Awfis Space Solutions Ltd (NSE: AWFIS) Q1 2026 Earnings Call dated Aug. 11, 2025
Corporate Participants:
Unidentified Speaker
Amit Ramani — Chairman and Managing Director
Sumit Lakhani — Chief Executive Officer
Ravi Dugar — Chief Financial Officer
Analysts:
Unidentified Participant
Adhidev — Analyst
Girish Choudhary — Analyst
Chintan Sheth — Analyst
Aayush Saboo — Analyst
Shivkumar Prajapati — Analyst
Vikrant Kashyap — Analyst
Yashowardhan Agarwal — Analyst
Abhishek Khanna — Analyst
Shamit Asar — Analyst
Pranav Shrimal — Analyst
Devang Patel — Analyst
Presentation:
operator
Ladies and Gentlemen, good day and welcome to Office Space Solutions Limited Q1 FY26 earnings conference call hosted by Asian Market Securities. 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. The statements are not guarantee of future performance and involve risk and uncertainty uncertainties that are difficult to predict. As a reminder, all participants line will be in listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on your touchstone phone.
Please note that this conference has been recorded. I now hand over the conference to Mr. Amitramani, chairman and Managing Director from Office Space. Thank you and over to you sir.
Amit Ramani — Chairman and Managing Director
Thank you. Good afternoon and a very warm welcome to everyone present on the call. Along with me I have Mr. Sumit Lakhani, our Chief Executive Officer, Mr. Ravi Dugar, our Chief Financial Officer and SGA, our Investor Relations Advisor for Q1FY26 results. We have uploaded our presentation on the exchanges and I hope everybody had an opportunity to go through the same. Let me start with a brief overview of the business for the year. We are pleased to share that we have begun FY26 on a strong note delivering a robust financial performance that reflects the strength of the business model and execution capability.
Our revenue for the quarter grew by 30% year on year reaching a total of 335 crores driven by sustained demand and healthy occupancy levels across our centers. We also witnessed strong operating momentum at the EBITDA level. EBITDA rose by 6 percentage points 60% year on year to 127 crores with margins expanding to 37.8% marking a significant improvement of 710 basis points compared to the same period last year. This margin expansion was supported by better occupancy, enhanced operating leverage, improved cost efficiencies and disciplined execution across segments. The performance highlights not only the resilience of our platform but also our ability to scale profitably while staying focused on service quality, client experience and capital efficiency.
During the year, our co working and allied services delivered robust growth of 49% year on year to 276 crores. This performance was driven by focusing on diverse cohort split, making customer centricity as a core of our business along with strong momentum in our allied services business. This segment remains a cornerstone of our strategy Driven by a growing demand for flexible workplace solutions, our enterprise segment continues to be a key growth driver fueled by strong momentum from first time mid sized GCC entrance, especially across our center in Bengaluru and Hyderabad. At the same time, our existing GCC clients have continued to deepen our engagement with us expanding into additional spaces, particularly in our newly launched centers in Hyderabad.
Our 100 plus seat cohort now represents 59% of our portfolio, underscoring both the scale and the stickiness of our enterprise relationships. This reinforces our strong value proposition and highlight how our multi city presence enables us to meet the evolving need of enterprise clients across locations. Meanwhile, construction fit out projects has delivered a 58 crore revenue. We see this segment gaining significant traction in the coming quarters, buoyed by healthy order pipeline and a favorable market outlook and remain confident of meeting our full year guidance. Our operational performance remains strong with seed capacity addition up 40% year on year, reflecting the effectiveness and scalability of our expansion strategy.
A key pillar of this expansion has been our focus on premium positioning with 100% of our new centers signed between June 22, 2024 and June 2025 located in grade A commercial assets. This is a deliberate and strategic shift aimed at addressing the need of a more discerning and quality focused clientele including GCC while also ensuring long term asset sustainability and tenant retention. We have also continued to strengthen our national presence. Since June 24th we launched four new Tier 2 centers increasing our Tier 2 capacity by 25% year on year. Further, we entered four emerging micro markets across our network, further broadening our footprint.
Our approach to network expansion remains strategic, focused on markets where we see strong long term potential. Looking ahead, we aim to build on this momentum with robust pipeline of opportunities across both metro and emerging locations. As previously guided, our approach for FY26 continues to be two prong strategy. The focus in the first half remains in executing the current pipeline, driving higher occupancy across centers and enhancing operational productivity. Having already secured significant number of seat sales scheduled for occupancy in the coming quarters, we have strong visibility on near term revenues. Looking ahead to the second half of the year, we plan to undertake strategic and calibrated capacity expansion looking at demand visibility, market potential and capital efficiency.
This disciplined approach will not only reinforce our leadership position in the flex based industry but also ensure we remain on sustainable growth trajectory creating long term value for all stakeholders. Let me hand over the call to Mr. Sumit Laqani, our CEO to share Q1FY26 operational highlights thank you Amit.
