Awfis posts Rs 38.67 Cr profit in Q2 FY25 as revenue surges 40%

Co-working space provider Awfis Space Solutions posted a notable 40.46% surge in revenue from operations to Rs 292.38 crore in Q2 FY25, up from Rs 208.15 crore in the same period last year.

Awfis swung to profitability in the latest quarter, recording a net profit of Rs 38.67 crore compared with a loss of Rs 4.34 crore in Q2 FY24.

Total expenses rose by 30.85% year-on-year (YoY) to Rs 287.29 crore, reflecting increased sub-contracting, employee, and operational costs as Awfis scaled its footprint to meet rising demand.

Sub-contracting costs, a major component tied to its unique profit-sharing model, jumped by 30.80% YoY to Rs 56.13 crore. Employee benefit expenses also saw an uptick, increasing 16.75% YoY to Rs 39.38 crore, with other operating expenses climbing 30.41% YoY to Rs 87.01 crore.

At Rs 218.31 crore in Q2, nearly three-fourths of Awfis' revenues come from giving co-working space on rent and allied services. This segment saw a 43% increase in revenues quarter-on-quarter. Meanwhile, construction and fit-out projects saw a 36.3% rise in revenues to Rs 68.15 crore in the latest quarter.

Since its stock market debut in late May, workspace provider Awfis's share price has nearly doubled to Rs 776, growing 78.4% from its listing price of Rs 435.

Managing Director Amit Ramani has attributed the company's success to its distinctive managed aggregation model. At TechSparks Bengaluru, he emphasised the model’s uniqueness, highlighting Awfis' ability to integrate a hospitality-style profit-share system at scale—a first in the co-working space.

Awfis went public earlier this year, becoming the first co-working firm in India to list, as it tapped into strong investor confidence and a robust business model.

Over the years, Awfis has increased its efficiency in utilising capital to generate profits. In FY24, for every rupee invested, the company generated 42.8 paise of additional income, resulting in a return on capital employed (ROCE) of 42.8%, up from 25.3% in FY23 and 1.8% in FY22, as per its FY24 annual report.

Awfis mostly operates on an asset-light managed aggregation model, wherein the developer or owner of the office space bears a portion of the capital expenditure in exchange for a share of revenue or profits. This model enhances resilience during market downturns, such as the COVID-19 pandemic, when demand for office space is low. This approach is in contrast to the straight lease model, where office space providers bear the entire capital expenditure, Ramani had said in a pre-IPO meet in May.