Managed office provider Smartworks has lifted its fiscal 2027 revenue growth guidance to 33-35% following a strong second quarter. The company reported a 39% revenue jump to Rs 591 crore, driven by robust leasing activity from large enterprises and Global Capability Centres.
Smartworks has revised its fiscal 2027 revenue growth guidance upward to a range of 33-35% following a strong financial performance in the second quarter. The managed office space provider reported a 39% year-on-year increase in revenue, which reached Rs 591 crore. Profitability also improved during the quarter, with net profit rising 136% to Rs 43.4 crore, while EBITDA grew by 68% to Rs 117 crore.
Enterprise and GCC Demand Driving Growth
The company’s growth is largely supported by a shift toward long-term contracts with large enterprises, which now account for 91% of its total rental revenue. A significant contributor to this trend is the demand for office space from Global Capability Centres (GCCs). These centres, which are international offices set up by global firms in India, currently make up 22% of the company's rental revenue. This aligns with the broader sector trend where large multinational corporations are increasingly opting for flexible, managed office solutions rather than traditional leases, allowing them to scale operations quickly without large capital commitments.
Furthermore, there has been a notable shift toward larger offices. Occupants requiring more than 1,000 seats now represent 41% of the company's rental revenue, compared to 35% in the previous year. This indicates that the company is effectively capturing the market for high-capacity, move-in-ready office setups.
Aggressive Expansion Plans
To keep up with corporate demand, Smartworks is scaling its physical presence. The company currently manages a footprint of 17.5 million sq. ft. across 71 centres. Management intends to add between 2.5 million and 3 million sq. ft. of new space each year. Two major new projects, the Eastside campus in Pune and the Eastbridge campus in Mumbai, are scheduled to begin operations in the second half of fiscal year 2027.
While the expansion plans are ambitious, investors should keep in mind that aggressive growth in the managed office sector involves significant capital spending. The success of these new campuses will depend on the company's ability to maintain high occupancy rates and manage costs effectively as it grows. The office leasing market remains competitive, and any delay in launching new campuses or a slowdown in corporate hiring could put pressure on margins. The key monitorable for stakeholders will be the successful commissioning of the Pune and Mumbai campuses and the company's ability to maintain its profit margins while scaling operations.