Nukleus Office Solutions Ltd Management Discussions

Economic Overview

Global Economy

Global growth is projected to remain resilient at 3.3 percent in 2026 and at 3.2 percent in 2027: rates similar to the estimated 3.3 percent outturn in 2025. This steady performance on the surface results from the balancing of divergent forces. Headwinds from shifting trade policies are offset by tailwinds from surging investment related to technology, including artificial intelligence (AI), more so in North America and Asia than in other regions, as well as fiscal and monetary support, broadly accommodative financial conditions, and adaptability of the private sector. Global headline inflation is expected to decline from an estimated 4.1 percent in 2025 to 3.8 percent in 2026 and further to 3.4 percent in 2027. The inflation projections are also broadly unchanged from those in October and envisage inflation returning to target more gradually in the United States than in other large economies. Global financial conditions are still accommodative, despite some volatility and rising sovereign yields. Stock prices of major technology companies pulled further apart from prices of other stocks. Financial conditions, overall, changed little or tightened only moderately. The US dollar recovered slightly as the momentum of investors hedging of exposures slowed but came briefly under renewed pressure following the initiation of an investigation into the Federal Reserve chair. Global inflation is projected to continue its decline, with headline inflation falling to 3.8 percent in 2026 and 3.4 percent in 2027. This is virtually unchanged from that in the October 2025 WEO, with overarching trends of softening demand and lower energy prices remaining intact. Divergence between the United States and most other countries lingers (Figure 5). With pass-through from higher tariffs gradually materializing, US core inflation is projected to return to the countrys 2 percent target during 2027. Australia and Norway are also projected to see some drawn-out persistence in above-target inflation. In the United Kingdom, inflation, which increased last year partly due to one-off regulated price changes, is expected to return to target by the end of 2026 as a weakening labor market continues to exert downward pressure on wage growth. In Japan, inflation is expected to moderate in 2026 and converge toward the countrys target in 2027, as food and commodity prices ease. In the euro area, headline inflation is projected to hover around 2 percent, with core inflation projected to decline to that level in 2027. Inflation in China is projected to start rising from low levels, whereas inflation in India is expected to go back to near target levels after a marked decline in 2025 driven by subdued food prices.

Source – World Economic Outlook Update, January 2026: Global Economy: Steady amid Divergent Forces

Indian Economy

Indias economic momentum remains strong, underpinned by resilient domestic demand and sustained macroeconomic stability.

In FY 2025–26, Real GDP (GDP at Constant Prices) is estimated to reach Rs. 201.90 lakh crore (US $2.24 trillion), rising from the provisional level of Rs. 187.97 lakh crore (US $2.26 trillion) in FY 2024–25, reflecting a robust growth of 7.4%.

At current prices, Nominal GDP is projected to reach Rs. 357.14 lakh crore (US $3.96 trillion) in FY 2025–26, from Rs. 330.68 lakh crore (US $3.98 trillion) in the previous year, registering a growth of 8.0%.

On the production side, Real Gross Value Added (GVA) is estimated at Rs. 184.50 lakh crore (US $2.04 trillion), up from Rs. 171.87 lakh crore (US $2.07 trillion) in FY 2024–25, indicating a growth of 7.3%, while Nominal GVA is expected to expand to Rs. 323.48 lakh crore (US $3.59 trillion) from Rs. 300.22 lakh crore (US $3.62 trillion), marking a growth of 7.7%.

Collectively, these trends highlight Indias position as one of the fastest-growing major economies, supported by broad-based expansion across sectors.

Further, India is projected to reach a GDP of Rs. 4,26,45,000 crore (US $5 trillion) by 2027 and is on course to surpass Germany by 2028.

Rising employment and increasing private consumption, supported by rising consumer sentiment, will support GDP growth in the coming months.

India is primarily a domestic demand-driven economy, with consumption and investments contributing to 70% of the economic activity. With Indias economy showing resilient growth, supported by strong domestic demand, policy reforms, and a healthy investment pipeline, several new projects and developments are underway across key sectors. According to World Bank, India must continue to prioritise lowering inequality while also putting growth-oriented policies into place to boost the economy.