Sumit Lakhani — Chief Executive Officer
Good evening everyone. I would like to share with you the operational highlights for Q1 FY26. On the supply side, during the quarter we added 6065 new operational seats bringing our total capacity to about 140,186 operational seats across 220 centers span India as of June 2025, including centers currently in the fit out phase and those under LOI, our total capacity now stands at over 165,000 seats across 246 centers covering an expansive 8.3 million square feet. Over the past year we have added a total of 47 centers and 43,452 total seats, underscoring our ability to meet the growing demand for high quality flexible workspaces nationwide.
As of June 2025, our exit month occupancy stood at 73% while centres operational for over 12 months achieved a robust 84% occupancy. This performance, despite the significant addition of new seats during FY25 underscores the sustained demand for our premium workspace solutions. Year on year, our growth remains strong. Operational seats and center grew by 40% and 30% respectively. Total seats and centres increased by 39% and 45% respectively. Looking ahead, we have a pipeline with signed Lois for 14 new centers adding approximately 9,800 seats and 0.5 million square feet of chargeable area. On the demand side, we signed contracts for 15,000 new seats in Q1 FY26 demonstrating strong performance on the demand front versus 11,000 seats in Q1 of FY 2025.
Notably, 41% of our clients operate across multiple centers within our network versus 36% in Q1 of FY 2025. The average client tenure has increased to 36 months with an average lock in period of 24 months, demonstrating strong long term client commitment. Our client base remains highly diversified with more than 3,200 active clients. As of June 30, 2025 we have approximately 18,000 seats already signed which are scheduled to move in during Q2 and Q3. This translates to a logged in revenue of 463 crores. Our enterprise portfolio continues to strengthen with 51 clients taking over 100 seats each and nine clients taking over 300 seats each, all already committed to move in.
That concludes my update I’ll now hand over to Ravi, our CFO for the financial discussion.
Ravi Dugar — Chief Financial Officer
Thanks Sumit. Good afternoon everyone and a very warm welcome to everyone. Let me give you a quick overview on our financial performance for FY Q1 FY26, our consolidated operating revenue stood at rupees 335 crore which is a strong growth of 30% on a year. On year basis, the operating EBITDA stood at 127 crores which is a growth of 60%. On a YoY basis, the margin stood at 37.8% as against 30.7% in Q1 of last year which is a growth of 710bps in Q1. FY26 are packed with is rupees 10 crore versus a profit of rupees 3 crore in Q1 of last year.
On the IGAAP equivalent basis which is adjusted for India’s 116 on lease rentals and India’s 109 and 102. The Q1FY26, our consolidated operating revenue stood at 335 crore again a growth of 30%. On a YoY basis, the operating EBITDA stood at rupees 48 crores which is a growth of sixty percent. On a YoY basis the margin stood 14.5% as against 11.5% in Q1 of FY25 which is a growth of 300bps. For Q1FY26. IGAAP equivalent depreciation stood at INR 27 crores in Q1. FY26 PAT is 25 crore versus rupees 15 crores in Q1 of last year.
We continue to maintain a very strong liquidity position. Our gross debt stood at around rupees 7 crores resulting in the debt equity ratio of 0.02. A notable improvement from 0.08 in Q1 of last year. Additionally, our net debt to equity ratio is minus 0.18. With continued improvement in profitability and liquidity we expect to remain in a very comfortable position. On debt equity ratio. A return to capital employed is at 67% annualized for Q1 versus A 62% for the whole of financial year 25 underscoring the strength of our financial performance. That is all. From our end, we now open the floor for Q and A.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press STAR and two Participants are requested to use handsets with while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Abhide from ICICI securities. Please go ahead.
Adhidev
Yeah, good Evening everyone. Thank you for the opportunity. So first is mainly a housekeeping question. Could you elaborate on the capex we have incurred for this quarter and any guidance for the year overall depending on how our seed addition pipeline is looking? That is the first question.
Sumit Lakhani
So for the quarter. Hi. For the quarter the capex what we have incurred is around 50 crores. And the guidance, and the guidance is we will we continue to see very strong momentum across all our sectors and depending on the need in the coming financial year the company will continue to evaluate the capex spends depending on our growth aspirations.
Adhidev
Okay. So if we take a broader view this will be equivalent to 200 crores or more in the coming year as well.
Sumit Lakhani
It would be in the same line. Yeah. As last year.
Adhidev
Okay. Okay. So my second question is on our operating margins now. Do you see a potential for further what is improvement in margins in the coming years? It’s more a structural question. It’s not limited to a quarter considering you mentioned that we are adding more and more premium office spaces. Right. In more grade A buildings. So do you expect the overall profile to again go upwards over a longer term? Yeah. Thank you.
Sumit Lakhani
So with respect to the overall margin view, the way we look at is over the next couple of years we are looking for margin expansion because of one, the blended occupancy going up, it will be the largest contributor for it. If you look at currently because we are almost a large number of our seats are less than 12 odd months. So the blended is currently about 73 odd percent in next to four quarters. We expect this percentage to keep on changing and there will be much more mature centers around. So we expect a significant level of margin expansion in long term over the next one to three years just by a change in the blended occupancy.
