Awfis Space Solutions Limited (AWFIS) Earnings Call Transcript & Summary

Ladies and gentlemen, good day and welcome to Awfis Space Solutions Limited Q1 FY '27 Earnings Conference Call hosted by Nirmal Bang Institutional Equities. Before we begin, a brief disclaimer. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on date of this call. These statements are not the guarantees of future performance, and it may involve risks and uncertainties that are difficult to predict. [Operator Instructions] 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.

Thank you, Palak. Good evening, everyone. On behalf of Nirmal Bang Institutional Equities, I welcome you all to the Q1 FY '27 Earnings Call of Awfis Space Solutions Limited. The management is represented by Mr. Amit Ramani, Chairman and MD; Mr. Sumit Lakhani, CEO; Mr. Sumit Rochlani, the CFO. 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.

Thank you, Rahul. Thank you, and good evening, everyone. A very warm welcome to all of you for joining us on the call today. I'm joined by Mr. Sumit Lakhani, our CEO; Mr. Sumit Rochlani, our Chief Financial Officer; and our Investor Relations adviser from SGA. Our Q1 FY '27 results presentation has been uploaded on the exchanges, and I hope you've had a chance to review it. Before I get into our performance, I want to spend a moment on the broader landscape because the momentum we are building on continues to strengthen. India's office market delivered its strongest first half on record H1 2026, with gross leasing of approximately 43 million square feet, up 5% year-on-year. GCCs remain the single biggest driver of the demand, leasing 16.5 million square feet and growing 38% year-on-year, and now accounting for almost 38% of the total office leasing in the country. Flexible workspace operators posted their strongest half year performance yet, leasing 8.4 million square feet, a 55% increase over H1 2025 and the highest ever half yearly volume the segment has recorded. India's GCC ecosystem itself has now crossed 2,100 centers, generating nearly $100 billion in revenue, with installed talent exceeding 2.3 million people and accounting for over 40% of India's commercial real estate leasing. The AI wave continues to accelerate this. India now ranks #1 globally in AI hiring intensity across GCC markets, and GCCs are increasingly choosing India, not just as a cost destination, but as a genuine innovation and product hub. This plays directly to our strengths across GCCs, managed office and coworking alike. Starting with performance highlights for this quarter. We are pleased to report another quarter of strong execution. Revenue grew by 27% year-on-year to INR 425 crores, while EBITDA increased 28% to INR 162 crores, with EBITDA margin expanding to 38.2%. Profit before tax stood at INR 24 crores, and we continued to deliver industry-leading capital efficiency with a ROCE of 55%. Our coworking business grew 27% year-on-year, driven by sustained demand from enterprises and global capability centers. Alongside the continued premiumization of our portfolio, the GCCs and Fortune 100 companies have become a structural part of our client base. Today we serve 100-plus unique GCC clients, contributing 24% of our rental revenue, up from smaller base just a few years ago, with additional mandates already secured and expected to commence operations over the coming quarters. Our Transform business, construction and fit-out solutions, delivered 25% year-on-year growth, supported by a healthy pipeline of projects from large enterprises and GCCs, particularly those expanding into new geographies or consolidating operations into hybrid technology-enabled workplaces. This business has evolved well beyond its in-house capability, a shift I'll come back to shortly, and is now contributing meaningfully to revenue growth while accelerating project execution across our portfolio. Let me walk you through the 5 growth engines we outlined last quarter, each of which continues to strengthen the business. GCC demand environment remains robust, led by enterprises and global capability centers expanding their footprint across India. As clients increasingly prioritize high-quality workspaces in prime business districts, our focus on premium-grade A-plus assets continues to position us well to capture this opportunity. The GCC's client life cycle at Awfis follows a predictable pattern. Clients typically enter at 25 to 50 seats, expand to 100 to 300 seats as operations mature, and increasingly move into managed office mandates over time. This creates long-term revenue visibility, deep stickiness, and rising allied services attach rates as relationships deepen. Premiumization at scale. During this quarter, we further strengthened our premium supply pipeline by signing a cobranded developer partnership with Malpani Estates for 2 grade A-plus assets in Pune for 1.4 lakh square feet, a first-of-its-kind capital-light construct for Awfis in this format. Malpani Estates is a Pune-based [ headquartered ] business group with a legacy of over 100 years and well-established real estate development track record across commercial, residential, and industrial projects in the city. Partnering with the developer of this pedigree gives us confidence in both the quality of the assets and the pace of delivery. We have also signed ultra-premium grade A-plus assets in 30,000 to 50,000 square foot bracket, spanning both live and under-construction buildings. We now have 7 properties in our premium across micromarkets, including Hebbal, Golf Course, Whitefield, Worli, and 2 properties live and 5 under construction. These additions reinforce our presence in high-demand micromarkets and are expected to command pricing which is 30% to 50% higher than our existing portfolio, providing a strong runway for future revenue growth and margin expansion. As of June 30, we operated 37 Gold and Elite centers across key enterprise and GCC hubs. Premiumization is translating into structurally better realization, stronger pricing power, longer client relationships, and a high-quality revenue mix. And importantly, the full financial benefit is still ahead of us as these centers continue to mature. We have also continued to build on our wellness and compliance credentials. Awfis remains the first portfolio-wide certified coworking brand with WELL ratings now spanning 35 centers. Our premium footprint now spans key GCC hubs, including all 7 Tier 1 cities, giving us presence exactly where premium demand sits. These centers are increasingly the front door for enterprise conversion, large managed office mandates, and high allied service attachments. Our execution pipeline remains healthy with firm focus on adding supply where enterprise demand is deepest, not simply expanding for its own sake. The next engine is multiformat supply, and this quarter, it's worth talking through in some depth because the strategy is now showing up clearly across all 3 distinct pillars. The first is our revamped MAM, managed aggregation model, which runs into 2 arms: the first arm is developer partnerships. During the quarter, we signed a partnership with Malpani Estates, a leading Pune-based [ real estate ] developer, for 2 grade A plus properties spanning across 1.4 lakh square feet. This is joint branding construct and to our knowledge, the first-of-a-kind partnership model in Indian flex. It gives us grade A-plus supply at scale