Source - Indian Economy Growth Rate, GDP & Economic Structure Insights IBEF

Road Ahead

Indias economic outlook remains robust, supported by strong macroeconomic fundamentals, resilient domestic demand, and sustained investment momentum. With Real GDP growth estimated at 7.4% in FY 2025–26, India continues to rank among the fastest-growing major economies globally, underpinned by broad-based expansion across manufacturing, services, and infrastructure.

A stable external position, reflected in foreign exchange reserves of Rs. 61.96 lakh crore (US$ 687.19 billion), along with steady foreign capital inflows through FDI, PE–VC investments, and debt instruments, reinforces confidence in Indias long-term growth trajectory.

Domestic demand remains a key anchor, supported by subdued inflation, rising air passenger traffic, resilient GST collections, and strong DII participation in capital markets. Manufacturing activity continues to expand, with PMI remaining firmly in expansionary territory and IIP growth accelerating, while the governments focus on renewable energy, innovation, and food security further strengthens structural growth drivers. Collectively, these trends position India favourably to sustain economic momentum, deepen capital formation, and enhance its role as a global growth engine in the years ahead.

Industry Overview

Asia Pacific Office Market

Quality Assets Continue to Drive Market Performance

The Asia Pacific office market remained resilient throughout the year, with occupier demand increasingly concentrated in premium, well-located office developments. Businesses continued to prioritise Grade A workspaces that offer operational efficiency, sustainability and enhanced workplace experiences, reinforcing the growing quality divide between prime and secondary assets.

Regional markets demonstrated varied performance, with India leading leasing activity, supported by technology and financial services expansion. Mainland China witnessed gradual improvement in leasing sentiment, while Hong Kong, Japan and Australia continued to benefit from healthy demand for premium office assets in established business districts.

Investment activity remained focused on institutional-quality commercial real estate, as investors favoured transparent markets with strong long-term rental potential. Looking ahead, demand for sustainable, high-specification office developments is expected to remain resilient, supported by evolving workplace strategies and continued preference for high-quality commercial assets.

Occupier Preference

- Premium Grade A developments remained the preferred choice across major markets.

- Demand continued to shift towards sustainable and technology-enabled workplaces.

Regional Momentum

- India recorded the strongest leasing activity.

- Recovery signs emerged in Mainland China.

- Hong Kong, Japan and Australia maintained healthy demand for quality office assets.

Outlook

The Asia Pacific office market is expected to remain supported by sustained demand for premium office assets as businesses continue to prioritise high-quality, sustainable and technology-enabled workplaces. Although new office supply is expected across several markets, occupier preference for Grade A developments is likely to support healthy leasing activity over the medium term.

Demand from technology companies, financial institutions, professional services firms and flexible workspace operators is expected to remain a key growth driver, while increasing adoption of energy-efficient and sustainable office buildings will continue to shape investment and leasing decisions. Supported by resilient occupier demand and long-term investment interest, the Asia Pacific office market is expected to maintain stable growth despite evolving macroeconomic conditions.

Source: JLL-Asia Pacific Office Market Dynamics Q1 2026

Indias Commercial Office Market

Driven by resilient occupier demand and a healthy pipeline of new office completions, the commercial office sector delivered another year of robust growth. Strong leasing activity across key business centres, coupled with sustained supply additions, reinforced market resilience despite a dynamic global environment. The sector achieved record levels of both office absorption and new completions, reflecting continued confidence among occupiers and developers alike.

ABSORPTION

- Delhi-NCR

- Mumbai

- Bengaluru

- Chennai

- Hyderabad

- Pune

- Kolkata

- Ahmedabad

- Kochi

Supply

- Delhi-NCR

- Mumbai

- Bengaluru

- Chennai

- Hyderabad

- Pune

- Kolkata

- Ahmedabad

- Kochi

CITY-WISE OFFICE MARKET SHARE

Key Market Drivers

Corporate Expansion & Digital Transformation

Continued expansion by global and domestic companies, supported by ongoing digital transformation and portfolio growth strategies, remained a key driver of office leasing demand. Despite global geopolitical uncertainties, business expansion plans continued to support healthy occupier activity across Indias major commercial markets.

