Awfis Space Solutions Limited — Q4 FY26

Awfis Space Solutions Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=ZquG0MxcXm4 Published: 3 weeks ago

0:00 Ladies and gentlemen, good day and welcome to the Office Space Solutions Limited Q4 FY26 earnings conference call hosted by Asian Market Securities. 0:11 11 seconds As a reminder, all participant lines will be in the listenon mode and there will be an opportunity for you to ask questions after the presentation concludes. 0:20 20 seconds Should you need assistance during this conference, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. 0:31 31 seconds This conference call may contain forward-looking statements about the company which are based on the beliefs, opinions, and expectations of the company as on the date of this call. 0:40 40 seconds These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. 0:48 48 seconds I now hand the conference over to Mr. 0:50 50 seconds Vikrant Kashab from Asian Market Securities. Thank you and over to you Mr. Kashab. Thank you. Good evening 0:58 58 seconds everyone. On behalf of HL Market Securities, we welcome you to the Q4 FI 26 earnings conference call of Office 1:05 1 minute, 5 seconds Space Solutions. Today we have from the management team, Mr. Amit Ramani, chairman and MD, Mr. Sumit Lakhani, CEO 1:13 1 minute, 13 seconds and Mr. Sumit Rojlani, CFO. I now hand over the call to Mr. Amit Ramani for his opening remarks. Thank you and over to you sir. 1:22 1 minute, 22 seconds Thank you. Thank you and good evening everyone. A very warm welcome to all of you joining us on the call today. I'm joined by Mr. Sumit Bahani our CEO, Mr. 1:32 1 minute, 32 seconds Sumit Rashani, our chief financial officer and our investor relations advisor from SGA. 1:39 1 minute, 39 seconds Our Q4 and FI26 result presentation has been uploaded on the stock exchanges and I hope you have had a chance to review 1:46 1 minute, 46 seconds it. FI26 has been a defining year for office. It was a year marked by strong execution, deeper enterprise adoption, 1:55 1 minute, 55 seconds sharper premiumization of the network and disciplined capital deployment. More importantly, it has been a year where 2:02 2 minutes, 2 seconds the office platform has demonstrated that scale, profitability, and industry-leading returns on capital can 2:10 2 minutes, 10 seconds all be delivered together consistently and at pace. 2:14 2 minutes, 14 seconds Before I get into our performance, I want to spend a moment on the broader landscape because the structural backdrop today is exceptionally 2:22 2 minutes, 22 seconds supportive of what we have been building. India's commercial real estate market is one of the strongest phases. 2:30 2 minutes, 30 seconds PY 2025 saw record office leasing of 82.6 million square ft. the third 2:37 2 minutes, 37 seconds consecutive record year with new grade A supply completions also reaching a peak of 58.9 million square feet. The 2:45 2 minutes, 45 seconds momentum has carried into CY 2026 with Q1 recording 21.9 million square ft of 2:52 2 minutes, 52 seconds gross leasing, a 13% increase yearonear despite a noisy global environment. 3:00 3 minutes GCC continues to lead the charge now according to according for over 40% of 3:06 3 minutes, 6 seconds total CR leasing while flexible workspace operators contributed nearly 23% of the leasing activity 3:15 3 minutes, 15 seconds demand from premium gradea assets is strengthening across the top micro market the flex segment itself has grown 3:23 3 minutes, 23 seconds eightfold over the past 8 years with penetration rising from 5% to 21% % and 3:30 3 minutes, 30 seconds expected to reach 25% by 2027 per leading industry estimates. 3:36 3 minutes, 36 seconds Flexible workspace stock has grown roughly 3.5 times since 2020 and continues to grow at a rapid pace. The 3:45 3 minutes, 45 seconds shift from real estate as a costline to workplace as a managed business outcome is no longer a thesis. It is now visible 3:53 3 minutes, 53 seconds in the numbers. Two forces are amplifying this further. The AI wave is reshaping how global enterprises view 4:00 4 minutes India as a true innovation and product development hub rather than just a cost destination driving GCP mandates that are larger, longer and more premium. 4:13 4 minutes, 13 seconds India's GCC ecosystem has now crossed 2,100 GCC's generating nearly hundred billion in revenue with over 500 new 4:22 4 minutes, 22 seconds GCC's and thousand new units established in the last 5 years alone. 4:27 4 minutes, 27 seconds More than 1200 of these GCC's now have active AI and AMML capabilities and India ranks number one globally in AI hiring intensity across GCC markets. 4:40 4 minutes, 40 seconds What is particularly significant is the pace of maturation. 48% of India's GCC 4:47 4 minutes, 47 seconds now operate at portfolio or transformation of maturity up from 42% just a few years ago and 26% of new 4:56 4 minutes, 56 seconds GCC's are react reaching portfolio stage within 5 years. A journey that has historically took a decade. At the same 5:05 5 minutes, 5 seconds time, Indian IT services companies are returning with larger workspace mandates as cost parity narrows and AIEL delivery 5:14 5 minutes, 14 seconds models scale up. Both forces play directly to our strength across GCC, managed office and even the core team 5:21 5 minutes, 21 seconds segment where AI native startups and distributed teams are driving incremental demand. Again this backdrop 5:29 5 minutes, 29 seconds office delivered a strong Q4 and are defining fully year performance for FY26 revenue from operation grew 24% 5:38 5 minutes, 38 seconds yearonear to 1493 crores with our co-working and allied services segment 5:44 5 minutes, 44 seconds growing 35% to 1237 crores a meaningful acceleration over the previous year to put that in context this segment alone 5:53 5 minutes, 53 seconds added 321 crores of incremental revenue during the year operating ing AIDA grew 5:59 5 minutes, 59 seconds 37% yearonear to 550 crores with margins expanding to 37 36.8%. 6:06 6 minutes, 6 seconds This expansion is the cumulative outcome of several things working in our favor at once. Deeper enterprise demand 6:14 6 minutes, 14 seconds operating leverage as the network matures. The premiumization mix shift and the rising contribution of mature 6:21 6 minutes, 21 seconds centers flowing through at full economics bad before exceptional item grew 66% to 6:29 6 minutes, 29 seconds 71 crores reflecting the underlying earning quality of the platform. We continue to operate at industry-leading 6:37 6 minutes, 37 seconds capital efficiency with Rosi sustaining at 60% plus and maintained at a next black position through the year. 6:45 6 minutes, 45 seconds Let me now turn to strategic themes that defined FI26 and that will continue to shape FI27 and beyond. We see five 6:55 6 minutes, 55 seconds engines driving the next phase of our growth and I will walk you through each of them. The first one is engine is 7:02 7 minutes, 2 seconds premiumization at scale. Premiumization has now become defaulted profit not a strategy overlay. Every new center 7:09 7 minutes, 9 seconds signed during the year was in a grade A A+ asset. top demand micro markets that standard now and is a non-negotiable. 7:18 7 minutes, 18 seconds Nearly 60% of our new supply signed during the year was with institutional landlords. A significant step up in our 7:26 7 minutes, 26 seconds partnership with India's marquee developer ecosystem. 7:29 7 minutes, 29 seconds These institutional assets are increasingly the natural home for gold and elite formats which continue to see 7:37 7 minutes, 37 seconds disapproportionate traction from enterprise and GCC clients. We closed FY26 with 35 golden elite centers across 7:47 7 minutes, 47 seconds EGCC's enterprise hubs in India and the premium footprint continues to scale. 7:52 7 minutes, 52 seconds The average size of a center signed across FY 25 and 26 take approximately 20% larger than our legacy portfolio 8:02 8 minutes, 2 seconds reflecting our deliberate shift towards enterprise ready formats which are better aligned with GCC and managed office mandates. 8:10 8 minutes, 10 seconds We also became the first co-working brand in India to achieve three 12 certifications simultaneously across 8:17 8 minutes, 17 seconds health and safety, equity and co-working trading. A meaningful differentiator at GCC and large enterprising increasingly 8:25 8 minutes, 25 seconds evaluate workspace partners on wellness and compliance credentials. 8:30 8 minutes, 30 seconds Premiumization is translated into structurally 8:39 8 minutes, 39 seconds Uh sorry to interrupt sir but uh you are not audible at this moment if you are speaking. 