AWFIS Targets 30% Revenue Growth and Profitability by FY25

Services

Equity Investment with CA Abhay

FNO Stocks with CA Abhay

Option Trading with CA Abhay

Equity Trading with CA Abhay

Stock Market Masterclass

AWFIS Projects 30% Revenue Growth and Profitability in FY25

Team FS

21/Jun/2024

Key Points:

AWFIS targets 30% revenue growth and profitability in FY25.
EBITDA margins expected to improve by 1.5% in FY25 due to better operating leverage and efficiency.
Significant growth in occupancy rates, particularly in Tier 1 and Tier 2 cities.

AWFIS, a leading provider in the flexible workspace industry, is setting ambitious goals for FY25, aiming for a substantial 30% revenue growth and achieving profitability. Mr. Amit Ramani, CMD of AWFIS, shared insights into the company’s strategic plans and performance expectations during a recent management interview.

Revenue Growth and Profitability

AWFIS is optimistic about its financial outlook for FY25. The company is targeting a robust 30% increase in revenue and expects to become profitable. This growth is anticipated to be driven by enhanced operational strategies and improved market conditions.

EBITDA Margin Improvements

The company is also projecting a 1.5% improvement in EBITDA margins for FY25, up from the current levels of 31%. This improvement is attributed to better operating leverage, increased occupancy, and enhanced efficiency levels across its operations.

Portfolio Distribution and Growth

AWFIS boasts a portfolio with 90% of its centers in Tier 1 cities and 10% in Tier 2 cities. The growth trajectory has been impressive, with 85% growth from Tier 1 cities and 15% from Tier 2 cities. This distribution highlights AWFIS's strategic focus on urban hubs while also tapping into emerging markets.

Margin Analysis

The company operates with slightly lower margins in managed aggregations, ranging between 22-24%, while straight leases maintain around 30% margins. The management indicated that the blended margins in center operations are around 25-26%, and they expect these levels to be sustained.

Occupancy Rates

AWFIS reported an occupancy exit rate of 71% at the end of FY24. Management also noted that recently operational centers are maintaining this occupancy rate. For centers with over 12 months of operation, occupancy stood at 81%, a consistent trend observed over the past years. The company expects blended occupancy rates to range between 70-72% and reach 84-85% for centers with more than 12 months of vintage.

Expansion and Seat Capacity

In FY24, AWFIS added 28k seats, ending the year with 95k seats. The company plans to add an additional 40k seats in FY25, projecting a visibility of 30k seats. Currently, AWFIS has 15k seats under fit-out and another 15k seats in advanced stages of preparation.

Partnerships and Tenure

AWFIS's portfolio has a significant portion (66%) in partnership with landlords, a strategy expected to continue into FY25. The company maintains flexible tenures with landlords ranging from 5-9 years and with customers from day one up to 5 years. The blended tenure stands at around 33 months, with customer lock-ins averaging 24 months.

Conclusion

AWFIS's strategic plans and strong growth metrics indicate a promising future. The focus on improving operational efficiency, expanding seat capacity, and maintaining high occupancy rates positions the company well for achieving its ambitious targets for FY25.

Stay tuned with Finance Saathi for more updates and in-depth analyses on AWFIS's performance and other significant industry developments.

Also Read : BSE Sensex Drops 0.4% Amid Profit Booking and Budget Talks

Join our Trading with CA Abhay Telegram Channel for regular Stock Market Trading and Investment Calls by CA Abhay Varn - SEBI Registered Research Analyst & Finance Saathi Telegram Channel for Regular Share Market, News & IPO Updates.