutes, 13 seconds execution or delay by the landlords in the handover. Still in the 9 months numbers we look at we are down by around 10% on a Y basis and we are still 200 K 36:22 36 minutes, 22 seconds of pipelines. Could you please highlights uh what what went wrong this financial year because you are growing very strongly in the transform business 36:30 36 minutes, 30 seconds suddenly everything is stuck and the margin profile also deteriorated and so so what what kind of a study is 36:38 36 minutes, 38 seconds under we can see and what kind of margin profile if you look at in the transform business so the DNV revenue obviously should be 36:45 36 minutes, 45 seconds viewed on a year-on-year basis so Q3 FI26 was impacted as we said earlier due to the graph restrictions in north and 36:52 36 minutes, 52 seconds this had three large client projects that obviously led to a revenue dip. Uh the office and the construction fit out has two revenue streams. Managed 37:00 37 minutes aggregation which is landlord spend and the external client design and fit out projects. The lower managed aggregation seat addition and 9 months period. 37:08 37 minutes, 8 seconds Obviously last year's impacted the revenue as that number came down. The second piece is that the external client pipeline is obviously very very strong 37:17 37 minutes, 17 seconds and obviously is seeing growth and obviously in this revenue segment and providing obviously a positive outlook uh going forward. As far as the margin 37:24 37 minutes, 24 seconds profile goes, it's a fixed cost business right. So as the revenue dips obviously the margin will dip because the fixed cost of people continues even when your 37:33 37 minutes, 33 seconds uh your revenue might drop for a reason such as grap or you know reduction in the number of managed aggregation seats. 37:41 37 minutes, 41 seconds Yes, that clarifies. Uh thank you. Uh one thing that uh you would did very well that you have given the bifocation of our base gold and elite models uh and 37:50 37 minutes, 50 seconds also would request if you can give a bifocation of your co-working and managed uh enterprise models bifocation if you can from this. 37:58 37 minutes, 58 seconds Sure happy to do that from the future. 38:01 38 minutes, 1 second Right now obviously I don't have the data handy with me but absolutely happy to no thank you very much and wish best of luck. 38:08 38 minutes, 8 seconds Okay thank you very much. Thank you. 38:13 38 minutes, 13 seconds The next question is from the line of Yeshua Bardan Agarwal from IIFL Capital Asset Management. Please go ahead. 38:22 38 minutes, 22 seconds Yeah. Hi, good evening and thanks for taking my questions on couple of questions from my side. So, initially we had guided for 30% growth in revenue, 38:30 38 minutes, 30 seconds 30% growth in AIDA. Uh does that still hold true for us? 38:40 38 minutes, 40 seconds So uh if you [clears throat] look at the way uh the overall business is going and u from a co-working segment perspective 38:50 38 minutes, 50 seconds uh both the revenue guidance as well as the uh margin guidance we are meeting uh but as of 9 month uh the design and 38:58 38 minutes, 58 seconds build uh business as Amit has uh explained is a area where uh the uh the guidance is not going uh as per planned. 39:06 39 minutes, 6 seconds So uh but otherwise uh in uh co-working segment uh both the margin as well as the revenue guidance we are going as per the guidance. 39:16 39 minutes, 16 seconds Okay. Uh and so coming on to the occupancy it has improved year on year by 200 bits. But if I look at the uh 39:24 39 minutes, 24 seconds occupancy of the new seats that we have added so that has been dipped quarter on quarter. So what is the reason that we 39:31 39 minutes, 31 seconds are unable to scale up or ramp up the occupancy of the new seats that we are adding? 39:37 39 minutes, 37 seconds So can you explain how you are figuring out the occupancy for the new seats? 39:43 39 minutes, 43 seconds Sure sir. Uh so sir I do have the data for total operational seats uh last year. 39:50 39 minutes, 50 seconds Um that is in Q325 right? 39:54 39 minutes, 54 seconds So in that the total operation seats were around 1 lakh 22,000 and you had the number of occupancy of 40:02 40 minutes, 2 seconds more than 12 minutes that is 84%. So sir I can calculate what would be the occupancy of those seats the new seats that we have added this year. So current it's around 1 lakh 52,000 seats. 40:13 40 minutes, 13 seconds So sir on that basis sir I can and the blended number is 75% is given. So 1 lakh 22,000 into 84% will give me the 40:22 40 minutes, 22 seconds occupancy of the mature seats and 1 lakh 52,000 into 75% will give me the blended occupancy. 