8:45 8 minutes, 45 seconds Ladies and gentlemen, the line to the management seems to have disconnected. 8:48 8 minutes, 48 seconds Please stay with us while we reconnect with the management. [music] 8:56 8 minutes, 56 seconds [music] 9:02 9 minutes, 2 seconds [music] 9:06 9 minutes, 6 seconds [music] 9:12 9 minutes, 12 seconds [music] 9:18 9 minutes, 18 seconds [music] 9:21 9 minutes, 21 seconds Doo doo doo doo. 9:27 9 minutes, 27 seconds [music] 9:35 9 minutes, 35 seconds [music] 9:40 9 minutes, 40 seconds I know. I [music] know. 9:52 9 minutes, 52 seconds [music] 10:00 10 minutes [music] 10:10 10 minutes, 10 seconds [music] 10:15 10 minutes, 15 seconds [music] 10:20 10 minutes, 20 seconds Ladies and gentlemen, we thank you for your patience. We have reconnected with the management. Over to you sir. 10:27 10 minutes, 27 seconds Sorry we got disconnected because some technology glitch. Uh I will just repeat a few five seconds. I believe that we might have lost. We closed FI26 with 35 10:36 10 minutes, 36 seconds golden elite centers across key GCCs and enterprise hubs in India and the premium footprint continues to scale. The average size of a center across SI 25 10:46 10 minutes, 46 seconds and 26 is 20% larger than our legacy portfolio reflecting our deliberate shift toward enterprise ready formats 10:53 10 minutes, 53 seconds better aligned with GCP and managed office mandate. We also became the first co-working brand in India to achieve 11:00 11 minutes three well certification simultly across health and safety equity and co-working ratings. A meaningful differentiator at 11:08 11 minutes, 8 seconds GCC and large enterprises increasingly evaluate workspace partners on wellness and compliance credentials. 11:15 11 minutes, 15 seconds Premiumization is translating infrastructure, better realization, stronger pricing power, longer client tenure and a meaningfully higher quality 11:23 11 minutes, 23 seconds of revenue. The full financial benefit of this shift is still ahead of us and as 26 cohort of premium centers mature 11:31 11 minutes, 31 seconds into steady state economics, they are designed to deliver. The second engine is multiformat supply. Right. Supply strategy today operates across four 11:41 11 minutes, 41 seconds distinct pillars and I want to walk you through each briefly. The first is the revamped managed aggregation region. We are increasingly using forward leasing 11:49 11 minutes, 49 seconds as a strategic tool locking in grade A plus assets in high demand micro markets well before they are ready for fit out. 11:57 11 minutes, 57 seconds We have already pre-committed over four lakh square feet under our MA model through Q2 F528. We are forward pleasing 12:05 12 minutes, 5 seconds securing grade A+ supply and with capital light assets in advance. The next evolution of this is developer 12:13 12 minutes, 13 seconds partnership model. We are in advanced discussions with two market institutional developers for structured partnership built around shared capex 12:21 12 minutes, 21 seconds premium grade A plus assets and office managing the end-to-end operations. 12:28 12 minutes, 28 seconds For us, this means premium supply at materially lower net capital intensity 12:34 12 minutes, 34 seconds and sharper roty compounding. We expect these partnerships to become a meaningful supply pillar in FY27 and 28. 12:44 12 minutes, 44 seconds The second is the next wave of enterprise supply anchored by two formats. Partial managed office in demand side innovation where office 12:53 12 minutes, 53 seconds finds the new property where only when 40 to 70% of the seats are already anchored by the enterprise or GPC client at the time of signing. 13:03 13 minutes, 3 seconds The balance is filled through co-working giving us anchor economics from day one and yield upside of flex inventory as 13:11 13 minutes, 11 seconds central fill. We have already a few partial MO centers share start started to go live soon with marquee and per 13:19 13 minutes, 19 seconds client secured across Pune Mumbai Bangalore at the time of signing itself. 13:24 13 minutes, 24 seconds Alongside this premium managed office mandates from Fortune 500 GP client are driving large long tenure high 13:32 13 minutes, 32 seconds realization requirements that add clearly visibility to our pipeline. The third is disciplined risk mitigated 13:39 13 minutes, 39 seconds supply acquisition. Our supply portfolio is built to perform a cost cycle. Every deal goes through an asset liability 13:47 13 minutes, 47 seconds mismatch validation before signing and we are locking in flagship and construction assets only where we have prevalidated demand and a return signal. 13:57 13 minutes, 57 seconds We are also increasing the finding supply with a forward view securing the best assets and building a 14:05 14 minutes, 5 seconds pipeline that is resilient regardless of where the C ft moves. And the fourth is premium by design. 100% of new supply is 14:14 14 minutes, 14 seconds in grade 8 to A+ asset. We now have 35 gold and elite centers growing with a deepening phys 14:23 14 minutes, 23 seconds institutional landlord. The premium filter is non-negotiable and is what drives the realization trajectory we are building towards. The third engine is 14:32 14 minutes, 32 seconds GCC structural demand engine. GCC demand in India is no longer a cyclical theme. 14:38 14 minutes, 38 seconds It is structural multi-year tailwind and it is accelerating. India continues to hire 20 to 30 first time GCPs every 14:46 14 minutes, 46 seconds quarter and the mid-market segment which is our primary area remains the fast growing and most 14:54 14 minutes, 54 seconds underpenetrated GCC category in India today. 15:08 15 minutes, 8 seconds Pardon me sir. This is the operator. We are not able to hear you at the moment. 15:14 15 minutes, 14 seconds Ladies and gentlemen, please stay with us. The man blind seems to have disconnected. 15:19 15 minutes, 19 seconds [music] 15:24 15 minutes, 24 seconds [music] 15:30 15 minutes, 30 seconds [music] 15:35 15 minutes, 35 seconds [music] 15:40 15 minutes, 40 seconds [music] 15:46 15 minutes, 46 seconds [music] 15:46 15 minutes, 46 seconds Down. [music] Hey. 15:57 15 minutes, 57 seconds [music] 16:02 16 minutes, 2 seconds Baby, 16:05 16 minutes, 5 seconds [music] 16:08 16 minutes, 8 seconds baby. 16:11 16 minutes, 11 seconds [music] 16:15 16 minutes, 15 seconds [music] 16:20 16 minutes, 20 seconds [music] 16:25 16 minutes, 25 seconds [music] 16:31 16 minutes, 31 seconds [music] 16:38 16 minutes, 38 seconds [music] 16:43 16 minutes, 43 seconds [music] 16:48 16 minutes, 48 seconds Mountain 16:50 16 minutes, 50 seconds [music] 16:56 16 minutes, 56 seconds [music] 17:02 17 minutes, 2 seconds [music] 17:12 17 minutes, 12 seconds Louder. 17:14 17 minutes, 14 seconds [music] 17:21 17 minutes, 21 seconds [music] 17:26 17 minutes, 26 seconds [music] 17:26 17 minutes, 26 seconds Heat. Heat. 17:31 17 minutes, 31 seconds [music] 17:38 17 minutes, 38 seconds [music] 17:44 17 minutes, 44 seconds [music] 17:52 17 minutes, 52 seconds [music] 18:00 18 minutes [music] 18:05 18 minutes, 5 seconds Ladies and gentlemen, Thank you for your patience. We have now reconnected with the management. Over to you sir. 18:11 18 minutes, 11 seconds Thank you and apologies again. There's some technology glitch happening. I'll just continue from here. The fourth engine for our organic growth which is 18:18 18 minutes, 18 seconds often underappreciated is conversations about our business but is of the most powerful compounding levers we have. Our 18:26 18 minutes, 26 seconds existing network itself is a growth engine. Renewals and seat expansion within existing clients are deepening every quarter and the multic-enter 18:35 18 minutes, 35 seconds client base which today accounts for 48% of our total clients. This continues to grow as enterprises consolidated their 18:42 18 minutes, 42 seconds plan in their workspace requirements with office. To give you a sense of demand velocity, we sold over 58,000 seats across the platform in FY26. What 18:52 18 minutes, 52 seconds makes the compounding particularly powerful is the butterfly effect within our client base. A client entering through co-working often expands into 19:00 19 minutes managed office and then into full design and build mandate through office transform. This is not a sales motion. 19:06 19 minutes, 6 seconds It is a natural progression that plays out every quarter. The fifth engine is the value beyond flex. The set of 19:13 19 minutes, 13 seconds agencies that compound off our core platform. Let me start with office transform a design and build business. 