Indiqube Spaces Ltd (INDIQUBE) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen, good day and welcome to the Q2 FY27 earnings conference call for IndiQube Spaces Limited hosted by Nirmal Bang Institutional Equities. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Rahul Kundnani from Nirmal Bang Institutional Equities. Thank you and over to you, sir.
Rahul Kundnani (Nirmal Bang Institutional Equities): Thank you, Hillary. Good afternoon, everyone. On behalf of Nirmal Bang Institutional Equities, I would like to welcome you all to Q2 FY27 earnings call of IndiQube Spaces Limited. With us, we have today from the management, Mr. Rishi Das, Chairman, MD & CEO; Ms. Meghna Agarwal, Co-founder & COO; Mr. Pawan Jain, CFO; Mr. Vikas Agarwal, Head Investor Relations; Mr. Vamsi Chitrathi, AVP Marketing. I will now hand over to the management for their opening remarks, after which we will open the floor for Q&A. Over to you, sir.
Rishi Das (Indiqube Spaces Ltd): Thank you. Good afternoon, everyone. Hope I can start, or you want me to wait for a couple of minutes for people to join?
Rahul Kundnani (Nirmal Bang Institutional Equities): Rahul, sir, you can begin. We can hear.
Rishi Das (Indiqube Spaces Ltd): Yeah, Rahul, shall I start?
Rahul Kundnani (Nirmal Bang Institutional Equities): Yes, yes, sir, we can start.
Rishi Das (Indiqube Spaces Ltd): Good afternoon, everyone, and thank you for joining us for IndiQube Spaces Limited Q2 FY27 earning call. It is my pleasure to welcome our shareholders, analyst, investors, and all the participants joining us today. Our earnings presentation has been uploaded on the stock exchange and on our website, and we trust you had an opportunity to go through it. As we are all aware, India is increasingly becoming the world's leading innovation and operations hub. The rapid growth of Global Capability Centers, as we call them GCCs in short, multinational corporations and Indian enterprises, is changing the way businesses think about their workplaces. Every one of these enterprises need workspaces that can be made available to them quickly, that can scale across cities,
Rishi Das (Indiqube Spaces Ltd): the years, we have evolved from a managed workspace provider into an integrated enterprise workspace platform. Today, we manage approximately 10.86 million square feet across 138 centers in 17 cities, with approximately 2,41,000 seats and a total of 884 clients. Our business model is built around a carefully aligned investment and recovery cycle. We typically take spaces from landlords, develop it into customized workplaces, and secure long-term commitments from enterprise customers. Our average customer lock-in is approximately 35 months. We invest around 1,650 rupees per square feet in the fit-outs, and our investment recovery period is approximately 36 months. A new center typically reaches operational break-even at around 55 to 60% occupancy within 6 months of rent commencement, and it approaches steady state within 12 months. There is another important aspect of our model that we want to highlight. Our landlord arrangements typically have long underlying tenures, averaging around 15 years. However, our lock-in commitment is approximately, on an average, 38 months, after which we have the option to continue or exit, subject to contractual terms. So, what happens, this structure gives us access to long-term supply, while maintaining flexibility in our own commitments. Let me now turn to our financial performance. We have delivered another strong quarter, as you would have seen with our earnings presentation. In Q2 FY '27, our revenue was approximately 475 crores. This has grown 34% year-on-year. EBITDA as per IGAAP stood at 105 crores, growing 40%, while PAT was 57 crores and that grew by 63%. For the first half of the year, since we just completed H1, our revenue stood at 904 crores, growing 35%, and PAT was 92 crores, growing 66% compared to the same period last financial year. We also paid income tax of 22 crores in FY '26 full year, and we have paid 13 crores in the first half of FY '27. Our VAS revenue has reached 154 crores in H1, and this has grown very substantially, 74% year-on-year. And now this contributes around 17% of our operating revenue, compared to last year which was 13%, now 17% of our operating revenue is coming from value-added services. Our steady state occupancy has also improved to 91%, compared with 89% last year. This is an important demonstration of how portfolio maturity, improving occupancy, and additional services are contributing to our growth. Looking ahead, we have a significant growth runway. We approximately, currently, have 3.8 million square feet of headroom, and this represents about 85,000 seats. Of this, for approximately 2.67 million square feet, we have the LOI signed, and this space is expected to become operational over the next 12 to 18 months. The balance 1.14 million square feet space is is is available in our operational buildings, and this can be offered for client occupancy on immediate or shorter notice. Our expansion is also guided by the location preference of enterprise customers and access to talent. We are continuing to deepen our presence in key micro markets of National Capital Region, NCR, Mumbai, and Hyderabad, in addition to already what is happening in Bangalore and Chennai. Approximately 80% of our centers are within 3 kilometers of metro station, and 3.46 million square feet of our portfolio is green certified. With that, I will now hand over to my co-founder, Meghna Agarwal, who will take you through our strategy and key business insights for the quarter. Thank you.