with low balance sheet drag, directly strengthening our industry-leading ROCE. The second arm is classic MA, where we apply strict filters to build a distinct product from value format players focused squarely on higher seat realization and higher velocity of sales. We have signed 6 grade A properties across premium micromarkets, including Viman Nagar in Pune, Thane in Mumbai, Rajarhat in Kolkata, and Sector 62 in Noida, with 7 more properties in the pipeline at approximately 3 lakh square feet. The second pillar is selective lease. While we are using deliberately for ultra-premium assets, [indiscernible] not the default. These are signed in 30,000 to 50,000 square foot brackets, live and under construction, and our pipeline here now stands at 7 properties. The strategy here is to build real depth in 5 to 7 core micromarkets and become the #1 operator in each rather than spreading ultra-premium supply thin. The third pillar is partial managed office, our hybrid model that gives us anchor unit economics from day 1 and coworking yield on the balance of the center. We sign a property only once 50% or more seats are already committed at an enterprise or GCC client, with the remainder filled through coworking. What's particularly encouraging is how broadly this format is resonating. We have now signed partial MO clients spanning across auto components players, a mobility platform, a global retail and luxury group, and a technology talent company. 4 very different businesses, 1 format, that's a real validation that this isn't a niche solution. It's a genuinely scalable model. Taken together, these 3 pillars give us 12,000-plus seats on track in H1 of FY '27, and we remain on course to meet our full year supply guidance. Organic growth is the fourth engine, expansion from within our existing client base and one of the most powerful often underappreciated levers we have. We are seeing faster sale velocity with higher renewals across smaller cohorts and larger seat expansion from existing client base. This translated into real velocity this quarter. We sold 13,000 seats in Q1 FY '27 alone, reinforcing the demand across our client base remains large, long tenure, and structurally sticky. More importantly, we continue to see a natural expansion journey within our client base. A customer may initially enter through coworking, subsequently move into managed office solution, and eventually engage Awfis Transform for design and build service. This creates a powerful compounding effect that strengthens customer relationships while increasing wallet share over time. Alongside this, we continue to actively optimize our portfolio where a center no longer meets our return thresholds or fits our premium portfolio strategy, we exit, redeploy capital into better opportunities. This disciplined portfolio management remains one of the key advantages of our capital-light business model. Beyond coworking, our integrated workplace solution platform continues to scale rapidly. In this quarter alone, Transform delivered INR 73 crores in revenue, and we are seeing significantly large mandates as enterprises increasingly engage Awfis for end-to-end workplace solutions. This comes with a INR 200 crores-plus in mandates already won for this year. The cross-sell flywheel underpinning is one of the most powerful aspects of the business. 80% of our external D&B revenue comes from clients who first entered through our flex portfolio, and it works the other way, too. Transform clients are increasingly anchoring for future flex and managed office demand back into the Awfis network. Key wins span a genuine cross-section of enterprise India: a global IT consulting major, 3 lakh square feet; a renewable energy infrastructure group, 1 lakh square feet; global e-commerce major, 67,000 square feet; a diversified conglomerate 65,000 square feet; a global BPO customer experience major at 50,000 square feet. Allied services across IT, F&B, transport, business support continue to scale rapidly as high-margin layer over our core seat economics. This not only validates the strength of our execution capability, but also expands our addressable market well beyond managed workspaces. Together, these 5 growth engines of premiumization, GCC demand, multiformat supply, organic growth, and workplace solutions serve as growth pillars to one another rather than stand-alone initiatives. A premium center attracts a GCC client, a GCC client expands across multiple Awfis locations and adopts additional workplace services. Managed office engagements create opportunities to Transform. Each successful enterprise relationship strengthens our ability to secure future developer partnerships and partial managed office opportunities. Interconnected flywheel is steadily gaining momentum and provides us with a strong foundation for sustainable long-term growth. Finally, our growth continues to be underpinned by strong financial discipline, and this is worth dwelling on for a moment because the scale of what we have built runs directly counter to how much capital we have actually needed. Between Q1 FY '25, the quarter we went public, and Q1 FY '27, we added 59,000 net seats while investing close to INR 400 crores in new center openings. Over this period, revenue grew by 65% from INR 258 crores to INR 425 crores, a 28.3% CAGR, while EBITDA grew to 105% from INR 79 crores to INR 162 crores, a 43.2% CAGR. Despite this expansion and after raising only INR 128 crores through our IPO, we continue to maintain a net cash position with a net debt-to-equity ratio at a negative 0.08x. Put simply, we have deployed more than 3x what we raised at listing entirely through our own operating cash flows without single subsequent capital raise. The discipline shows up in our cost of capital, too. Overall cost of borrowing stands at 9.05%, with an incremental cost of new borrowing even lower at 8.5%. This is a direct reflection of A-plus stable outlook credit rating we carry and further proof that balance sheet strength we have built is being recognized by lenders, not just visible on paper. This reflects the strength of our operating cash flows and demonstrates that Awfis can continue to scale while maintaining industry-leading capital efficiency. Looking ahead to the remainder of FY '27, we remain on track to add 22,000 to 25,000 seats on gross basis for the year. We expect our coworking business to grow by 23% to 25% year-on-year, with Transform continuing to scale at about 20%, taking overall revenue past INR 1,800 crores for the full year. On profitability, we expect cash EBITDA performance to improve in the second half relative to the first, with the full year cash EBITDA in the range of INR 190 crores to INR-200 crores. Looking ahead, we remain confident in the long-term opportunity, our expanding premium portfolio, deepening enterprise and GCC relationships, growing workplace solutions platform, proven ability to serve clients across sizes and sectors, and disciplined capital allocation. Together, these will give us multiple levers for sustained growth. As the flexible workplace industry continues to evolve, we believe Awfis is uniquely positioned to capture this opportunity while continuing to deliver sustainable, profitable, and capital-efficient growth. With that, let me hand over the call to Sumit Lakhani, who will take you through the operational highlights for the quarter in greater detail. Thank you.