19:19 19 minutes, 19 seconds FY26 was a softer year on overall DN D D D D D D D D D D D D D D D D D D D D D D D D D D D D D D D D D D D D D D D DB revenue driven by project timing and lower count of managed aggregation 19:26 19 minutes, 26 seconds deals, but the structural shift in the business is the real story. Third party revenue, our external client work 19:33 19 minutes, 33 seconds outside of office centers grew from 95 crores in FY25 to 152 crores in FY26, a 19:40 19 minutes, 40 seconds 27% kagger over two years. Third party share has moved from 47 to 59% and the average ticket size has nearly doubled. 19:50 19 minutes, 50 seconds We closed five orders about 10 crores in FI26 compared to just one in FI 24 and 25 and 17 orders above 5 crores in FI26 versus 11 in prior two years combined. 20:03 20 minutes, 3 seconds Transform is now delivering across sectors as diverse as BFSI, pharmaceuticals, telecom, industrial, 20:10 20 minutes, 10 seconds consulting and aviation. And we expect executed projects over across 20 plus cities in FI26 alone. The pipeline going 20:19 20 minutes, 19 seconds into FI27 is materially stronger within the one with 130 kores of mandates already won in delivery across the next 20:28 20 minutes, 28 seconds 6 to 7 months. This is no longer a support function. It is a standalone business with its own client relationships, its own capability stack 20:37 20 minutes, 37 seconds and its own compounding pipeline. The cross-ell flywheel is one of the most powerful aspects of this business. 80% 20:45 20 minutes, 45 seconds of our external DNB revenue comes from our flex clients and it works the other way too. Transform clients are now anchoring future flex and managed office 20:54 20 minutes, 54 seconds demand back into the office network. We have also been building frame by office furniture business over the last few quarters. 21:03 21 minutes, 3 seconds The approach is deliberately capit slide rather than building own manufacturing infrastructure. We have assembled a contract manufacturing setup across five 21:12 21 minutes, 12 seconds plus partners covering all major furniture categories giving us quality control and scalability without the capital commitment. The majority of our 21:21 21 minutes, 21 seconds new co-working centers will have frame furniture deployed by H1 making it the default for our own center rollouts. 21:30 21 minutes, 30 seconds Beyond that 30 to 40% of our DMB deployments are now integrating frame through our existing transform pipeline. 21:37 21 minutes, 37 seconds And by H2 we expect to have two three large external mandates closed with corporate clients where we are not engaged in flex or DNB relationship 21:46 21 minutes, 46 seconds which is the first proof point of frame as a standalone revenue channel. FI27 will be a year of building this vertical with quality discipline and right unit economics before we accelerate further. 21:58 21 minutes, 58 seconds Allied services across IT, FNB, transport, business support continue to scale rapidly with attach with with 22:06 22 minutes, 6 seconds rates increasing at our enterprise and GCC mix deepens. 22:11 22 minutes, 11 seconds Each of these is a high margin layer on top of our core seat economics and a meaningful differentiator after compound wallet shares per client over time. 22:24 22 minutes, 24 seconds Taken together, these five engines, premiumization, multiformat, GCC, demand, organic growth and adjacencies 22:32 22 minutes, 32 seconds are not separate initiatives. They reinforce each other. A premium center attracts a GCC client. A GCC client 22:38 22 minutes, 38 seconds multicenters into our network and absorbs allied services. A managed office mandate converts into transform 22:45 22 minutes, 45 seconds engagement. And each of these makes the new partial MO or developer partnership easier to sign. This is the compounding flywheel we have been building towards 22:54 22 minutes, 54 seconds and FI26 since the year it was it has visibly started turning. Before I close a word on FI26 guidance our co-working 23:04 23 minutes, 4 seconds and allied services segment comfortably met both revenue and ADA guidance for the year. Consolidated revenue growth 23:11 23 minutes, 11 seconds was slightly impacted by softness in design segment. The Aida held up strongly which speaks to the operating 23:19 23 minutes, 19 seconds leverage and the earnings quality of the pro platform. To summarize the FI26 has been a defining year for office. We have 23:28 23 minutes, 28 seconds scaled the premium portfolio meaningfully deepened our GCC enterprise base, built our new adjacencies in 23:34 23 minutes, 34 seconds transform and frame, delivered industry leading returns on capital, and stayed net cash through it all. The five 23:43 23 minutes, 43 seconds engines I walked you through are not a plan for tomorrow. They're already in motion. Each one reinforcing the other and each one positioned to compound 23:51 23 minutes, 51 seconds through FY27 and beyond. The business is in the strongest position yet. FYI27 is not about building for the future. It's 23:59 23 minutes, 59 seconds about compounding on every strong present. With that, I would like to hand over the call to Sumit Lakhani, our C 24:07 24 minutes, 7 seconds CEO to walk you through the operational highlights in greater detail. Over to you, Sumit. 24:14 24 minutes, 14 seconds Thank you. And good evening everyone. 24:17 24 minutes, 17 seconds Let me walk you through the operational highlights for Q uh Q4 and FY26 and then let me also pick up on a few items that 24:25 24 minutes, 25 seconds referenced. During FI26, we added nearly 30,000 seats across the network on a gross basis across 41 new centers with 24:34 24 minutes, 34 seconds 100% of new supply in grade A a plus assets. As of March 2026, our total 24:41 24 minutes, 41 seconds supplies stood at 250 centers and approximately 167,000 seats across 18 24:48 24 minutes, 48 seconds cities, while signed supply expanded to 266 centers and approximately 184,000 24:55 24 minutes, 55 seconds seats. [clears throat] Operational capacity today stands at over 156,000 seats. We were highly selective on 25:03 25 minutes, 3 seconds supply this year, focusing only on grade A, A+ buildings, prime micro markets, and centers with strong anchor demand. 25:12 25 minutes, 12 seconds More broadly, our supply additions are now increasingly optimized for revenue per seat rather than headline seat count. 25:20 25 minutes, 20 seconds So while the headline number looks a bit smaller, the underlying economics are materially stronger. Our supply pipeline 25:27 25 minutes, 27 seconds going into FY27 is robust with a meaningful share already secured through signed LOIs and centers under fit out. 25:36 25 minutes, 36 seconds All occupancy next door centers defined as those operating for more than 12 months sustained at approximately 84%. 25:44 25 minutes, 44 seconds While the blended occupancy of stood at 76%. 25:48 25 minutes, 48 seconds To put that trajectory in context, over the last four quarters, we have moved blended occupancy up by 300 basis points 25:55 25 minutes, 55 seconds on an average seat base of over 145,000 seats, which is a meaningful lift at this scale. We are also increasingly 26:04 26 minutes, 4 seconds anchoring new client additions on pre-committed demand either through full or partial manage office arrangements 26:11 26 minutes, 11 seconds before setting up a center. What that means is new centers are coming online with a higher starting occupancy than 26:18 26 minutes, 18 seconds has historically been the case which structurally reduces the drag from new additions on blended numbers. 26:26 26 minutes, 26 seconds Demand quality has continued to deepen meaningfully. Enterprise and MNC clients now account for 64% of our client base. 26:35 26 minutes, 35 seconds Average client tenure has trended to 37 months with lock in tenure at 26 months. 26:41 26 minutes, 41 seconds both of which reinforce the durability and predictability of our revenue base. 26:46 26 minutes, 46 seconds The 500 plus seat cohort which is the most premium and stickiest segment of our portfolio now represents 37% of our 26:53 26 minutes, 53 seconds overall portfolio mix. Multic-enter client penetration is one of the strongest signals of platform value in 27:00 27 minutes our business. Today 48% of our client base operates across multiple office centers and depth here is accelerating. 27:09 27 minutes, 9 seconds Clients operating in three or more centers now account for 31% of our seats up 300 basis point water and water. 