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ICICI Securities Report
We retain our Buy rating on Awfis Space Solutions Ltd. with a revised target price of Rs 1,049 (earlier Rs 979), as we roll forward to 25 times Mar’27E IGAAP Ebitda (earlier Dec-26E) of Rs 2.8 billion and adding net cash of Rs 2.4 billion.
Awfis has a unique business model. While the company does not act as a land aggregator or landlord of office spaces, it focuses on providing services to its clients on demand side and also partners with space owners/landlords on supply side.
With Awfis being the first co-working/flexible workspace company in India, there is also limited scope for comparison with industry peers. Hence, we believe Awfis is more comparable to listed hotel peers.
We believe that given Awfis’ superior RoCE profile, which is likely to consistently range over 50% FY26E onwards and net cash balance sheet combined with an estimated 53% Ebitda CAGR over FY24–27E, an enterprise value/Ebitda of multiple of 25 times is justified in line with hotel peers.
Key risks: Slowdown in overall office leasing across India; and pricing competition among co-working flexible workspace operators.
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