AWFIS Space Solutions Ltd Management Discussions

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The Indian flexible office space market is valued at USD 2.40 billion in 2025, with projections indicating growth to USD 3.64 billion by 2031, growing at a Compound Annual Growth Rate (CAGR) of 7.02% from 2026 to 2031. This market spans private offices, coworking spaces and virtual offices, catering to industries such as IT and telecommunications, media and entertainment, retail and consumer goods among others. Coworking spaces continue to dominate

the flexible workspace landscape in 2025, offering a compelling combination of affordability, flexibility and community appeal. The Southern region of the nation comprising Bengaluru, Chennai and Hyderabad commands a substantial share of he market. This highlights the sustained momentum of the regions tech-driven growth and expanding corporate presence.

Outlook

The flexible office market in India is poised to advance along a steady upward arc, driven by entrenchment of hybrid work models, fiscal prudence and the growing inclination of corporates towards agile, cost-effective workspace solutions. Notably, the emergence of Tier 2 and Tier 3 cities including Jaipur, Kochi, Indore, Lucknow and Coimbatore as new growth frontiers will open up new avenues of growth. Additionally, managed office solutions, bespoke, contract- based workspaces tailored for mid-to-large enterprises, are emerging as a hybrid offering, blending the flexibility of coworking with enterprise-grade operational control. These evolving trends point to a marketplace brimming with potential and intensifying competition through 2031.

Growth of India Flex Market (In Billion)

Key Growth Drivers

Company Overview

Awfis Space Solutions Limited stands as one of Indias foremost providers of flexible workspace ecosystems,

adept at catering to the evolving needs of contemporary organisations across the nation. With a strong presence in major metropolitan areas and emerging Tier-2 cities, the company offers a comprehensive portfolio that spans, customised managed offices, design and build services and a suite of allied services including food and beverage, IT infrastructure management, mobility solutions and event management. The company continually elevates its offerings to deliver an exceptional client experience, driven by innovation, agility and a commitment to operational excellence. Its progressive workplace models and strategic alliances have positioned it a trusted partner to startups, SMEs, multinational corporations and global enterprises alike.

The company is strategically positioned to benefit from the escalating demand for flexible workspace solutions by methodically expanding its pan-India presence and elevating its client-centric value proposition. The company aims to consolidate its leadership by leveraging its asset-light model, premium services and strong ecosystem that encompasses advanced workspace designs and comprehensive support solutions. With a resolute focus on client satisfaction, product innovation development and strategic talent acquisition, Awfis is primed to sustain its trajectory of growth with agility and purpose amid a dynamically evolving market.

Business Portfolio

The Company has curated a comprehensive service portfolio that caters to the shifting requirements of modern enterprises. Its core offerings include flexible coworking spaces, customised managed offices and design and build workplace solutions. Its flexible workspace offerings are structured into three main business segments: Space Solutions, offering coworking spaces, enterprise solutions and ancillary services such as food and beverage, IT support and transport solutions; Awfis Transform, which focuses on delivering design, construction and fit-out services for workspace projects; and Awfis Care, the former facilities management unit that was divested during the year to streamline operations.

Space Solutions and Allied Services

Awfis offers a versatile array of flexible workspace solutions, thoughtfully designed to accommodate a broad spectrum of client requirements, ranging from individual desks to bespoke office spaces with dedicated access. Positioned as an integrated solution platform for flexible workplace requirements, the Companys offerings in the space solutions segment include:

Extending its value proposition beyond conventional workspace infrastructure, Awfis has broadened its Allied Services portfolio to elevate the overall workplace experience. This includes initiatives such as Awfis Cafe for community engagement, TechLabs for IT and network solutions, and strategic partnerships like ECOS (India), which offers premium, sustainable employee transportation solutions to meet the demand for secure and cost-effective corporate travel. These initiatives, along with services in event management, mobility and concierge support, aim to deliver seamless, turnkey workplace solutions while boosting client satisfaction and generating ancillary revenue.