27:17 27 minutes, 17 seconds Those in five or more centers account for 18% also up 300 basis points and the share of clients operating across 10 or 27:26 27 minutes, 26 seconds more centers has risen by 600 basis points quarter on quarter. When a client expands from one center to multiple 27:33 27 minutes, 33 seconds centers across cities, they are not just union contract. they are choosing office as their national operating partner. 27:41 27 minutes, 41 seconds What is also worth highlighting is the highlight uh is the density we have built within the key micro markets. We have a strong and deep presence across 27:50 27 minutes, 50 seconds the most important micro markets in every major tier one city with multiple format types colllocated in the same 27:57 27 minutes, 57 seconds catchment serving startups, corporates and GCC's simultaneously like for example outer ring road in 28:05 28 minutes, 5 seconds Bangalore alone houses 12 of our centers offering the full format stack from value gold elite to office 6.0 control 28:14 28 minutes, 14 seconds and manage office within a single micro market. 28:18 28 minutes, 18 seconds BPC in Mumbai houses five centers serving BFSI, GCC's and startups in India's most premium address. This 28:26 28 minutes, 26 seconds clustering creates network effects that are very difficult to replicate. Each new center strengthens the network. 28:33 28 minutes, 33 seconds Vacancy risk drops as the catchment deepens. Wallet capture per client increases and shared operational 28:40 28 minutes, 40 seconds infrastructure across clustered centers rise lower operating expense and higher margins over time. Our diversified 28:48 28 minutes, 48 seconds client mix remains one of our strongest structural differentiator. We continue to serve across enterprise clients 28:55 28 minutes, 55 seconds startups and mobility users each through differentiated formats and solutions. 29:01 29 minutes, 1 second This breadth gives us occupancy velocity at the entry end and the scability at the enterprise end and the funnel of 29:08 29 minutes, 8 seconds clients who scale from one to another over time. 29:12 29 minutes, 12 seconds Our GCC business has continued to scale meaningfully. Before I get into the office specific metrics, it is worth 29:19 29 minutes, 19 seconds noting the broader landscape. India's GCC ecosystem has now crossed 2100 GCC's operating across 3,700 plus units with 29:29 29 minutes, 29 seconds the mid-market segment which is our primary focus area remaining the most under penetrated relative to its corporate base. Over 100 new GCCs were 29:38 29 minutes, 38 seconds established in India and FI26 alone per the latest industry data and the tailwind from AI adoption is driving both new entrance and the expansion of 29:47 29 minutes, 47 seconds existing GCC's at a pace we have not seen before. Twothirds of new GCC's continue to choose Bangalore and 29:54 29 minutes, 54 seconds Hyderabad as their primary location. But emerging hubs are also gaining traction and our 18 city presence across tier 1 30:02 30 minutes, 2 seconds and tier 2 markets with a network to serve these clients wherever they choose to set up. Within this landscape, office 30:09 30 minutes, 9 seconds now serves 100 plus unique GCC clients across nine cities, contributing approximately 23% of our rental 30:18 30 minutes, 18 seconds revenues. We closed 14 major GCP mandates in FY 2026 with six already committed for FY 27 and another seven in 30:27 30 minutes, 27 seconds advanced stages of discussion. The momentum here is real and visible. Our strategic focus as Amit mentioned is the 30:35 30 minutes, 35 seconds mid-market GCC clients typically entering with 25 to 200 seats and scaling rapidly across multiple cities. 30:42 30 minutes, 42 seconds The GCC client life cycle within office follows a very predictable pattern. 30:47 30 minutes, 47 seconds Client typically enters at 25 to 50 seats in our co-working or board formats, expand to 100 to 200 seats as 30:55 30 minutes, 55 seconds operations mature, and increasingly take up managed office mandates over time. 31:00 31 minutes This creates long-term revenue visibility, deep stickiness, and rising allied services rates as the relationship grows. 31:09 31 minutes, 9 seconds Each new GCC cohort is materially larger and stickier than the previous one, deepening the compounding effect we see 31:16 31 minutes, 16 seconds across the client base. On the premium portfolio, we close FY26 with 35 gold 31:23 31 minutes, 23 seconds and elite centers comprising 27 gold and 8 elite. And this segment continues to grow as a share of new supply. Our 31:32 31 minutes, 32 seconds premium footprint now covers eight key GCC hubs including all seven tier one cities giving us the right presence in the markets where premium demand 31:40 31 minutes, 40 seconds actually sits. Premium centers are increasingly the front door for enterprise conversions. Large managed 31:47 31 minutes, 47 seconds office mandates and higher allied services attachment. They also command structurally higher realizations and as 31:55 31 minutes, 55 seconds this cohort matures further through FI27 the realization and margin contribution will continue to flow through. A quick 32:03 32 minutes, 3 seconds word on the three adjacency Amit referenced earlier on office transform. 32:08 32 minutes, 8 seconds Amit walks you through the structural shift in the business the third party revenue trajectory and FI27 pipeline. 32:14 32 minutes, 14 seconds From an operation standpoint I would add that transform is increasingly becoming a national multis sector platform. The 32:21 32 minutes, 21 seconds flywheel between our flex business and transform continues to strengthen and we see this as a meaningful driver of our client revenue going forward. 32:31 32 minutes, 31 seconds On frame by office we have built the foundations through FI26. The team is in place. The contract manufacturing setup is operational across five plus partners 32:39 32 minutes, 39 seconds and FI27 will be year of deliberate build for this vertical. 32:43 32 minutes, 43 seconds Allied services across IT, FNB, transport and business support. continue to scale JD as a high margin layer over our core seat economics. 32:56 32 minutes, 56 seconds Before I close, one important point on our co-working business. Co-working is sometimes overshadowed in conversations 33:02 33 minutes, 2 seconds about enterprise and GCC growth, but it remains one of our deepest structural advantages. office is the only scaled 33:10 33 minutes, 10 seconds flex operator in India with with a genuinely deep and diversified presence across the small and midsite cohort u of 33:19 33 minutes, 19 seconds co-working segment from single seat users to 100 plus seat clients. What is particularly interesting is that around 33:26 33 minutes, 26 seconds half of our sub 100 seat clients are large enterprises or MNC clients. Even 33:33 33 minutes, 33 seconds at entry point scale we are attacking blue chip demand not just filling seats. 33:41 33 minutes, 41 seconds This is a highly operations in intensive business and with meaningful entry barriers built over more than a decade 33:48 33 minutes, 48 seconds of execution technology integration operation depth and network scale. It is also the segment that creates the funnel 33:55 33 minutes, 55 seconds for everything else where the network effect begins and a mode that is very little to replicate. Overall, what we 34:02 34 minutes, 2 seconds are seeing across the operational metrics is a network that is maturing well, a client base that is deepening rapidly and a platform that is set up to 34:11 34 minutes, 11 seconds compound. With that, I'll hand over to Sumit Rashani for the financial updates. 34:18 34 minutes, 18 seconds Thank you Summit and good evening everyone. Let me walk you through the financial performance for Q4 and FI26 in 34:25 34 minutes, 25 seconds detail. Starting with the fourth quarter, consolidated revenue from operations for Q4 FI26 stood at 410 34:35 34 minutes, 35 seconds cringing 21% yearon year. 34:39 34 minutes, 39 seconds Within this, our coreworking and allied services segment grew 27% yearonear to 342 crores, continuing the strong momentum we have seen through the year. 34:52 34 minutes, 52 seconds On a sequential basis, this segment grew also grew 6% quarteron quarter, reinforcing the consistent compounding trajectory. 35:01 35 minutes, 1 second Operating AITA for the quarter stood at rupees 152 crores, a 31% increase yearonear with EITA margins expanding to 37%. 