40:29 40 minutes, 29 seconds So so this is how I have done the calculation. I hope that is okay with you or else I can share it later on as 40:37 40 minutes, 37 seconds well. So see so the way I look at u uh is uh the overall blended occupancy the way it is 40:46 40 minutes, 46 seconds working is u couple of times uh there is a churn in our mature center also uh and then the whole occupancy ramp up for 40:55 40 minutes, 55 seconds that center also needs to do u I don't see um so when we from our vantage point uh the business is not working in a 41:02 41 minutes, 2 seconds manner that uh the seats which we have signed up over last 12 months that there is any slow uh ramp up of occupancy for 41:10 41 minutes, 10 seconds those seats. Um it's more of a blended portfolio that uh couple of you know uh times even the mature center there is a 41:19 41 minutes, 19 seconds churn and it takes a bit longer time around on it. U so we look at the occupancy right now more on a blended basis and we feel that the centers we 41:27 41 minutes, 27 seconds have signed up over the last uh uh you know since Q3 of last financial year the occupancy buildup is happening as per plan. 41:36 41 minutes, 36 seconds Uh so coming on to the churn is that too high because if I look at a presentation from first quarter till third quarter it 41:44 41 minutes, 44 seconds is mentioned that we have signed 15,000 seats in each of these quarters right that is 45,000 seats signed 41:51 41 minutes, 51 seconds versus if I see the change in total occupy se that is coming around 16,000 seats so so is the ramp up happening too slow 42:00 42 minutes or is the ch so high that on a blended level basis we are seeing the occupancy see uh lower than it could have been. 42:08 42 minutes, 8 seconds What if the clone would have been less? 42:10 42 minutes, 10 seconds No, it's it's more of a function that most of the seats were added around in Q4 of last financial year. That's why uh 42:18 42 minutes, 18 seconds I mentioned uh in the first question also that I'm expecting in the next one or two quarters that the blended occupancy will uh grow significantly. 42:27 42 minutes, 27 seconds See uh it's also a function like lot of seats get added in let's say February March of financial uh year uh then we 42:35 42 minutes, 35 seconds still have the centers are the new centers are in seventh or eighth or ninth month of you know operation 42:41 42 minutes, 41 seconds around. So uh uh even the seats like 15,000 seats which we have signed up in this quarter the client joining 42:50 42 minutes, 50 seconds generally happens uh within uh you know uh 60 to 120 odd days from the day they have signed up uh the seat. So uh the uh 43:00 43 minutes the actual occupancy come there's a lag of almost about 60 to 120 odd days. So the centers where we have signed up uh 43:07 43 minutes, 7 seconds or the centers which went live in Q4 of last financial year uh we expect a ramp up in occupancy or the occupancy going 43:16 43 minutes, 16 seconds up beyond 80% plus in those uh centers let's say in Q4 of this financial year as well as you know Q1 of the next financial year. 43:28 43 minutes, 28 seconds Um okay u sorry to interrupt Mr. 43:33 43 minutes, 33 seconds I just just one question just one question then I will come back in the queue. Uh sir if I look at the depreciation per se that 43:40 43 minutes, 40 seconds has increased meaningfully versus last year versus our revenue per se it has been constant. So what is the reason for 43:48 43 minutes, 48 seconds depreciation uh increase if it has been the more increase through state model so 43:55 43 minutes, 55 seconds why are our margins not increasing in the same direction? So that's that is my question. 44:04 44 minutes, 4 seconds So uh so Mr. Graal the depreciation has increased because obviously we have you know kind of focused I mean there's there are few they are actually focus on 44:12 44 minutes, 12 seconds the elite and you know the MOC seats what we are talking about. Uh that has led to an increase in depreciation. Uh 44:21 44 minutes, 21 seconds obviously on the margin side you'll see an uptick in the you know in the coming quarters because these seats have been filled over the last one or two quarters. So this will obviously give an 44:29 44 minutes, 29 seconds uptake in the margins profile for these seeds. 44:34 44 minutes, 34 seconds What is uh sorry you missing something for these seeds? 44:41 44 minutes, 41 seconds Okay. So uh I will come back. Thank you. So thank you. Thank you. 44:47 44 minutes, 47 seconds The next question is from the line of Axa Tri Sara from Ionius Alpha. Please go ahead. 