Elite by Awfis

Elite exemplifies the Companys premium offering, crafted for large enterprises and the GCCs seeking exclusivity,elevated designs and high-end amenities. These centres feature, enhanced privacy, curated services and access to premium allied solutions, such as personalised catering, concierge services and curated wellness programmes. Strategically situated in prime micro-markets, Elite Centres cement Awfis position as an end-to-end provider of flexible workspace solutions across the value chain. Over the year, this segment attracted several marquee clients, including Global Capability Centres (GCCs) and leading multinationals. This highlights Awfis reputation as a partner of choice for high-impact, turnkey workplace ecosystems.

Coworking Solutions

With a focus on flexibility and convenience, the Company provides coworking solutions that accommodate a range of booking durations, such as daily and weekly access to monthly, yearly or extended fixed-term arrangements. Its diverse clientele spans freelancers, start-ups, Small and Medium-sized Enterprises (SMEs) and larger corporates across industries, such as IT, IT-enabled services, banking, financial services, insurance and consulting.

Workspace reservations can be made through the Awfis mobile app or in collaboration with an extensive network of domestic and international property consultants and third-party aggregator platforms. Additionally, the sales team and community managers assist the clients through the reservation process. Once finalised, clients enter into a membership agreement specifying parameters, such as number of seats, seats pricing, contract duration, notice and lock-in clauses and the security deposit.

Enterprise Solutions

The Company specialises in customised enterprise workspace solutions, delivering a comprehensive suite of services that encompass workspace design, construction and ongoing management. Each office environment is tailored

in close collaboration with client teams to reflect the clients specifications and brand identity, resulting in fully equipped, ready-to-occupy spaces.

Pricing for these solutions is calibrated in alignment with service scope and individual client mandates. To attract and retain enterprise clients, the Company employs proactive business development strategies, nurtures enduring relationships and participates in proposal processes managed by both domestic and international property consultants, as well as third-party aggregators where applicable.

The Company centres are equipped with a wide range of amenities, such as high-speed Wi-Fi, meeting rooms, pantry services, printing facilities, collaborative areas and a tech- enabled visitor management system. The Company also offers technology-focused services like dedicated server space, IT support and customised facility management, alongside allied services including food and beverage options, storage solutions and event assistance as well as concierge services aimed at enhancing the overall client experience by supporting day-to-day operational needs.

Through a strategic blend of centralised and local procurement, it has established partnerships with multiple brands to provide members with exclusive deals and discounts. For business clients, both within and outside its network, the Company offers additional products and services, such as food and beverage plans, corporate catering, event management and corporate gifting options like discounted e-vouchers.

The Company has expanded its presence in Tier 2 cities and high-potential micro-markets, supported by the growing demand for flexible work models among large corporates and MNCs. Looking ahead, the Company intends to sharpen its focus on occupancy optimisation and operational excellence, while undertaking measured expansion in high- demand clusters. Concurrently, it seeks to amplify growth in high-margin allied offerings, such as TechLabs, premium transportation, concierge services and event management to enhance the enterprise client experience.

Awfis Transform

Awfis offers comprehensive design and build services through its Awfis Transform platform, catering to both its own centres and external commercial office spaces. For internal projects, the focus is on delivering cost-efficient and effective transformations that enhance revenue potential while ensuring modern, functional and aesthetically appealing environments. For external assignments, the Company enters into formal Client Agreements that typically involve an initial advance payment of 15-20% of the total contract value, with subsequent payments tied to predefined project milestones. Pricing is structured either on an item-rate basis with quantities finalised upon completion or as a lump-sum agreement with fixed fit-out costs.

The Design and Build (D&B) division drives tailored workspace solutions, space encompassing planning, interior design, project management and turnkey execution. By investing in seasoned professionals and embracing technologies, such as VR walkthroughs and digital tracking tools, the Company has augmented its execution capabilities and built a strong presence, particularly within the IT/ITeS and BFSI sectors. The divisions strength lies in its ability to meet diverse client requirements with precision, efficiency and high design standards.