Thank you, Amit, and good evening, everyone. Let me walk you through the operational highlights for Q1 FY '27. Our network continued to expand in a disciplined manner during the quarter. As of June 2026, Awfis operated 242 centers across 18 cities, with another 9 centers under fit-out, taking our total network to 251 centers. Including signed LOIs, our pipeline stands at 267 centers. On the seat front, our operational capacity increased to approximately 159,000 seats, while total capacity, including centers under fit-out reached 170,000 seats. Including signed LOIs, our total supply stands at over 185,000 seats. During the quarter, we added approximately 4,600 gross seats against roughly 1,800 seats exited as part of our portfolio consolidation. We remain on track to accelerate additions through the balance of the year as our premium pipeline becomes operational. Consistent with our strategy, virtually all our new supply continues to be concentrated in premium grade A assets across high-demand micromarkets. During the quarter, our Elite portfolio expanded from 8 to 10 centers, while our Gold portfolio remained at 27 centers, further strengthening our premium offerings for enterprise and GCC clients. Before I get into our network metrics, I want to address one development that shaped the quarter's occupancy. One of our enterprise clients with nearly 3,000 seats across 5 centers in 3 cities consolidated its operations into conventional office space in May 2026, following its acquisition by a multinational company roughly 15 months ago. As a result, occupancy across centers operational for more than 12 months stood at 83%, marginally lower than last quarter, while overall portfolio occupancy held steady at 76%, in line with Q4, despite absorbing this 1 exit, which speaks to the underlying strength of demand across the rest of the portfolio. It's also worth remembering that in a business of our scale, 1.5% to 2% of inventory naturally churns every month as enterprise clients expand, consolidate, or relocate. This was simply a larger, more concentrated instance of the same pattern. Importantly, the replacement cycle has already begun. We have precommitted a significant chunk of the vacated capacity, and the balance is seeing healthy traction from enterprises and GCCs evaluating premium workspaces across our network, in several cases at a better pricing than the existing client was paying. On the demand side, our active client base increased to over 3,600 clients. Client stickiness continues to improve. The weighted average client tenure has increased to 38 months, while average lock-in tenure improved to 26 months, providing greater revenue visibility and reinforcing the resilience of our business model. Our enterprise-led positioning remains intact. Corporates and MNCs continue to account for approximately 64% of our client base, supported by a well-diversified mix of SMEs and startups. Sector diversification also remains healthy, with technology, professional services, and BFSI continuing to be key demand drivers during the quarter. Our client base remains deliberately diversified by design rather than by chance. By industry, technology accounts for 39% of our client mix, professional services 21%, manufacturing 12%, BFSI 13%, healthcare and life sciences 5%, with the balance spread across other sectors. No single sector represents an outsized dependency, and our resilient sectors, those less exposed to cyclical downturns, account for over 40% of the base, insulating occupancy through cycles. By domicile, 52% of our clients are India headquartered, driving faster conversions and shorter ramp cycles, while 43% are North American or European headquartered, bringing structured mandates, better tenures, and higher allied services realizations. From a portfolio perspective, we continue to maintain a balanced mix across seat cohorts. Large enterprise clients remain an important part of the network, while smaller and midsized clients continue to provide occupancy velocity and a healthy funnel for future managed office opportunities. Clients with 500-plus seats account for 37% of our portfolio, our most premium and stickiest segment. Let me also give you a fuller picture of our GCC business. As of June 30, we serve 100-plus unique GCC clients contributing 24% of rental revenue across 9 cities in India. The parentage skews heavily towards North American. 79% of our GCC clients are North America headquartered, with 15% from Europe and remaining 6% from Asia and ANZ. Our focus remains deliberately midmarket. These are global enterprises, not legacy captives, and we continue to see strong traction from first-time and early-stage GCCs entering India. We hold clear leadership in the micro and nano categories, which is 25 to 100 seats, and we are increasingly winning large GCC mandates, too, with multiple mandates over 1,000 seats now closed. The client life cycle here follows a predictable pattern. Client typically enters at 25 to 50 seats in coworking or Gold/Elite formats, expand to 100 to 300-plus seats and into managed office as operations mature, and deepen their allied services attachment as tenures lengthen. This is why GCCs choose Awfis specifically, one platform for launch of operations, expansions, workspace strategy, planning, and grade A-plus fit-outs entirely in-house, a single partner across IT, F&B transport, and business support, and longstanding consultant relationships that give us first right to pitch on new mandates. Overall, the operational indicators continue to move in the right direction. We are expanding our premium network in a disciplined manner. Occupancy has held firm despite a one-off client event. Client relationships are becoming deeper and stickier, and the quality of demand remains robust. Combined with our healthy supply pipeline, we believe the business is well positioned to sustain its growth momentum over the coming quarters. With that, I'll hand over the call to Sumit Rochlani for the financial update.