44:54 44 minutes, 54 seconds Yeah. Hi. Thanks for the opportunity. uh the capeex number correct me if I'm wrong uh was 200 210 crores for 40,000 45:03 45 minutes, 3 seconds seats and now you're guiding for the same number despite that number coming down to 32,000 seats is it largely because of the elite part or uh there's 45:12 45 minutes, 12 seconds something more to it so uh you're right uh the if you look at 45:20 45 minutes, 20 seconds in the whole 9 month financial year the larger portion of seats which we uh which went live uh had been more on the 45:28 45 minutes, 28 seconds uh straight lease uh side versus the managed aggregation seats which are right now skewed for Q4 and uh Q1 of 45:38 45 minutes, 38 seconds next financial year. uh why we ended up doing a bit more straight lees uh two reasons. One is uh we uh set up more uh 45:47 45 minutes, 47 seconds few uh elite centers where uh which came in more straightly model where the whole fit out capex needed to be done from our 45:55 45 minutes, 55 seconds side and it also has a higher capeex as compared to our flagship product. 46:00 46 minutes Second, uh we saw significant traction in GCC business uh where uh we set up uh 46:07 46 minutes, 7 seconds new centers for uh these uh GCC's uh and uh these the supply structure in these were 46:15 46 minutes, 15 seconds primary straight leases and uh where we ended up doing our own uh fit out. So it's it's a function that uh in 9 months 46:24 46 minutes, 24 seconds uh the more nature of the business was around on uh GCC's as well as elite versus uh manage uh typically our managed aggregation uh model. 46:36 46 minutes, 36 seconds Okay. and uh uh despite the occupancy jump that hasn't really flown down to uh 46:43 46 minutes, 43 seconds India's EIDA margins. Uh would you only assign it to the transform business or test something beyond that? 46:53 46 minutes, 53 seconds The the main reason for that is the transform business because if you otherwise look at it the margin would have certainly improved in the co-working business but because of the 47:01 47 minutes, 1 second transform business having a bit of a tip this quarter because of the reasons we explained earlier uh it has had a almost 47:08 47 minutes, 8 seconds negligible impact on overall aida improvement in India. 47:14 47 minutes, 14 seconds Okay. And uh would you be able to share cex for 27 right now? I would not be. 47:21 47 minutes, 21 seconds Okay. Sure. 47:25 47 minutes, 25 seconds Thank you. The next question is from the Lion SA from I3 PMS. Please go ahead. 47:34 47 minutes, 34 seconds Uh hi, thank you for your opportunity sir. Uh so my first question is regarding office transform. On the last call we had an update uh that uh we are 47:42 47 minutes, 42 seconds expanding into new segment of clients like retail, hospitality and others as well. So could you share an update on how it is working out for us and uh out 47:51 47 minutes, 51 seconds of the pipeline that you mentioned how much should do these segments contribute? 47:58 47 minutes, 58 seconds Sure. So uh I don't think we said that we would you know immediately you know move into these categories. The majority 48:06 48 minutes, 6 seconds of the focus for us is on commercial workplace interiors which we have done um in the last four years since the 48:13 48 minutes, 13 seconds business has been uh kind of incepted has primarily focused on commercial workplace interiors. The plan was not to 48:21 48 minutes, 21 seconds immediately go into these new segments but as we subsidiarize this business the idea was that this would give the leadership of that business the opportunity to expand into those 48:30 48 minutes, 30 seconds avenues. Today almost I would say 95% of the business comes from commercial workplace interiors. Even the pipeline that I mentioned earlier of almost 8 48:38 48 minutes, 38 seconds lakh square feet 100% of that is in basically from commercial uh workplace opportunities. Obviously the sectors are 48:46 48 minutes, 46 seconds diverse they are across industrial chemicals across ITIT across BO etc. But clearly uh currently the business does 48:54 48 minutes, 54 seconds not uh do any major uh I would say non-commercial workplace interior. We do a little bit of uh educational spaces 49:03 49 minutes, 3 seconds that we have recently started but that's about only 5%. Rest of the segments is negligible. These will develop over the 49:10 49 minutes, 10 seconds next 2 to three years. Today we have a market leadership in ITIT uh and BO etc. 49:16 49 minutes, 16 seconds uh these kind of service offerings especially under 100,000 square foot areas. We want to make sure that we continue to have a market leadership position in that space and then 49:25 49 minutes, 25 seconds obviously once we have established that then expand into the other categories. 