With an expanded suite of services across design, turnkey delivery and real estate advisory, the Company empowers the execution of intricate, tailor-made fit-outs for leading enterprises and Global Capability Centres. The Companys approach is firmly anchored in sustainability, supported by an asset-light model that enables agile scalability. Leveraging digital tools to enhance client engagement and transparency, the Company is well-placed to diversify into adjacent sectors and manage increasingly sophisticated projects.

Workspace Sourcing and Procurement Model

Awfis employs a strategic approach across the entire commercial real estate market, encompassing both organised and unorganised sectors, institutional and non-institutional ownership and various grades and classes of properties. This allows for flexibility in centre size and location and access to a broad portfolio of spaces. spaces. The Company has facilitated strong supply-side additions, launching nearly 39,000 new seats across both Tier 1 and emerging Tier 2 markets. The Company has two different models for sourcing and procuring workspace:

Straight Lease Model

Under this model, developers or space owners lease space to flexible workspace operators under traditional lease terms. These terms include a fixed monthly rental, common

area maintenance charges, security deposit, minimum lock- in period, lease tenure and escalations. Awfis assumes full responsibility for the capital expenditure associated with fit-outs. The Straight Lease model remains the predominant arrangement between landlords and flexible workspace providers across the nation.

Managed Aggregation

The Managed Aggregation model generally requires developers or property owners typically bear the full or partial cost of fit-outs, while the operator may contribute the remaining balance based on the terms of the arrangement. Instead of fixed rental payments, these agreements often involve Minimum Guarantees (MG) determined case by case, coupled with a revenue or profit-sharing mechanism outlined in advance. Tenure for such agreements generally ranges from five to nine years, with MG obligations commencing between the fifth and thirteenth month of operations.

Over time, Awfis has deliberately transitioned its space acquisition strategy away from the conventional Straight Lease (SL) model towards an asset-light, lower-risk Managed Aggregation (MA) model. Through these Space Owner Agreements, Awfis provides operational and marketing support for the managed aggregation centres, while assuming related business risks.

Operational Highlights

The Company delivered a standout performance, achieving record net revenues of Rs.1,208 crores, reflecting robust 42% year-on-year growth. Operational EBITDA rose by 64% to Rs.402 crores, with margins improving to 33.3%. The national footprint grew appreciably with the addition of 48 new centres and over 39,000 operational seats, bringing the total to 134,121 seats across 208 centres in 18 cities. Notably, the asset-light Managed Aggregation model now accounts for 67% of total seats, driving greater capital efficiency.

Occupancy remained strong, with blended rates at a commendable 73% and mature centres operating at 84%. The Company diversified its clientele, onboarding marquee names, such as the National Stock Exchange and several Global Capability Centres. The Company also enhanced allied services through initiatives such as Awfis Cafe and premium mobility partnerships, while the in-house design and build business contributed Rs.278 crores in revenue. Recognised as a Great Place to Work and awarded an A+ stable credit rating, the Company steps into FY26 with a sharpened focus on optimising capacity utilisation and accelerating strategic expansion into high-potential geographies.

Continue Building an Industry-Leading Capital Efficient Model

Awfis will continue to prioritise expansion through its asset-light, risk-mitigated Managed Aggregation (MA) model. By establishing partnerships with property owners and sharing both capital outlay and revenue streams, the Company enhances return on investment while curtailing financial exposure. As of March 2025, 67% of total seats and 64% of centres are under the MA model, supporting rapid expansion and strong capital efficiency.

Expanding in New and Existing Market

Awfis remains committed to amplifying its footprint by consolidating its presence in Tier 1 micro-markets and accelerating expansion into promising Tier 2 cities such as Guwahati and Lucknow. The Company strategically invests in markets with robust demand and strong longterm growth prospects, ensuring a balanced and diversified network across 18 cities and over 58 micro-markets.