Thank you, Sumit, and good evening, everyone. Let me walk you through the financial performance for Q1 FY '27 in detail. At the outset, from this quarter onwards, we have introduced cash EBITDA as an additional financial metric to provide investors with greater visibility into the underlying operating performance of our business. Over the last few quarters, we have received feedback and suggestions from investors and analysts covering our sector to use cash EBITDA as one of the key metrics. Therefore, we have adopted it as one of the financial metrics going forward to give investors additional view on the financial performance, over and above the reported Ind AS financials and other metrics that we have been reporting. The said metrics have been reported on Slide #20. For the current quarter, the metrics and related reconciliations and adjustments have been validated by MSKA and Associates LLP, which is part of BDO Network, under an agreed-upon procedures engagement as a good corporate governance practice. For the quarter, reported revenue from operations as per Ind AS stood at INR 425 crores, registering a growth of 27% year-on-year. Within this, our coworking and allied services segment grew 27% year-on-year to INR 352 crores. The construction and fit-out services, our Transform business, grew 25% year-on-year to INR 73 crores. Moving to profitability. Reported EBITDA as per Ind AS was INR 162 crores, up 28% year-on-year. The profit before tax as per Ind AS stood at INR 24 crores, up 135% year-on-year. Referring to Slide 20 of the presentation, under Ind AS 116, certain long-term lease arrangements are accounted for as finance leases, which impacts the timing of revenue recognition. Adjusting for these accounting treatments, normalized revenue stood at INR 437 crores, reflecting a healthy 35% growth year-on-year. To better reflect the operating performance of the business, we adjust for finance lease accounting, deduct the actual cash lease rentals paid during the quarter and exclude noncash ESOP expense. On this basis, cash EBITDA stood at INR 44 crores, up approximately 34% year-on-year, with the cash EBITDA margins at 10.1%. Operating PBT stood at INR 11 crores compared to INR 10 crores in the corresponding quarter last year. Our balance sheet remains in excellent shape. We continue to maintain a net cash position with net debt to equity at-0.08x, reinforcing the financial discipline that underpins our growth. On returns, ROCE sustained at 55%. Just as importantly, our revenue to gross fixed assets ratio came in at 1.5x. Overall, the quarter reflects continued healthy growth in our core business and improving profitability. With that, we conclude our opening remarks and would like to open the floor for questions and answers.