49:32 49 minutes, 32 seconds Yeah, understood. Uh thanks for the clarification and uh so my next question is regarding the investment that we made for a furniture capacity. So we made a 7 49:41 49 minutes, 41 seconds to 10 cr investment, right? And uh do we have any update on the same? So what is the revenue potential here that we're looking at apart from captive consumption? 49:52 49 minutes, 52 seconds So we have not made uh any investment into the furniture manufacturing. 49:57 49 minutes, 57 seconds Currently all the manufacturing is through contract manufacturing. So there's almost negligible investment uh that has gone there actually no c zero 50:06 50 minutes, 6 seconds capital investment and there's very negligible investment that has gone into the furniture business. Uh we will in the fourth quarter be able to give a 50:14 50 minutes, 14 seconds more clear guidance for the furniture business which currently is in a very nent stage but we have not invested anything uh in in that business at all. 50:24 50 minutes, 24 seconds Understood sir. One last question. So what is our uh refurbishment capex cycle looking like? So how many years do we 50:31 50 minutes, 31 seconds wait until uh we renovate the property and uh what is the capex per square feet for refurbishment? Yeah. 50:40 50 minutes, 40 seconds So typically if you look at our centers the average tenure of a center is between 9 to 10 years. At a 5year mark 50:47 50 minutes, 47 seconds we believe that at that mark the center requires probably 15 to 20% of investment to refresh it for another 5 50:54 50 minutes, 54 seconds years. Essentially every month we have what we call a repair and maintenance. 50:59 50 minutes, 59 seconds Depends on the center age etc. But it's basically enough for us to keep the center fresh for the first 5 years with 51:07 51 minutes, 7 seconds that minimum investment that happens as part of the operating expense every month. Essentially at the 5year mark uh 51:14 51 minutes, 14 seconds there could be one or two things. One uh we could obviously continue in that center. Sometimes we decide not to continue but ideally 80 to 85% of 51:23 51 minutes, 23 seconds centers we look at a 10ear tenure. In that situation at the 5 year mark we do a 15 20% refurbishment. 51:32 51 minutes, 32 seconds Understood sir. That's it from myself. Thank you. Thank you. 51:39 51 minutes, 39 seconds The next question is from the line of Adita Sharma from Shakara Investments. Please go ahead. Uh hi sir, thanks for the opportunity. 51:48 51 minutes, 48 seconds Uh uh trying to understand the reasons why uh we reduced the guidance from 40,000 ft to 32,000. Uh so one of the 51:55 51 minutes, 55 seconds reasons you highlighted was basically we're trying to go slow uh in the larger uh seat format uh the 500 seater. So is 52:05 52 minutes, 5 seconds the understanding uh that the understanding that we're trying to maintain a mix uh so around 500 seater plus is currently around 35 uh 36 odd%. 52:14 52 minutes, 14 seconds So we are we trying to maintain a mix which is uh leading to a lower seat addition. 52:21 52 minutes, 21 seconds So uh so I'll u explain and clarify it a bit. Uh we we we are not averse to signing up uh 500 plus seater clients. 52:32 52 minutes, 32 seconds Uh but as a business model uh when we sign up a speculative center. So let's define a center where we don't have a 52:39 52 minutes, 39 seconds demand day one. These centers we prefer to sign up generally at 30,000 to 40,000 square ft uh kind of size unlike uh or 52:49 52 minutes, 49 seconds uh and not uh very large kind of centers like 100,000 or 200,000 square ft where the seat sizes would almost be you know 52:56 52 minutes, 56 seconds two and a half to uh four four times of that. Uh so by default uh we would uh we 53:03 53 minutes, 3 seconds look forward to uh more uh number of sites to be selected, more uh number of you know cities to be covered, more 53:10 53 minutes, 10 seconds number of micro markets to be covered because we love setting up a larger network. Uh by nature of this uh when we 53:18 53 minutes, 18 seconds sign up uh these midsize centers uh we get a mixed cohort. So our typical center gets cohort of you know one or 53:27 53 minutes, 27 seconds two customers of 200 plus one or two or three of 100 to 200 uh and lot between 1 to 100 seater cohorts. Uh uh we love 53:37 53 minutes, 37 seconds doing this site because uh the uh the diversity of clients, the diversity of supply, the diversity of buildings, the 53:45 53 minutes, 45 seconds diversity of locations uh ensure that uh we are able to uh run through any kind of macro headwinds for 10 to 12 year uh 53:54 53 minutes, 54 seconds period in that center. Second u if you look at uh uh the the other big advantage what we see is uh we have a 54:03 54 minutes, 3 seconds clear market leadership in one to 100 seater cohort which ends up uh yielding better price