Meghna Agarwal (Indiqube Spaces Ltd): Thank you, Rishi. I think the numbers Rishi has shared demonstrate the scale we have built and the strength of our underlying business model. We are building long-term enterprise relationships, and our customer increasingly see us as a strategic managed space partner capable of supporting their growth across multiple locations. And a few numbers to reinforce this. 54%
Meghna Agarwal (Indiqube Spaces Ltd): revenue comes from GCCs, reflecting our strong positioning with the global enterprise. 41% of our revenue comes from the client occupying more than one IndiQube center, demonstrating the depth of our relationships and ability to grow alongside our clients. Clients with requirements of over 300 seats accounts for 65% of our occupied space, and these clients stay with us for an average tenure of about 47 months. Across our portfolio, the average client tenure is approximately 42 months. Nearly 63% of our clients are acquired through our own brand and direct channels, while brokerage accounts for just 2.29% of our operating revenue. This reflects the strength of our brand, direct customer relationships, and distribution capabilities. These numbers tells us that we are building much more than a managed space business. We believe the opportunity ahead of us is significantly larger than the traditional managed workspace market, and we are extremely excited about this journey. Historically, enterprise have managed the requirements like real estate, design, infrastructure, technology, food, transport, employee experience, sustainability, and ongoing operational management through multiple vendors and fragmented relationships. We believe that there's an opportunity to bring these capabilities together through a single integrated enterprise space platform. And our strategy is, therefore, built around three distinct layers of monetization. The one layer of monetization is GROW, the core platform. GROW is a managed workspace business and the foundation of IndiQube. It provides reoccurring revenue, contractual visibility, and a nationwide network through which we serve enterprise across multiple cities. As center mature and occupancy improves, this layer also benefits from improving operating leverage. More importantly, GROW creates the customer relationships and physical network from which the rest of the platform can scale. Our layer two is managed space services, meaning expanding the customer wallet share. The second layer is all about increasing our participation in the managed space lifecycle. Once an enterprise occupies a space, it needs multiple services to operate it effectively. Through IndiCare, we provide facilities and property management, IT, food and beverage, transportation, and other workspace services. We are also taking these operating capabilities beyond IndiQube centers into a distributed commercial network, such as retail outlets and branch branch management across India. Through DesignQube, we are leveraging our design, architecture, and project execution capabilities to serve enterprise customer beyond the spaces managed by IndiQube. Our proprietary technology stack, MiQube, sits across these layers, helping us manage service delivery, operations, and a consistent employee experience across locations. This allows us to grow with the customer without necessarily adding more real estate. And the layer three is the strategic adjacencies, deploying the growth capital. The third layer focuses on the adjacencies where our existing capabilities and the customer relationships allows us to deploy capital selectively and create new revenue opportunities. Our solar journey began in 2019, 2020 with rooftop installations across our properties. Since then, we have scaled to more than 40 installations, expanded into captive solar generations across Karnataka, Maharashtra, and Tamil Nadu. We currently have approximately 30-megawatt plant of operational capacity, with another 30-megawatt expected to become operational over the next year. We have already generated close to 15 crores in revenue from the solar solutions in H1 against an investment of approximately 46 crores. Under IndiQube Echo, we are scaling such sustainability solutions across green power, green building certifications, energy efficiency, water conservation, waste management, and renovation. We are beginning to see these three layers of monetization come together, and as we look ahead, we believe IndiQube is entering in a very exciting phase of its journey. GROW provides the reoccurring revenue base and the customer network. Workspace services increase our share of customer spend and extend our participation beyond the physical workspace. And lastly, the strategic adjacencies allow us to deploy growth capital selectively into capabilities that strengthen the platform over the long term. Our ambition is not simply to build more workspaces. It is to build India's most trusted, integrated, and profitable enterprise workspace platform. We remain focused on the disciplined growth, stronger customer relationships, and sustainable long-term value creation for our shareholders. Thank you for your continued trust and support.
Meghna Agarwal (Indiqube Spaces Ltd): and would be happy to take your question.
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