Technology & GCC-led Office Demand

The technology sector continued to anchor office leasing activity, driven by hiring in emerging areas such as artificial intelligence, machine learning, data analytics, and cloud computing. At the same time, the expansion of Global Capability Centres (GCCs), along with demand from BFSI, engineering & manufacturing, and other knowledge-driven industries, further strengthened absorption across key office markets.

Rising Adoption of Flexible Workspaces

Corporates increasingly incorporated flexible workspaces into their long-term real estate strategies to improve scalability, optimise costs, and enhance operational flexibility. This continued shift towards managed offices and co-working solutions supported sustained demand across the flexible workspace segment.

Growing Preference for Premium Office Assets

Occupiers continued to favour institutional-grade office developments offering sustainability features, technology integration, and employee-centric amenities. Developers responded by expanding the pipeline of premium, green-certified office assets, reinforcing the long-term quality and resilience of Indias commercial office market

Office Supply & Absorption Overview

Robust leasing activity and continued supply additions reinforced the strength of Indias commercial office market during Calendar Year Q4 and FY25.

Outlook

The outlook for Indias commercial office market remains favourable, supported by resilient occupier demand, continued expansion of Global Capability Centres (GCCs), and sustained enterprise leasing activity. Technology-led industries, BFSI, engineering & manufacturing, and other knowledge-driven sectors are expected to remain key demand generators, while flexible workspace solutions continue to gain prominence as organisations adopt more agile workplace strategies.

At the same time, developers are expected to maintain a strong pipeline of premium, technology-enabled and sustainable office assets to cater to evolving occupier requirements. Backed by healthy market fundamentals and continued investment across major commercial centres, Indias office real estate sector is well positioned to sustain long-term growth and reinforce its role as a preferred destination for corporate expansion.

Source:- CBRE -India Office Figures Q4 2025

Indias Coworking Office Space

USD	USD	CAGR
4.53	8.70	13.94%
Billion	Billion	Growth Rate
2026	2031(F)	2026–2031(F)
Up from 3.98 billion in 2025	Projected Market Size	Projection

Growth Drivers

- Rising Startup & SME Ecosystem

Indias rapidly expanding start-up and SME ecosystem continues to drive demand for flexible workspaces. With over 200,000 start-ups expected by 2030, businesses are increasingly opting for co-working spaces to reduce upfront capital commitments and benefit from cost-efficient, scalable office solutions.

- Growing Enterprise Adoption

Enterprise demand for flexible workspaces continues to accelerate, with over 103,000 seats leased in FY23, led by the IT-BPM sector. Rising adoption by technology, e-commerce, consulting, and professional services firms across key business hubs such as Bengaluru, Hyderabad, and Gurugram is supporting long-term growth in managed and co-working office spaces.

- Hybrid Work Driving Flexible Leasing

With 53% of employers adopting hybrid work policies, businesses are increasingly shifting towards flexible office spaces and shorter lease commitments. This evolving workplace strategy is strengthening demand for agile workspace solutions that offer scalability, cost efficiency, and operational flexibility.

- Developer Partnerships Strengthening Supply

Strategic partnerships between real estate developers and flexible workspace operators are accelerating the development of premium Grade A office spaces across major metropolitan markets. Asset-light collaboration models and revenue-sharing arrangements are enabling faster expansion while enhancing workspace quality, strengthening the industrys long-term growth potential.

Market Segmentation by Facility Size

Enterprise Demand Continues to Drive Large-format Facilities

India Coworking Office Spaces

Market SIze

- Large Enterprises (52.65%)

- Combined Share of Small and Medium Enterprises (41.35%)

Large-format Facilities Lead the Market

Large-format workspaces accounted for 52.7% of the market, reflecting sustained enterprise preference for scalable, amenity-rich office environments. Their ability to accommodate larger teams and centralized operations continues to strengthen their market leadership.