Enhance Product and Service Offerings

The Company continues to innovate its suite of workspace solutions and allied services. Focus areas include Awfis Transform and a range of value-added offerings, such as curated Awfis cafes, TechLabs, event management and premium mobility solutions. These enhancements are designed to deliver a superior, customisable experience for a diverse clientele, ranging from corporates and SMEs to start-ups and freelancers.

Improving Operational Efficiency

Operational excellence remains integral to Awfis strategy. The Company is achieving enhanced cost rationalisation by consolidating its supplier ecosystem, refining operating protocols and harnessing technology to drive process efficiency. These initiatives support higher occupancy, improved margins and sustained profitability as Awfis continues to scale.

Financial Performance

Analysis of the Financial Performance

Analysis of the Reported Numbers

Revenue from contract with customers

Revenue from operations rose significantly from INR 8,448.2 million in FY 2023-24 to INR 12,075.4 million in FY 2024-25, showcasing a robust year-on-year growth of 42.2%. This strong performance was directed by consistent momentum across all service segments. The coworking and allied services segment posted impressive growth of 48%, reaching INR 9160.4 million and contributing 76% to the total revenue. This was primarily fueled by the successful sale of newly added seats, sustained improvements in occupancy at mature centres and continued traction in the food and beverage vertical.

Construction fit-out and design and build segment registered a healthy growth of 36%, generating INR 2,782.6 crores and accounting for the remaining 23% of the revenue. The Companys growth trajectory reflects its focus on sustained innovation, operational excellence and a keen understanding of evolving workplace needs.

Expenses

For the year ended March 31, 2025, total expenses rose by 36.4% to Rs.12,170.9 million, compared to Rs.8,923.7 million in FY 2023-24. This increase was primarily driven by a 34.2% rise in sub-contracting costs to Rs.2,293.5 million, reflecting the execution of more construction and fit-out projects as well as the expansion of large managed office centres. Depreciation and amortisation expenses also grew by 40.7% to Rs.2,758.5 million, while other expenses increased by 47.7% to Rs.4,101.5 million. These increases reflect the Companys

broader operational scale and its strategic investments in ^ new centres, workforce expansion, and technology and infrastructure upgrades to support long-term growth.

Balance Sheet

Assets overview

As of March 31, 2025, the Companys total assets stood at Rs.25,069.8 million, up from Rs.13,980.8 million a year earlier.

This asset growth was driven by the Companys continued scale-up in operations, underpinned by strategic investments in infrastructure and capacity expansion. During the year, operational seat capacity rose from 95,030 to 134,121, highlighting the successful rollout of new centres and growing demand from a diversified client base. The expansion of the asset base underscores the Companys strong balance sheet and its readiness to support future growth with enhanced operational capabilities.

Non - Current Assets

As of March 31, 2025, the Companys total non-current assets rose significantly to Rs.19,912.9 million, up from Rs.10,938.0 million a year earlier, reflecting the Companys continued focus on long-term infrastructure and operational expansion. This increase was primarily driven by higher investments in Property, Plant and Equipment, which grew from Rs.3,341.4 million to Rs.5,083.2 million, supporting the rollout of new centres and technology upgrades.

Capital Work in Progress (CWIP) more than doubled to Rs.164.8 million, indicating the Companys accelerated development pipeline. Meanwhile, Right-of-Use Assets·linked to long-term lease agreements·grew substantially from Rs.5,800.1 million to Rs.10,705.2 million, reflecting both new leases and expansion across multiple cities.

Financial assets (non-current) also increased from Rs.1,022.6 million to Rs. 3,036.6 million, largely comprising security deposits for new centre opening and existing lease arrangements, longterm bank deposits and lease receivable accounted as per IND AS 116. Additionally, Non- current Tax Assets stood at Rs.541.2 million, representing receivables from tax authorities.