[Operator Instructions] The first question is from the line of Shamit Ashar from Ambit.

Hello, am I audible?

Yes, sir.

So I wanted to know, if you look at your Q4 and Q1, so your rental payments have increased from INR 85 crores to INR 130-odd crores and seats have been -- I mean the net seat additions have been in the range of 3,000 to 4,000. So can you please explain the jump in the rental payments? And secondly, I want to know is your strategy of going for straight lease benefiting you because clearly the margins aren't showing up. So will you continue to go more towards straight lease because even if you look at your occupancies, they are kind of constant in the range of 76% since the last 2, 3 quarters? So please, could you just highlight what is going on and what is your strategy going forward?

To answer your first question, you're taking these numbers from the cash flow. Part of our rental expenses are also disclosed in the other expenses. The other expenses, if you look at the detailed financials when they are available, the rental expenses in the other expenses have not grown, or rather they are flat. So the rental expenses that are part of other expenses primarily includes the rental paid as profits on managed aggregation model and as well as rental paid on the lease transactions where we were out of lock-in, which means that we were not doing the accounting for those leases under 116. And rental was being accounted as it would get accounted in pre-Ind AS era. So if you now consider both, then the growth or the growth percentage is in line with the growth in the seats. I hope I answered your question.

The second part of your question, let me take that. So the blended occupancy obviously has held flat at 76%, matching the Q4 despite us having to absorb 1 large enterprise consolidation, which Sumit mentioned. And that's a sign of real underlying strength, not a stumble. The mature cohort dipped marginally to 83% from 84%, entirely attributable to that same one-off exit. We have already precommitted significant chunk of the vacated capacity through signed agreements, not just conversation, and several cases at a better pricing than before. That gives us real confidence in recovery path rather than just hope here. And had that single client not exited, we would have been on track to show clear improvement across both the occupancy metrics.

Hello, Shamit sir, is your question answered?

Yes. And I also wanted to know, like, managed aggregation model is like your core -- strength, and since last quarter even it was 62% and now it's, I think, 57%. So now just want to know that will you keep continue doing more of straight lease going forward for the rest of the quarters?

So managed aggregation continues to be an important part of our supply strategy, accounting for 57% of our current supply, as you mentioned. We are not fixated on the MA split versus the SL split. We let the market and the specific opportunity decide this for us. We are becoming obviously more selective overall, choosing whichever structure, MA developer partnership, or selective lease, that delivers the best realization for us and the risk profile for a given asset in a micromarket, rather than forcing every deal into one lease type. This is not a shift from MA, let me just be clear here. It is broadening of the playbook. Commercial real estate obviously moves in cycles, and the right lease structure for a given micromarket or an asset changes as those cycles do. So [indiscernible] is reduced intentionally, reserved deliberately for a handful of ultra-premium anchor value micromarkets. And within our MA model, we are utilizing both developer partnerships and classic MA to secure quality and low-risk supply together. Together, these give us more tools to capture demand profitably across a wide range of situations.