Integrated Workplace Solutions

Enterprises increasingly prefer large-format facilities for their comprehensive workplace infrastructure, including dedicated meeting spaces, technology-enabled services, and premium business amenities. These features support operational efficiency while enhancing the overall workplace experience.

Operational Efficiency at Scale

Higher seat density and value-added service offerings enable operators to optimize utilization and improve operating efficiencies. This scalable business model continues to strengthen the attractiveness of large-format facilities for both occupiers and operators.

Medium-format Centres Gaining Momentum

As flexible workspace adoption broadens, medium-format centres are expected to witness accelerated growth, driven by increasing demand from SMEs, growth-stage enterprises, and project-based teams seeking professional yet cost-efficient office solutions.

Company Overview

Creating Spaces That Power Ambition

Nukleus Office Solutions Limited operates at the intersection of evolving workplace trends and growing business aspirations. As organizations increasingly prioritize flexibility, collaboration, and operational efficiency, the Company is focused on creating workspace solutions that cater to the changing needs of modern enterprises. Through its flexible and managed office offerings, Nukleus enables businesses to establish, operate, and scale their workspace requirements with ease and convenience.

The Company provides thoughtfully designed work environments tailored to a diverse customer base, including startups, emerging enterprises, professionals, and established organizations. By combining strategically located centres, operational expertise, and customer-centric service, Nukleus delivers workspace solutions that eliminate the complexities associated with traditional office management while enhancing productivity and workplace experience.

At Nukleus, the focus extends beyond providing physical office infrastructure. The Company is committed to building dynamic business ecosystems that foster collaboration, innovation, and business continuity. Supported by technology-enabled operations and a growing workspace network, Nukleus continues to strengthen its presence in Indias rapidly evolving flexible workspace sector.

As workplace preferences continue to evolve, the Company remains focused on delivering agile and scalable workspace solutions that align with the future of work. Through a commitment to service excellence, operational efficiency, and long-term customer relationships, Nukleus seeks to create sustainable value for its customers, employees, and stakeholders.

Strategic Competitive Edge

Building a Scalable and Customer-Centric Workspace Platform

1. Strategic Presence Across Key Business Locations

Nukleus operates across strategically located business hubs in the National Capital Region, including Bengaluru, Delhi, Noida, and Gurugram. Its presence in prominent commercial locations enhances accessibility and convenience for businesses while providing customers with a professional and well-connected work environment.

2. Proven Expertise in Workspace Operations

Since its incorporation, the Company has developed experience in managing co-working and managed office centres through a structured operational framework, supported by centre-level management and standardized operating procedures designed to ensure consistency and service quality across locations.

3. Flexible and Customizable Workspace Solutions

The Company offers a diversified portfolio of workspace solutions, including co-working spaces, managed offices, private cabins, dedicated desks, meeting rooms, and virtual offices. This enables businesses to choose workspace formats aligned with their operational requirements and growth plans.

4. Technology-Enabled and Customer-Focused Approach

Nukleus integrates technology-enabled workspace solutions with professionally managed infrastructure to enhance customer experience, operational efficiency, and service delivery across its workspace network.

Growth Strategy

"Guided by a customer-first approach and a commitment to operational excellence, Nukleus continues to pursue growth opportunities that align with evolving workplace preferences. The Companys strategy is centered on expanding its workspace network, enhancing service offerings, and strengthening long-term stakeholder value while maintaining a disciplined approach to growth."

Expand Workspace Network

Continue strengthening the Companys presence through the addition of workspace centres in strategic business locations to cater to the growing demand for flexible workspace solutions.

Strengthen Managed Office Solutions

Enhance the managed office portfolio by delivering customized workspace solutions tailored to the requirements of enterprises and growing businesses.

Enhance Customer Experience

Focus on service quality, operational efficiency, and technology-enabled solutions to strengthen customer satisfaction and long-term client relationships.

Improve Occupancy and Utilization

Drive operational performance through higher occupancy levels, efficient space utilization, and optimized centre-level operations.

Diversify Customer Base

Expand engagement across startups, SMEs, professionals, and enterprise clients to build a balanced and resilient customer portfolio.