realizations for us as 54:11 54 minutes, 11 seconds compared to larger cohorts and which yields uh you know so that's the kind of you know uh business we do now uh this 54:20 54 minutes, 20 seconds is a typical co-working business for lot of GCC's and large strategic u clients uh clients 54:29 54 minutes, 29 seconds like uh which we have disclosed earlier as well like national stock exchange and couple of GCC's we have set up centers 54:36 54 minutes, 36 seconds which are much larger uh which are dedicated to them uh and they are in in the 500 plus or a thousand plus uh 54:44 54 minutes, 44 seconds seater uh cohort and we continue to do it but we uh do it in a more strategic uh kind of manner. uh what we see as a 54:52 54 minutes, 52 seconds risk is if we grow a business very uh uh very large kind of dedicated centers for 55:00 55 minutes u uh these larger cohorts. The challenge is that after uh their lockin period ends which could range from 36 months to 55:07 55 minutes, 7 seconds 60 odd months. These centers are very very customized only to that client's uh requirement and uh the occupancy buildup 55:16 55 minutes, 16 seconds at that point of time uh could have a negative impact on the P&L. Second, the refurbishment cost would end up being uh 55:23 55 minutes, 23 seconds a bit more. So there we are a bit more strategic and a bit more uh conservative for doing backtoback businesses. Uh but 55:31 55 minutes, 31 seconds this uh we are doing very seriously and very uh aggressively for first time GCC's. If you would uh refer to our 55:39 55 minutes, 39 seconds presentation this time we had also given uh uh two case studies on how we are growing uh the this segment of business which in our industry is called managed 55:47 55 minutes, 47 seconds office. uh with respect to the first time GCC's uh yeah yeah yeah yeah yeah got it just 55:56 55 minutes, 56 seconds just if you could touch on that point how are you strategic in the sense like how do we circumvent these risk that you highlighted in the time with GC yeah 56:06 56 minutes, 6 seconds thank you so one with we are strategic in a manner that we are very uh u we we select the 56:14 56 minutes, 14 seconds customers with which we whom we work and provide more larger kind of uh you know projects dedicatedly so for for whom we are setting up larger kind of contracts. 56:25 56 minutes, 25 seconds So these are either these strategic clients with whom we have worked across multiple centers. So like one of the IT 56:31 56 minutes, 31 seconds majors uh we have probably uh delivered almost about 500,000 plus square ft for them across five to six different 56:40 56 minutes, 40 seconds locations. So tomorrow if they come back to us and they want us to even set up a 100,000 square feet center we are very uh clear because we are aligned with the 56:48 56 minutes, 48 seconds teams we know the their uh their teams well we know their strategy well and we feel comfortable that they would be there with us for a long time. So uh so 56:57 56 minutes, 57 seconds these are a group of almost about 15 to 18 different uh large occupiers with whom we work. Second uh or you know case 57:05 57 minutes, 5 seconds in point a company like national stock exchange with now whom we have a relationship across four plus centers. 57:11 57 minutes, 11 seconds Second uh the segment of customers which is helping us grow this managed office business is the first time GCC's. There 57:17 57 minutes, 17 seconds we see a very strong stickiness uh which comes across with these uh GCCs. For them a flex operator uh is the preferred 57:26 57 minutes, 26 seconds choice because uh they are looking at uh us for uh we add significant value for them in terms of execution of space, 57:35 57 minutes, 35 seconds finding the space and uh running the space and they want preferably one single player to run and manage the 57:41 57 minutes, 41 seconds whole thing. Uh and we also and they end up giving a more longer kind of you know lockins to us. 57:50 57 minutes, 50 seconds Got it. Thank you. 57:57 57 minutes, 57 seconds Thank you ladies and gentlemen. Due to time constraint we are taking it as a last question. I would now hand the conference over to the management for the closing comments. Over to you sir. 58:16 58 minutes, 16 seconds So we thank everyone for joining the call today. We hope we have been able to give you a detailed overview of our business and answer your queries. Should 58:24 58 minutes, 24 seconds you have further queries or clarifications, please feel free to reach out to SGAA, our investor relation advisers. Thank you. 58:34 58 minutes, 34 seconds Thank you. On behalf of Ambed Capital Private Limited, that concludes this conference. Thank you for joining us and you may now disconnect our lines. Thank you.