35:13 35 minutes, 13 seconds Profit before tax and exceptional items grew 97% to 24 crores and packed for the quarter 35:21 35 minutes, 21 seconds came at came in at rupes 23 crores compared to rups 11 crores in Q425 a growth of 107%. 35:32 35 minutes, 32 seconds Moving on to the full year, consolidated revenue from operations for FI26 35:38 35 minutes, 38 seconds stood at rupees 1493 cror, a 24% increase year on year. A co-working and 35:46 35 minutes, 46 seconds allied services segment grew 35% to 1237 crores adding rupees 321 crores of incremental revenue in a single year. 35:58 35 minutes, 58 seconds To put this in context, rupes 321 crores of incremental CWS revenue in one year. 36:06 36 minutes, 6 seconds Operating AITA grew 37% to 550 crores with AITA margins expanding by approximately 350 basis points to 36.8%. 36:18 36 minutes, 18 seconds PAT before exception item grew 66% yearonear to 71 cross. As a reminder, 36:26 36 minutes, 26 seconds the exceptional gain in FI25 related to her exit from office care business and there are no exception items in FI26 36:35 36 minutes, 35 seconds on a normalized basis adjusted for India 116 and other accounting items. 36:40 36 minutes, 40 seconds Normalized EITA for FI26 stood at 213 crores, a 27% increase yearon year with normalized EITA margins at 14.3%. 36:52 36 minutes, 52 seconds Our balance sheet remains in excellent shape. We maintain a net cash position throughout the year with net debt to 37:02 37 minutes, 2 seconds equity at.20 and gross debt to equity at 09 reinforcing the financial discipline that underpinned our group. 37:13 37 minutes, 13 seconds Cash generated from operations for FI2655 crores. After tax payments, net cash 37:20 37 minutes, 20 seconds from operating activities came in at 616 crores as per India financials on a normalized basis adjusted for lease 37:29 37 minutes, 29 seconds liability outflows. Normalized cash flow from operations was at 216 crores 37:36 37 minutes, 36 seconds reflecting strong cash conversion with operating cash flows to aa of 1.01 01 times 37:44 37 minutes, 44 seconds on returns roy sustained at 60% and annualized roe stood at 17%. 37:51 37 minutes, 51 seconds Just as importantly, our revenue to gross fixed assets ratio came in at 1.5 times which is best in the industry 38:00 38 minutes reflecting the asset productivity advantage of our capital light managed aggregation model. 38:06 38 minutes, 6 seconds on CapeX. Total Cape deployed towards Capeek during FI26 to at approximately 38:13 38 minutes, 13 seconds 28 crores primarily directed towards our gate A+ centers in premium micro markets. 38:21 38 minutes, 21 seconds With that, we conclude our opening remarks and would like to open the floor for questions and answers. 38:29 38 minutes, 29 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone 38:38 38 minutes, 38 seconds telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to please use handsets while asking a question. 38:48 38 minutes, 48 seconds Ladies and gentlemen, we will now wait for a moment while the question ascenders. 38:57 38 minutes, 57 seconds Our first question is from the line of Mulza 39:07 39 minutes, 7 seconds Persia with Kotak Securities. Please go ahead. 39:12 39 minutes, 12 seconds Yeah. Hi, thank you gentlemen. Uh just two or three questions. uh one is uh when you refer to your occupancy 39:20 39 minutes, 20 seconds uh is the base on operational capacity or on the total supply of 167,000 seats. 39:27 39 minutes, 27 seconds Uh so that's first one second what's the margin profile on the DNB business or roughly 250 K of external revenues. Uh 39:37 39 minutes, 37 seconds and the third one was on you know I don't seem to see a revenue to rent kind of a ratio which is you know a lot of 39:46 39 minutes, 46 seconds your peers said sort of reports. So if you could give us some indication on that. 39:54 39 minutes, 54 seconds Hi I'll start answering your question. 39:57 39 minutes, 57 seconds This is so with respect to uh the occupancy we look at uh the occupancy uh calculated on the total operational 40:04 40 minutes, 4 seconds seats. Uh so which in this case would be around 157,000 40:10 40 minutes, 10 seconds uh uh seats. uh with respect to your uh non um 40:23 40 minutes, 23 seconds I'll request to answer that uh the design and build margins are 40:30 40 minutes, 30 seconds close to 7 to 8% and this is the net margins that I'm uh referring to u and the last question you 40:41 40 minutes, 41 seconds yes The revenue to rent ratio for us comes around 2.3. Okay. Okay. Thank you. 40:51 40 minutes, 51 seconds Thank you. 40:53 40 minutes, 53 seconds Our next question is from the line of Yeshua Birani with BB Capital Markets Limited. Please go ahead. 41:02 41 minutes, 2 seconds Hello team. Thank you for taking my question. U will you be able to share what is the operational chargeable area 41:09 41 minutes, 9 seconds as of SQ26 and also the centers assigned to the partial managed office. Are these 41:16 41 minutes, 16 seconds centers also likely to be bigger than the typical office center uh or is it right to assume that from now on the average office center is likely to be bigger across all office. 41:30 41 minutes, 30 seconds So the operational chargeable area we are looking at every uh seat as 50 square ft. So um across various metrics 41:38 41 minutes, 38 seconds of seats which we have given you could directly just multiply by 50 for the area. So that's the standard metrics we have been following over the last couple 41:45 41 minutes, 45 seconds of years. Um in terms of your question around an uh partial managed office centers the primary um uh goal for us is 41:55 41 minutes, 55 seconds to set up centers uh in the range of about 30,000 to 50,000 square ft. 41:59 41 minutes, 59 seconds However, in uh partial managed office centers, we are a bit more agile in terms of if the size of the center 42:07 42 minutes, 7 seconds increases. Uh there are certain discussions where uh we would be looking at signing closer to about uh 65 to 42:14 42 minutes, 14 seconds 70,000 ft centers where the client demand um is ranges from about 40 to 50%. 42:23 42 minutes, 23 seconds Okay, understood. and uh what is the highest sustainable level uh when occupancies can reach within your portfolio and what would drive that improvement. 42:36 42 minutes, 36 seconds Um so primarily uh the overall if you look at the headline uh blended 42:45 42 minutes, 45 seconds number over the last four quarters as I mentioned it has gone up by 300 basis point at a average seat base of about 145,000 42:53 42 minutes, 53 seconds uh the blended figure of 76% it's essentially a function of the large cohort of new centers added during FY26 43:02 43 minutes, 2 seconds still being in the run phase. Uh so as long as we are uh growing at this pace there is uh always going to be some drag 43:09 43 minutes, 9 seconds on blended occupancy. All right on our mature cohort the centers which are operating for more than 12 months we are at uh 84%. 43:20 43 minutes, 20 seconds This is healthy but uh this is also where we believe there's a room to do better uh in FI27. So primarily three 43:28 43 minutes, 28 seconds actionable uh levers over here uh from our side uh more uh deeper GCCs and enterprise penetration across these 43:37 43 minutes, 37 seconds centers. Second what we are aiming for is a longer de uh tenure deals uh into 43:44 43 minutes, 44 seconds uh these uh centers and a uh a straightforward actionable for us is more active renewal and churn management 43:50 43 minutes, 50 seconds across the portfolio. uh broadly in this uh kind of a cohort we would prefer u uh 43:57 43 minutes, 57 seconds that at least we have couple of you know 100 basis point u increase over the next couple of quarters 44:06 44 minutes, 6 seconds and if I could just squeeze in another question with the meaningful improvement uh or growth in your D&D business and a higher proportion of growth centers how 44:15 44 minutes, 15 seconds do you expect a beta margin to trend over the next few years sorry can you repeat that question. 44:24 44 minutes, 24 seconds Um, sure. Uh, with a meaningful growth in your DND business and a higher proportion of the LinkedIn goal centers, 44:31 44 minutes, 31 seconds how do you expect a margins to trend over the next 3 years? 44:37 44 minutes, 37 seconds So uh see fundamentally uh if you look at a broad view of next two to three years uh we think that all the 44:45 44 minutes, 45 seconds interventions which we are making right now with respect to uh moving into the uh whole premiumization uh strategy. We 44:53 44 minutes, 53 seconds think uh we will move into u a serious kind of uptake around on u the margins 44:59 44 minutes, 59 seconds uh going forward and uh a DNB business uh with a good portion of DNB business coming from uh third party uh over the 45:08 45 minutes, 8 seconds course of next two to three years will help contribute uh you know further in uh improving the AIDA margins. 