Maintain Financial Discipline

Pursue growth opportunities while maintaining a disciplined approach towards operational efficiency, cost management, and sustainable value creation.

FINANCIAL OVERVIEW

Profit and loss analysis

Particulars (Rs. in Lakhs)	FY26	FY25	Y-o-Y change
Total Income	3,619.41	2,884.24	25.49%
Revenue from operations	3,547.85	2,870.52	23.60%
EBITDA	917.34	664.18	38.12%
Profit After Tax	213.53	206.21	3.55%
EBITDA Margin (%)	25.35%	23.03%
PAT Margin (%)	5.90%	7.15%
EPS (Rs )	5.30	7.53

During FY2025-26, the Company continued to strengthen its market presence and recorded healthy growth across key financial parameters. Higher revenues, improved operating earnings, and sustained business momentum contributed to the overall performance during the year. The Companys financial results reflect the growing scale of its operations and the continued demand for its workspace offerings. Key developments during the year are outlined below:

Revenue from operations increased by 23.60% to Rs 3,547.85 Lakhs in FY26 from Rs 2,870.52 Lakhs in FY25. The growth was primarily driven by the continued expansion of the Companys workspace network, addition of new centres, growth in seating capacity, and sustained demand for flexible workspace solutions. The increase in operational scale, coupled with a diversified customer base across co-working and managed office segments, contributed to higher revenue generation during the year.

Total income increased by 25.49% to Rs 3,619.41 Lakhs in FY26 from Rs 2,884.24 Lakhs in FY25. The growth was primarily attributable to the increase in revenue from operations, reflecting the Companys continued business expansion and operational growth.

EBITDA increased by 38.12% to Rs 917.34 Lakhs in FY26 from Rs 664.18 Lakhs in FY25. The improvement was supported by revenue growth, better operating leverage, and efficient management of operating costs across the Companys workspace portfolio.

EBITDA margin improved to 25.35% in FY26 from 23.03% in FY25, reflecting enhanced operational efficiency and the Companys ability to improve profitability while scaling its operations.

PAT increased by 3.55% to Rs 213.53 Lakhs in FY26 from Rs 206.21 Lakhs in FY25. The growth in profitability was supported by higher operating earnings during the year.

PAT margin stood at 5.90% in FY26 as compared to 7.15% in FY25. The movement in PAT margin reflects the impact of costs associated with business growth, expansion initiatives, and other finance and depreciation-related expenses during the year.

EPS stood at Rs 5.30 in FY26 as against Rs 7.53 in FY25. The change in EPS was primarily due to the increase in the Companys equity share capital following the IPO and related corporate actions undertaken during the year.

Risk Management

Effective risk management forms an integral part of the Companys governance framework and supports its long-term growth objectives. The Company follows a structured approach to identify, assess, monitor and manage risks across its business operations. Management regularly evaluates the evolving risk landscape, while the Board of Directors provides oversight to ensure that appropriate governance and control mechanisms remain effective.

- Financial & Compliance Risk: The Company remains focused on maintaining strong financial discipline and regulatory compliance across its operations. Robust internal processes, periodic reviews and continuous monitoring support accurate financial reporting and adherence to applicable statutory and regulatory requirements.

- Growth & Expansion Risk: As the Company continues to expand its workspace network, it remains focused on evaluating growth opportunities through a disciplined and strategic approach. Expansion decisions are supported by detailed commercial assessment and operational planning to facilitate sustainable long-term growth.

- Operational & Service Quality Risk: Delivering a consistent customer experience remains central to the Companys operations. Standard operating procedures, defined service processes and continuous operational oversight help maintain quality, safety and service standards across its workspace centres.

- Reputation & Customer Risk: The Company recognizes that customer satisfaction and brand reputation are important drivers of long-term success. It remains committed to delivering quality services and strengthening customer relationships through continuous improvement and responsive service delivery.

Human Capital

Empowering People, Enabling Growth

At Nukleus Office Solutions, people are at the heart of the Companys success. The Company believes that a skilled, motivated, and customer-focused workforce is essential to delivering superior workspace experiences and sustaining long-term growth. It remains committed to creating an environment that encourages learning, collaboration, accountability, and professional development.

