Smartworks Coworking Spaces Limited , India's largest managed office platform, has reported a strong start to the fiscal year, with significant growth in revenue and profitability for the first quarter ended June 30.

Financial Highlights

The company's revenue for Q1 stood at INR 3,792.00 million, marking a 21% year-over-year increase and a 5.8% sequential growth. This robust performance was driven by a combination of increased occupancy in existing centers and the addition of new operational space.

Smartworks' normalized EBITDA saw a substantial improvement, reaching INR 607.00 million, up 109% year-over-year. The normalized EBITDA margin expanded to 16%, reflecting strong operational efficiency and disciplined cost management.

The company's focus on cash flow generation was evident, with normalized operating cash flow (OCF) increasing by 71% year-over-year to INR 855.00 million in Q1.

Operational Performance

As of June 30, Smartworks' operational area stood at 8.3 million square feet, with an overall occupancy rate of 83%. The company's operational footprint translates to approximately 190,000 seats, with mature centers (over 165,000 seats) showing a committed occupancy revenue exceeding 90%.

During the quarter, Smartworks added about 5,900 occupied seats, bringing the total occupied seats to around 158,500. The company's revenue per square foot reached approximately INR 173.00, excluding ancillary revenue.

Expansion Plans and Future Outlook

Smartworks has ambitious growth plans, with a target to reach 12 million square feet of operational area in the near future. The company has already signed agreements for an additional 1.9 million square feet, which will translate to 43,000 new seats by the end of the fiscal year.

Neetish Sarda, Managing Director of Smartworks, stated, "We expect to grow from our current 190,000 operational seats to 275,000 seats within the next 4 to 5 quarters, based on our signed contracts and ongoing fitouts."

The company aims to maintain its growth trajectory, targeting an annual addition of 30,000 to 40,000 seats, which aligns with its historical CAGR of 30-35% year-on-year.

Cost Efficiency and Financial Strategy

Smartworks highlighted its industry-leading cost efficiency, with a capex of INR 60,000.00 per seat and an opex of INR 34.00 to INR 36.00 per square foot. The company attributes this efficiency to economies of scale, standardization, and its ability to take on entire buildings as campuses.

Post-IPO, Smartworks is in a net debt-negative position, with its cost of borrowing at approximately 9%. The company expects its debt levels to become negligible over the next two years, further strengthening its financial position.

Market Position and Client Base

Smartworks continues to focus on enterprise clients, with 90% of its Q1 revenue coming from this segment. The company's multi-city clients now contribute over 30% of its revenue, indicating strong client retention and expansion within the Smartworks ecosystem.

Harsh Binani, Executive Director, emphasized the company's strategic choice of taking entire buildings, stating, "Our ability to recover capex in 32 months on long-term leases creates a strong entry barrier and turns our buildings into ROCE machines as they mature."

As Smartworks continues to expand its footprint and enhance its operational efficiency, the company remains well-positioned to capitalize on the growing demand for flexible workspace solutions in India's commercial real estate market.

Key Financial and Operational Metrics for Q1

With its strong financial performance and ambitious expansion plans, Smartworks is poised for continued growth in the flexible workspace market, leveraging its efficient operating model and focus on enterprise clients.

Smartworks Coworking Spaces Limited , a prominent player in the coworking industry, has released an update on ongoing litigation related to its initial public offering (IPO). The company disclosed details of a pending appeal before the Supreme Court of India.

Supreme Court Hearing

The matter, which stems from an appeal filed by Infrastructure Watchdog before the Securities Appellate Tribunal, was listed for hearing in the Supreme Court on August 14, 2025. However, the court has adjourned the case to August 18, 2025, with the matter still pending admission.

Parties Involved

Notably, the company's promoters - Neetish Sarda, NS Niketan LLP, and SNS Infrarealty LLP - are parties to the case. This information underscores the significance of the litigation for the company's key stakeholders.

Compliance and Transparency

Smartworks Coworking Spaces has made this disclosure in compliance with Regulation 30 of the Securities and Exchange Board of India (SEBI) Listing Obligations and Disclosure Requirements Regulations, 2015. The company emphasized that this is a voluntary disclosure, demonstrating its commitment to transparency with investors and regulatory bodies.

Company's Statement

In its filing, Smartworks stated, "The Company will provide further updates as and when there is a substantial development in the matter." This assurance indicates the company's intention to keep stakeholders informed about any significant progress in the litigation.

Background of the Litigation

The current update is part of a series of disclosures made by the company since July 19, 2025, regarding the pending litigation. These disclosures relate to the appeal filed by Infrastructure Watchdog concerning Smartworks' initial public offering of equity shares, as detailed in the company's prospectus dated July 14, 2025.

As the legal proceedings continue, investors and market watchers will be keenly awaiting the Supreme Court's decision on August 18, 2025, which could have implications for Smartworks Coworking Spaces and potentially the broader coworking sector in India.