45:17 45 minutes, 17 seconds Understood. Thank you again. Thank you for taking my questions. Thank you. 45:23 45 minutes, 23 seconds Ladies and gentlemen, you are requested to please limit yourselves to two questions only. If you have any further questions, you may rejoin the queue. Our 45:30 45 minutes, 30 seconds next question is from the line of Shamit Ashai with Ambit Capital. Please go ahead. 45:37 45 minutes, 37 seconds Yeah. Hi. Uh thanks for taking my question. So I just wanted to know what would your seat addition for FI27 be and 45:46 45 minutes, 46 seconds what kind of capex number are you looking for in FY27 given that we'll be adding more of uh 45:53 45 minutes, 53 seconds you know gold and elite centers. So uh some elevated capex in 27. 46:03 46 minutes, 3 seconds So uh see perspect uh so the way what we have done in FI26. So we had um um you 46:11 46 minutes, 11 seconds know the FI26 seat edition is reflecting a more of a deliberate choice of quality over quantity. Uh if you looked at we 46:19 46 minutes, 19 seconds were very uh highly selective on supply this year uh focusing only on grade A and A+ building. So we would look at 46:27 46 minutes, 27 seconds following a similar kind of a trend around on um FI 27 as well. Um because 46:34 46 minutes, 34 seconds uh these supply additions the way we are looking at is now increasingly optimized for revenue per seat rather than uh the 46:41 46 minutes, 41 seconds seat count. And um what we expect to do is probably around uh 22 to 25,000 gross 46:48 46 minutes, 48 seconds seats uh translating closer to 100 1.25 million square ft. uh we have a decent 46:55 46 minutes, 55 seconds kind of a pipeline um and u already a significant kind of visibility around on uh achieving uh these seats. In terms of 47:04 47 minutes, 4 seconds the overall capex uh the way we uh are projecting and seeing is it would be um almost on similar lines of FY26 uh across for these seats. 47:16 47 minutes, 16 seconds Got it. Thank you. 47:20 47 minutes, 20 seconds Thank you. Our next question comes from the line of Adita Sharma with Shikra Investments. Please go ahead. 47:28 47 minutes, 28 seconds Yeah. Hi. Uh thanks for the opportunity. 47:31 47 minutes, 31 seconds Uh just trying to understand what happened in this quarter. Uh as in in last quarter we reduced our guidance uh 47:39 47 minutes, 39 seconds from 40,000 to 32,000 ft and I think what uh we have done is 26,000. So if 47:46 47 minutes, 46 seconds you could just help us understand uh what uh has led to this reduction in terms of what we had guided. 47:58 47 minutes, 58 seconds So on the co-working and uh piece segment we obviously comfortably had both revenue and AITA guidance right. So 35% revenue growth and 37% AITA growth. 48:09 48 minutes, 9 seconds Um you know obviously speaks for itself on the basically you know the seat edition itself um you know obviously 48:18 48 minutes, 18 seconds it's a deliberate choice of quality over quantity. We were highly selective on our supply this year. be focused on only 48:25 48 minutes, 25 seconds grade A plus buildings uh prime micro markets uh centers with strong anchor demand and a larger share of elite and 48:33 48 minutes, 33 seconds managed office center which carry obviously longer fit out timeline also shaped the you know the whole phasing more broadly our supply additions are 48:41 48 minutes, 41 seconds now increasingly optimized for revenue per se rather than the headline seat count the underlying economics per seat are 48:49 48 minutes, 49 seconds still materially strong So, so just one more point around over here 48:59 48 minutes, 59 seconds the total the gross edition for uh FY26 had been around 30,000 seats and not 26,000 seats. 49:08 49 minutes, 8 seconds Uh yeah, can you help in terms of clarifying that 49:15 49 minutes, 15 seconds because when you put in the presentation first half was uh uh 14,000 and then we did it and then we did four. So my math 49:23 49 minutes, 23 seconds is 26. So I didn't understand how did you put 30,000 plus seats added because if we just go back in previous 49:31 49 minutes, 31 seconds presentations it's H2 it was 14 last quarter was eight this quarter was four 49:43 49 minutes, 43 seconds so the seat edition uh still is 30,000 it's because of some of the closures that have happened so the gross edition is 30,000 there's a few centers that 49:52 49 minutes, 52 seconds have been closed and hence because of that number again there's some mis mismatch in what what you're saying and what we are saying 50:00 50 minutes okay so what what the number that 26,000 is the net addition and 30,000 is the gross addition that's how we should look at it 50:07 50 minutes, 7 seconds so about roughly 22,000 is the net addition and 30,000 is the gross addition 50:17 50 minutes, 17 seconds okay okay and then where does this number come in 26 so the one that we 50:23 50 minutes, 23 seconds guiding like 4,000 that you've u highlighted in this quarter. If you add 50:30 50 minutes, 30 seconds that is 26. So what what does that number mean? 50:38 50 minutes, 38 seconds Sorry uh you would have to give us again some context around on 46,000 number. Uh 50:45 50 minutes, 45 seconds I'm I'll repeat. Yeah. So la last year basically last year we ended the year at 50:53 50 minutes, 53 seconds approximately about 1 lakh 35,000 seats and right now we have 1 lakh 57,000 seats as operational. So that's the 51:00 51 minutes 22,000 net addition and overall we added 30,000 and hence obviously we closed 8,000 so hence the net ad is 22. 51:10 51 minutes, 10 seconds Got it. Got it. Okay. And second question is uh so the some of the players with similar 51:18 51 minutes, 18 seconds size are talking about uh higher growth in terms of space edition. So I if if 51:27 51 minutes, 27 seconds this choosing premiums uh uh offering uh is it a one-time exercise or if you're going to continue this and this is going 51:35 51 minutes, 35 seconds to impact our growth expectation uh for the medium term as well and that's how we should look at it. 51:45 51 minutes, 45 seconds So I think obviously the unionization has now obviously become defaulted office. So it's not a one-time uh you know deal for 27. It's an overall 51:54 51 minutes, 54 seconds strategy overlay and obviously every new center that we are going to sign now is going to be in grade A and G clubs assets obviously in top demand micro 52:03 52 minutes, 3 seconds market. So there's not it's a it's a non-negotiable and it's a fundamental shift that we are uh doing in terms of 52:10 52 minutes, 10 seconds uh as as we said earlier we have given guidance on the number of seats that we would add this year would be between 22 52:17 52 minutes, 17 seconds to 25,000 seats that we would add. Now from our standpoint the headline number of seeds is not critical for us. I think 52:25 52 minutes, 25 seconds what that first seat realizes for us is more critical. So at the end of the day growth is a factor of number of seeds 52:32 52 minutes, 32 seconds multiplied by the realization from that seat. So obviously if my realization is higher from lower seat edition I can achieve the growth that we have uh 52:40 52 minutes, 40 seconds projected out there. We are currently saying that obviously our growth um you know is essentially going to be overall 52:47 52 minutes, 47 seconds somewhere in the 25% range where co-working will translate to about 25 to 27% and the design and build business will be about 22 to 25%. 53:01 53 minutes, 1 second Got it. Got it. Just funny question like with the increase in uh supply incremental supply from enterprise uh uh 53:10 53 minutes, 10 seconds developers uh will we see reduction in share of our managed aggregation uh format? Thank you. 53:19 53 minutes, 19 seconds Managed aggregation for us continues to remain a core strategy. I think as we explained in our uh you know in our I 53:26 53 minutes, 26 seconds mean uh the points that we highlighted clearly I think uh from our standpoint 53:33 53 minutes, 33 seconds this is you know uh fundamentally we are doing two three things here right one obviously we are looking at managed 53:42 53 minutes, 42 seconds aggregation but a better quality of supply and managed aggregation and that is happening through the developer partnerships that we spoke about. I 53:50 53 minutes, 50 seconds think we are in advanced stages of closing these two with two large developers uh where there would essentially be a partnership and 53:58 53 minutes, 58 seconds essentially the investment will go in and office will manage and run the show just like our manage the aggregation model. So I think that clearly drives 54:06 54 minutes, 6 seconds that for us. And then as we are obviously moving into uh some of these uh micro markets uh where we have done 54:16 54 minutes, 16 seconds partial MO where we are doing MO it gives us credibility in those markets to continue to you know expand those relationships with our developers and uh 54:25 54 minutes, 25 seconds currently we anticipate that this will the managed aggregation continues to remain a core strategy for us and I 54:32 54 minutes, 32 seconds think going forward we will continue to maintain the ratios in the 6040 kind of a range which we have done over the few quarters. 