As on March 31, 2026, the Company had a workforce of 48 employees comprising 32 male employees and 16 female employees across various functions of the organization. The Company continues to focus on attracting and retaining quality talent while fostering a culture of engagement, innovation, and continuous improvement. Through employee-centric practices and a supportive work environment, Nukleus aims to strengthen organizational capabilities and create long-term value for all stakeholders.

Internal Control Systems and Their Adequacy

The Company has established an adequate system of internal controls commensurate with the nature and size of its business operations. These controls are designed to safeguard assets, ensure the proper authorization and recording of transactions, maintain the accuracy of financial information, and support compliance with applicable laws and regulations.

The internal control framework is supported by established policies and procedures that facilitate effective monitoring of operational and financial activities. The Company follows applicable accounting standards for maintaining its books of account and reporting financial statements. Based on periodic reviews, the management believes that the internal control systems were adequate and operating effectively during the financial year.

Significant Changes in Key Financial Ratios:

Ratio	FY26	FY25	% Change	Reason for Variance
Current Ratio	2.04	5.96	-65.77%	Liquidity moderated as funds were deployed towards capacity expansion, supported by short-term borrowings and vendor credit.
Debt-Equity Ratio	0.44	0.27	60.79%	Increased borrowings supported capacity expansion and operational requirements, resulting in modest leverage.
Interest Coverage Ratio	3.27	3.90	-16.20%	Higher finance costs from additional borrowings reduced interest coverage, while earnings continued to cover interest obligations.
Return on Equity (RONW)	5.29%	9.49%	-44.21%	Higher equity base following the previous years capital raise moderated the return on equity.
Trade Receivables Turnover Ratio	14.50	17.87	-18.82%	Higher receivables, in line with revenue growth and an expanded client base, moderated the turnover ratio.
Trade Payables Turnover Ratio	5.45	8.21	-33.60%	Higher trade payables supported increased procurement and operational activity during the year.
Net Working Capital Turnover Ratio	1.79	1.84	-2.82%	Broadly stable, with the movement reflecting additional working capital deployed to support business growth.
Net Profit Ratio	5.90%	7.15%	-17.49%	Margins reflected higher depreciation, finance costs and operating expenses associated with added capacity.
Return on Capital Employed (ROCE)	5.31%	7.12%	-25.48%	Capital employed increased ahead of earnings as the Company invested in additional capacity.
Debt Service Coverage Ratio (DSCR)	6.23	5.85	6.37%	Improved earnings available for debt servicing strengthened the Companys debt service cushion.

Future Outlook

The flexible workspace industry continues to benefit from evolving workplace preferences, increasing entrepreneurial activity, and the growing adoption of hybrid working models. These structural trends are expected to support sustained demand for managed and flexible workspace solutions across India.

Against this backdrop, Nukleus Office Solutions remains focused on strengthening its workspace portfolio, enhancing occupancy levels, and delivering technology-enabled solutions that improve customer experience and operational efficiency. The Company will continue to evaluate growth opportunities through a disciplined approach while maintaining its focus on service excellence, operational efficiency, and financial prudence.

With an established presence across key business locations, an experienced management team, and a scalable business model, the Company is well-positioned to capitalize on opportunities emerging from Indias evolving workspace ecosystem. Supported by sound governance practices and a customer-centric approach, Nukleus remains committed to creating sustainable long-term value for its stakeholders.

Cautionary Statement

Certain statements in this Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations, or predictions may constitute forward-looking statements within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed or implied due to various factors, including changes in economic conditions, industry dynamics, government policies, regulatory developments, market conditions, competitive environment, and other risks beyond the Companys control.

The forward-looking statements contained in this report are based on information available to the management as of the date of publication and reflect the Companys current assumptions, expectations, and business outlook. While the Company believes these assumptions are reasonable, they are subject to inherent uncertainties and risks that could cause actual outcomes to differ materially from those anticipated. Readers are therefore advised not to place undue reliance on these statements. The Company assumes no obligation to publicly update, amend, or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required under applicable laws and regulations.