On the current assets front, the Company recorded strong growth from Rs. 3,042.8 million in FY 2023-24 to Rs. 5,157.0 million in FY 2024-25. This was led by a rise in contract assets, which increased from Rs.420 million to Rs.570 million due to the execution of ongoing fit-out and turnkey projects. Trade receivables also saw an uptick·from Rs.747.7 million to Rs.1,210 million·driven by higher billing volumes across services.

Additionally, Other Financial Assets (current) grew from Rs. 975 million to Rs. 1,710 million, supported by short-term financial placements, operational security deposits and lease receivables accounted as per IND AS 116. Other Current Assets rose from Rs. 780 million to Rs. 855 million

Overall Liabilities

Total Borrowings

As of March 31, 2024, the companys total borrowings amounted to Rs.321.1 million which reduced to INR 233.8 million by March 31, 2025.

For the fiscal year ending March 31, 2025, the Companys debt profile changed, with the Gross Debt to Equity Ratio reducing from 0.13 in FY 2023-24 to 0.05 in FY 2024-25 due to repayment of debt. Net Debt to Equity Ratio remained negative, moving from (0.10) in FY 2023-24 to (0.23) in FY 2024-25. Companys liquidity and effective debt management remains strong.

Key Ratios

Risk Management

The Companys Board bears overarching responsibility for supervising risk governance and internal control systems. This entails defining the organisations risk appetite, continuously monitoring and assessing significant risks, and thoroughly reviewing internal audit reports related to risk evaluations and control measures.

Human Resources

The Company continued to strengthen its human capital as a strategic pillar supporting growth and operational excellence by expanding its leadership team with seasoned professionals across design, project delivery, business development and enterprise sales, thereby enhancing its capabilities to deliver premium workplace solutions at scale. Emphasis was placed on encouraging a collaborative, innovative and customercentric culture, alongside investments in leadership transitions and learning initiatives to nurture talent and equip teams to meet evolving client needs. Reflecting its commitment to inclusivity, the Company upholds an Equal Employment Opportunity Policy that prohibits discrimination based on age, colour, disability, marital status, nationality, race, religion, gender, or sexual orientation. Employees are provided with comprehensive benefits, including insurance coverage, annual leave, retirement benefits and compensation comprising salary and allowances, as well as pension benefits under the Employee Pension Scheme managed by the Employees Provident Fund Organisation.

Internal control systems and their adequacy

Internal control systems are considered essential for the Companys efficient operations. These controls are specifically designed to align with the nature of the Companys activities. A comprehensive and robust framework is in place to safeguard assets and prevent losses arising from unauthorized use. The Company follows a well-defined organizational structure that establishes clear reporting channels, levels of authority, and procedures for executing business transactions. The Internal Audit Committee examines all regulatory reports and compliance records, recommending enhancements to internal controls, policies, and procedures as needed. Based on their evaluations and analysis of these reports, suggestions for improvements are implemented to ensure seamless operations.

Cautionary Statement

Certain matters discussed in this Report may contain statements regarding the Companys market opportunity and business prospects that are individually and collectively forward-looking statements. Such forward-looking statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and assumptions that are difficult to predict. These risks and uncertainties include, but are not limited to, the performance of the Indian economy and of the economies of various international markets, the performance of the industry in India and worldwide, competition, the Companys ability to successfully implement its strategy, the Companys future levels of growth and expansion, technological implementation, changes and

advancements, changes in revenue, income or cash flows, the Companys market preferences and its exposure to market risks, as well as other risks. The Companys actual results, levels of activity, performance or achievements could differ materially and adversely from results expressed in or implied by this

Presentation. The Company assumes no obligation to update any forward-looking information contained in this Presentation. Any forward-looking statements and projections made by third parties included in this Presentation are not adopted by the Company and the Company is not responsible for such third- party statements and projections.