54:41 54 minutes, 41 seconds Got it. Thank you. 54:44 54 minutes, 44 seconds Thank you. The next question is from the line of Vikran Kashab from Asian market securities. Please go ahead. 54:52 54 minutes, 52 seconds Hi, thank you. Uh two questions. Uh one you mentioned is a new format. Will you walk us through what it is and why it 54:59 54 minutes, 59 seconds matters for office going forward and the second question is been on developer partnership that we were just talking about. There has been talk about your 55:07 55 minutes, 7 seconds developer partners. Could you explain what these deals look like and how they're fitting and you are going ahead? Thank you. 55:16 55 minutes, 16 seconds Sure. So, uh see partial memo is some um something where office signs a new property and um uh day one there almost 55:25 55 minutes, 25 seconds about 40 to let's say 60 odd% of the seats are already anchored by uh an enterprise or a GCC client at the time 55:33 55 minutes, 33 seconds of signing. So the balance is filled through co-working. Um so this gives us best of the both worlds. So it gives us 55:40 55 minutes, 40 seconds anchor economics from day one and uh you know and the yield upside of flexible inventory as this interface. So uh we 55:47 55 minutes, 47 seconds had been following it up uh since last couple of quarters and now this is uh becoming a more important part of our um 55:54 55 minutes, 54 seconds strategy in terms of uh developer partnerships. Um as Amit has mentioned uh this is a variant of our managed 56:03 56 minutes, 3 seconds aggregation model only. Here uh we are looking to have more portfolio level relationship with developers driving u 56:12 56 minutes, 12 seconds uh co-working and flex uh centers within their uh you know tech parks uh where we 56:18 56 minutes, 18 seconds would uh run u uh uh we'll have put our skin in the game in terms of you know putting portion of uh capital from our 56:25 56 minutes, 25 seconds side uh giving a portion of NG and uh uh but uh uh going more deeper uh and more 56:35 56 minutes, 35 seconds uh larger kind of you know relationship with those partners. The only difference here would be most of our managed 56:41 56 minutes, 41 seconds aggregation so far has been hed around on non-institutional space owners and now we are seeing an opportunity uh that 56:49 56 minutes, 49 seconds we can get more to uh build these partnership with larger developers. 56:55 56 minutes, 55 seconds Okay. So in in terms of occupancy and discrepancy mitigation how these two strategies put together would help you 57:02 57 minutes, 2 seconds out in terms of getting a higher occupancy since parcel would be taken care by your working and with this new 57:10 57 minutes, 10 seconds strategy of sourcing. How would you maybe this both are primarily anchored around on uh 57:19 57 minutes, 19 seconds risk aversion and risk mitigation. uh as you see uh most of the partial manage uh all the partial manage office centers or 57:26 57 minutes, 26 seconds partial MO centers are going to be straight leases. So we are starting the straight lease centers uh with a a kind 57:34 57 minutes, 34 seconds of a anchor demand so that uh the complete rental or a portion of the fixed rental is uh covered day one. So 57:41 57 minutes, 41 seconds it helps us reduce the occupancy buildup uh losses. uh in terms of developer partnerships in any case it it's uh 57:49 57 minutes, 49 seconds going to be risk averse because the risk will get shared between us and the developer uh both in terms of of occupancy across the tenure. U second it 57:59 57 minutes, 59 seconds also helps us uh drive a more uh drive a capital efficient model and u give uh a way to uh manage uh you know drive more 58:09 58 minutes, 9 seconds manage aggregation uh transactions. Why this is specifically we are calling it out because uh the MA transactions what 58:17 58 minutes, 17 seconds we are doing uh we want to highlight that we are doing the MA transactions and attempting to do these MA transactions in more grade A and A+ 58:24 58 minutes, 24 seconds buildings now uh in your presentation you also mentioned about AD 2.0 and office 6.0 Oh 58:33 58 minutes, 33 seconds uh you are going to build more of your premium versions. So in terms of capex for sele for square sheet how would you 58:41 58 minutes, 41 seconds uh it differs from your base versions of elite and bold per and the these two 58:49 58 minutes, 49 seconds formats will have more of the incremental citizen central going in 2017. 58:54 58 minutes, 54 seconds So um I mean if you really look at it 6.0 from a spend standpoint is not going to be very different than 5.0. It's a 59:02 59 minutes, 2 seconds complete refresh on the design but as far as the capital towards those u you know centers go the 6.0 centers it would 59:09 59 minutes, 9 seconds not be very different than what was being spent in 5.0 this 6.0 also will continue to be majority of the uh the the overall seat count that we will add. 59:19 59 minutes, 19 seconds Right? Obviously we currently as we had mentioned earlier out of the 200 you know 50 odd centers uh 35 plus are in 59:29 59 minutes, 29 seconds golden elite. So we'll continue to man maintain the ratio and hence I don't think the capital spend would be very different that what we have done for FI26. 59:39 59 minutes, 39 seconds Okay. Thank you and wish you lucky. All right. Thank you. 59:44 59 minutes, 44 seconds Thank you. Our next question comes from the line of Fenel Brahbert with Choice Institutional Equities. Please go ahead. 59:53 59 minutes, 53 seconds Hello. You are able. 59:56 59 minutes, 56 seconds Yeah. Yeah. So my first question is on the uh segments ahead. So what is the management guidelines on the uh revenue from construction and fit out projects? 1:00:06 1 hour, 6 seconds any yi growth we are expecting for uh uh next FY 2728 and uh if and what and from where we are 1:00:14 1 hour, 14 seconds expecting this growth. The second thing we have not reported any uh other income uh like revenue from others uh versus 132 million around 132 million in FI25. 1:00:27 1 hour, 27 seconds So uh it would be great if you throw some color like we are we will going to expect anything on this side or uh there will be zero for next uh coming years. 1:00:40 1 hour, 40 seconds Sure. So I'll answer the first part of the question and then I'll request uh Sumit Roachani our CFO to answer the second part. So let me walk you through 1:00:49 1 hour, 49 seconds the FI27 outlook across the key parameters. So starting with revenue, our co-working and allied segment is expected to grow in the range of 25 to 1:00:57 1 hour, 57 seconds 28% in FI27. Office transform is expected to grow in the range of 20 to 23% over FI26 levels. Together this 1:01:06 1 hour, 1 minute, 6 seconds total will constitute a revenue growth of approximately 25 to 27% for the full year. Our confidence is obviously coming 1:01:14 1 hour, 1 minute, 14 seconds currently from specific drivers committed GC signups that we've done uh both on mega scale increasing in micro and nano GCC segment obviously the MO 1:01:24 1 hour, 1 minute, 24 seconds and the partial MO that we've spoken about where conversion is already visible and the premiumization mix that shift that is driving obviously 1:01:31 1 hour, 1 minute, 31 seconds structurally better realizations across the uh total portfolio u on terms of the second part of the 1:01:38 1 hour, 1 minute, 38 seconds question I will just ask uh Sumitani to address that Yeah, the line item which says others in the segmental results that you're 1:01:46 1 hour, 1 minute, 46 seconds referring to uh represents revenue and results from the facility management services business that we had uh sold uh last year in September 24th sorry. 