And just one last small question. What would be your overall CapEx guidance for FY '27?

So that CapEx guidance would be roughly in the range of about INR 200 crores to INR 210 crores.

The next question is from the line of Yashas Gilganchi from Bank of Baroda Capital Markets.

I'd like to know more about your developer partnerships. So to start with, at what stage of construction do you sign these deals. More specifically, from the date of signing, when is a typical office asset expected to be delivered?

So these are different across various deals. Now specifically with respect to the developer partnerships, which are -- and why we are calling it partnerships than a simple supply acquisition is because this entails a situation where we are making the supply acquisition risk-averse and capital efficient, where the developer is also investing into the -- capital into the fit-outs as well as giving us more preferable rent freeze as well as participating in the overall profit share. Broadly, the way we are looking at it is a couple of these properties will go live over a period of 6 months to next 12 months where these properties will go live. And these I'm talking about are the buildings going live. So our centers could go live between 9- to 15-odd months kind of scenario. Second, in terms of a couple of premium straight lease centers, which we are signing across various grade A properties, few of them we are signing up are in ready-to-move properties, but a few of them we are signing across in various forward leasing structures where the buildings are under various stages of construction. So as you know, we are on the path of working across a premium business model. So we are also taking a phase-wise approach of picking up these properties. But the idea is to lock the grade A-plus supply across the no-brainer kind of micromarkets right now. And these we are signing up with properties which are going live from next 6-odd months to next 24-odd months. So that's been the strategy from our side. But the core is we want to lock the strategic supply across the key micromarkets across the new upcoming assets.

Just a little bit more on this. Furthermore, what do Awfis's typical capital contributions to these projects look like over the 6 to 12 months that you mentioned? And lastly, under these partnerships, how long does Awfis have access to the space?

Sorry, the second part of it, how long the lease -- can you repeat the second part of your question?

Yes, sure. Under such partnerships, how long does Awfis have access to the space to lease out, let's say, to your tenants?

So in terms of the -- our capital contribution ranges from around 50-odd-percent of the overall fit-out value day 1. It's a small kind of a security deposit, which gets committed till the property goes live. So from that perspective, it's not very capital-intensive day 1 at the time of signing. In terms of clients, we look at marketing these properties almost about 4 to 6 months before the center goes live. Does that answer your question?

Yes. No, actually, just on the last bit, like I meant to ask, let's say, you sign this partnership and you get access to the space, how long do you have access to the space? What is your tenant tenure with the landlord?

Okay. So we are signing up 9-year agreements with these properties, the 9-year tenure around on these properties. And our excess starts from the date of signing where the property is under construction, and the 9 years starts from the day when the OC of the building is received, and we get the possession of the property.

[Operator Instructions] The next question is from the line of Shrenik Mehta from IndoAlps Wealth.

So my question here is, the chargeable area went from around almost 5 million square feet to 8.4 million square feet over the last 8 quarters. It's up almost 68%, whereas the revenue went up from INR 258 crores to INR 425 crores. It's up only 65%. So the revenue is growing slower than the area. So per square feet revenue is probably stable to declining. So can you give us a little bit idea about the operational seat per month cost between, say, Q1 FY '25, Q1 FY '26, and Q1 FY '27, and some insight into what is really leading to this fairly stable kind of a revenue on a per square foot basis?

Sure. So Shrenik, I would like to correct you around on this analysis where 68% versus 65%, because one, this chargeable area also includes the seats which are under fit-out. So those seats are not live. But it's an interesting kind of metrics which you put across. And I would want to highlight one point. The net seats in Q1 of FY '25 were about 100,000, which at the end of Q1 FY '27 are 159, 000, which is 59% is the net operational seat increase. Now corresponding to this 59% net seat increase, we had a 65% kind of revenue growth. So from that perspective, we are doing well. And on top of it, if you factor in 76% as a blended occupancy, so revenue growth clearly is going to outgrow in terms of the overall seat growth as well.

Okay. But in this period, Sumit, you've also increased the number of Gold centers. You have 37 Gold centers and Elite Centers where probably the cost per seat would be much higher, right? In the other markets or other setups, do you see almost flat prices because the market is so robust. I mean we should expect price to go up on a per square foot basis much more?