1:01:59 1 hour, 1 minute, 59 seconds Okay. So now we are not expecting anything uh onwards right and uh got it got it not right and and the second 1:02:08 1 hour, 2 minutes, 8 seconds question is on the uh payment of principal portion on lease liability which is increased significantly for FI26 so uh can you throw some light over 1:02:17 1 hour, 2 minutes, 17 seconds there and uh what we can expect for upcoming quarters or on this 1:02:24 1 hour, 2 minutes, 24 seconds so we have also added supply uh in a meaningful way this year alone we have added 30,000 receipts. So that alone 1:02:31 1 hour, 2 minutes, 31 seconds contributes to the increase in the payment of lease liabilities. Also some of the centers that we had added towards 1:02:38 1 hour, 2 minutes, 38 seconds the fourth quarter of last year. Uh we initially have some rentree period. Uh once that rent free period is over which got over in this year uh there was rent 1:02:47 1 hour, 2 minutes, 47 seconds outflow on those uh leases as well and then you know since we have been in business for for for a decade uh there 1:02:55 1 hour, 2 minutes, 55 seconds have been properties which have come up for renewal. So there were escalations on that as well. So these are the contributing factors but the primary 1:03:03 1 hour, 3 minutes, 3 seconds factor is the seed addition that we have done uh this year and towards the end of last year in the last month. 1:03:10 1 hour, 3 minutes, 10 seconds So just want to understand what was the uh escalation percentage if you can share the average escalation percentage or something which would be helpful for us. 1:03:22 1 hour, 3 minutes, 22 seconds So I would not have that uh handy uh you know in terms of the average escalation but typically the way the leases work is 1:03:30 1 hour, 3 minutes, 30 seconds that for the first 3 years is fixed then it's a 15% escalation and typically you know depending at the fifth year if you're renewing again then there could 1:03:39 1 hour, 3 minutes, 39 seconds be escalation at that stage but I don't have that number handy uh on the overall portfolio level. 1:03:47 1 hour, 3 minutes, 47 seconds Okay. Okay. And if you can allow me interrupt. We request you to please rejoin the queue if you have any further questions please. Thank you. 1:03:56 1 hour, 3 minutes, 56 seconds Our next question is from the line of Hitendra Pradhan with Maximill Capital. Please go ahead. 1:04:02 1 hour, 4 minutes, 2 seconds Yeah, sir. Thanks for the opportunity. I hope I'm uh audible. The first question is just a clarification uh on the uh you 1:04:10 1 hour, 4 minutes, 10 seconds know the seat addition. So 22 to 25k is our net addition guidance, right? 1:04:20 1 hour, 4 minutes, 20 seconds gross edition. Okay. 1:04:27 1 hour, 4 minutes, 27 seconds Uh uh this this addition would be 60 40 percentage that you mentioned that would be co-working versus the uh management. 1:04:35 1 hour, 4 minutes, 35 seconds No, I just to clarify uh we were talking about the managed aggregation ratio which is currently at 60% is managed 1:04:44 1 hour, 4 minutes, 44 seconds aggregation about 40% is straight less and this has trended in the last few quarters at the same level. So this is 1:04:51 1 hour, 4 minutes, 51 seconds not the mix of co-working versus managed office. This is a mix of managed aggregation versus straight leaves. 1:04:58 1 hour, 4 minutes, 58 seconds Okay. So on this incremental additions this ratio would be broadly maintained or will be more towards Yes. 1:05:10 1 hour, 5 minutes, 10 seconds Okay sir that's all from sir. Thank you. 1:05:15 1 hour, 5 minutes, 15 seconds Thank you. Our next question comes from the line of Shrinana Mittal with MS Capital. Please go ahead. 1:05:23 1 hour, 5 minutes, 23 seconds Hi uh thanks for the opportunity. I have two questions. uh questions if uh if fi 26 we saw 30,000 ft broad addition and 1:05:33 1 hour, 5 minutes, 33 seconds net addition being 23,000 so that means approximately uh 5% was the closure rate if I take last days so is this a level 1:05:41 1 hour, 5 minutes, 41 seconds of churn that you would characterize as a normal course of business or was there a uh some specific element of some 1:05:49 1 hour, 5 minutes, 49 seconds portfolio readjustment which happened this year um yeah that will be so uh Yes. So Shinjara uh you're right. 1:05:58 1 hour, 5 minutes, 58 seconds So FYI 26 was a year of uh portfolio rebalancing for us as we were punizing the network towards grade A and A plus 1:06:06 1 hour, 6 minutes, 6 seconds asset. Uh so we thought uh there are certain sectors which we should exit. So uh out of the uh broadly 8,000 seats 1:06:15 1 hour, 6 minutes, 15 seconds which we closed uh one specific instance was there were 3,000 seats which were from a short-term space setup 1:06:23 1 hour, 6 minutes, 23 seconds specifically for a single client uh which we um exited uh because this was more of a time arrangement and not a 1:06:30 1 hour, 6 minutes, 30 seconds permanent addition. The remaining closures primarily uh fell into two categories. one at the time of lease 1:06:37 1 hour, 6 minutes, 37 seconds renewal we evaluated each center against the return thresholds the micro market outlook and asset quality. So wherever 1:06:44 1 hour, 6 minutes, 44 seconds the terms did not justify renewal or where the buildings no longer met our grade A+ bar we exited. So in all of 1:06:52 1 hour, 6 minutes, 52 seconds these cases uh we consolidated demand from older centers into newer uh uh centers in the same micro market. So we 1:07:00 1 hour, 7 minutes uh did not lose uh all the customers or the revenue but we upgraded the experience for uh a significant portion 1:07:07 1 hour, 7 minutes, 7 seconds of the customers. So uh broadly uh we don't expect this percentage uh of seed uh closure across every year. 1:07:17 1 hour, 7 minutes, 17 seconds Uh understood understood that's helpful. 1:07:21 1 hour, 7 minutes, 21 seconds So like but going forward you would say that this 5% is not the kind of turn that we're looking for. maybe uh something on the lower side. 1:07:29 1 hour, 7 minutes, 29 seconds Yes, 5% is not the kind of a churn uh which we would uh look at. 1:07:34 1 hour, 7 minutes, 34 seconds Understood. Uh so my second question is a bookkeeping question. So if I look at the the adjusted rent number uh which is 1:07:42 1 hour, 7 minutes, 42 seconds reported in the normalized PNL that stands about 350 odd crores for FI26. Uh 1:07:48 1 hour, 7 minutes, 48 seconds but the cash flow rent number is 412 odd crores. uh so there which is a gap of about 60 odd crores and in H1 uh this 1:07:58 1 hour, 7 minutes, 58 seconds gap was about 20 odd kores and it was explained at that time that there is some cash flow acral timing mismatches and uh lease payments on IT products 1:08:06 1 hour, 8 minutes, 6 seconds because of which this gap exists but the understanding then was that this gap would not widen in absolute terms uh but 1:08:14 1 hour, 8 minutes, 14 seconds it appears to have so uh could you help me understand that what what what is the reason for the increase in this gap in absolute terms. 1:08:23 1 hour, 8 minutes, 23 seconds Yeah. So, uh the reconciling items that we had shared earlier, uh more or less those reconciling items are still there 1:08:30 1 hour, 8 minutes, 30 seconds as far as uh items like operating lease and uh as far as operating lease is concerned. Of course, that with the passage of time is a higher number. Uh 1:08:39 1 hour, 8 minutes, 39 seconds we do have a reconciliation uh and we can connect on this uh oneonone and we can walk you through this calculation. 1:08:46 1 hour, 8 minutes, 46 seconds Yeah, that would be helpful. U Thank you. Uh thanks for taking my questions and all the best. 1:08:53 1 hour, 8 minutes, 53 seconds Thank you ladies and gentlemen. Due to time constraints we will take that as our last question for today. I would now like to hand the conference over to Mr. 1:09:01 1 hour, 9 minutes, 1 second Sumit Lakhani for closing comments. Over to you sir. 1:09:12 1 hour, 9 minutes, 12 seconds Thank you everyone for joining us today. 1:09:14 1 hour, 9 minutes, 14 seconds We hope we have been able to uh give you a detailed overview of our business and answer your queries. Should you have any further questions or require 1:09:21 1 hour, 9 minutes, 21 seconds clarifications, please feel free to reach out to AGA, our investment relation advisers. Thank you once again and have a great evening. 1:09:31 1 hour, 9 minutes, 31 seconds Thank you. 1:09:33 1 hour, 9 minutes, 33 seconds On behalf of Office Space Solutions Limited and Asian Market Securities, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.