Second, we expect an improvement in margins primarily from the operating leverage as well. And the third one as you mentioned is we are on a drive to for premiumization with more number of elite and gold center coming up which will have impact on the margins. And the last point I would say is where we are very focused is increasing our allied services which is framed at tech offerings, FNB offering which we provide as integrated to our customers that will also help around in the margin. So structurally we are in a trajectory for margin expansion over the next two, three years.
Adhidev
Okay. Okay, sure, fine. Now that is pretty helpful. I’ll come back if I have more questions here. Thank you. And all the best.
operator
Thank you. The next question is from the line of Girish Chaudhary from Evander Spark, please go ahead.
Girish Choudhary
Yeah. Hi Amit, Sumit and Ravi again. I just wanted to understand the margins better like you just mentioned about the structural scope for increase. But if you could help us with understanding the current margin structure in the mature centers currently you’re operating with and also what the kind of drag which is coming in from newer assets that will be helpful and will help us understand much better the scope for expansion.
Sumit Lakhani
Sure. So, so this is more on a pure play, fundamentals based how we look at the business and at a ideal center kind of, you know, unit economics, any center which hits a mature stage. So let’s say a 12 month plus kind of a vintage for us. In a straight lease model we generally look at center EBITDA margins of about 30 to 35% for that center. For a managed aggregation closer to about 23 to 25%. So on a blended basis between MA and SLR view is about, you know, 27 to 28 odd percent. As a blended kind of a contribution margin for these centers now it takes us at least around 9 to 10 odd months to hit about 80, 85% of occupancy.
So the portfolio of new centers have a kind of a, you know, a drag even while we get some level of rent freeze or decent level of rent freeze for initial occupancy buildup. But they still have a kind of a drag on the overall margin. If you look at our current, you know, center profile as of today, Approximately almost about 30 to 32% of our seats would be under the bucket, which would be less than 12 months of vintage. So we expect that, you know, once these centers hit almost about 12 months plus kind of, you know, vintage and with the improved kind of occupancy, the margins are going to improve.
Second point, Girish, like I mentioned in my commentary, we already have signed up, you know, almost about 18,000 seats which will go live in Q2 and Q3 and this, I’m saying the demand. So we have signed up clients, you know, across 18,000 odd seats which will go live in Q2 and Q3. So this is a significant level of, you know, seats as a sign up, which we have done. So this is by Q3 end I’m expecting an improvement around in the blended occupancy as well overall. And yeah, so this is how we primarily look at the business though Q3 and Q4 will also be the quarters where our supply expansions also go around on a larger scale.
Girish Choudhary
In terms of corporate overhead. Where are we? And we also mentioned about the operating leverage right so how should we see that going ahead?
Ravi Dugar
So like in the last quarter we mentioned that we the overall way we look at is almost about generally annually about 0.2 to 0.5 odd percent kind of improvement in margins because of corporate overhead efficiencies. Specifically for this year the kind of overall guidance we have done in terms of the EBITDA margins is similar to last year because we have built up a decent level of teams and put in resources for long term growth of the company. And the overall guidance around on the margins which also factor in some kind of operating leverage from corporate overhead is supposed to be same as of FY25 with a bit of a upward bias.
Girish Choudhary
Sure, sure. My second question is on the construction and fit out business. You mentioned then the opening remarks about a strong pipeline. If you can share any number, what’s the order book like and what’s the cycle for that order book?
Sumit Lakhani
So yeah, so Girish, this is obviously very strong demand in this segment. The better we are looking at the segment is on a half or a yearly basis and clearly there’s a bit of a time gap right. On how when you have the project and the revenue delivery. The current number was 58 crores and for Q1 FY26 and essentially we are currently looking at underlying demand is healthy and we have a strong execution by now over 100 plus crores and obviously are confident of a strong growth in FY26.
Girish Choudhary
So the current order book is 100 crores. Right. So that’s the.
Ravi Dugar
Yeah. So Q1 FY26 number was 5860 odd crores and then the order book is about 100 plus crores.
Girish Choudhary
Sure, sure. All right. Thank you sir. And all the best.
Sumit Lakhani
Thank you.
operator
Thank you. The next question is from the line of Chintan Seb from Giric Capital.
Chintan Sheth
Hi. I think congrats on a good set of numbers. The question was on the bookkeeping side, what was the rental profit shares paid to the landlord during the quarter for the current quarter.
Ravi Dugar
So the profit share what we have paid is 20 crores and the total rental paid is around 94 crores.
Chintan Sheth
94 crores of which 80 crores was was the cash adjustments in the INDS table you have mentioned. Right. In the presentation.
Ravi Dugar
Yeah. So the total rental paid is 94 out of which 20 crore is part of the other expenses and 74 is part of the lease rental payment under India 116.
Chintan Sheth
Okay. And what was this amount last year? I believe.
Ravi Dugar
So the total last year.
Chintan Sheth
Number was around 111 crore. Right. You’re talking about year four, full year was 111. I’m talking about quarterly because it seems a little low. Yeah.
Sumit Lakhani
Okay, just give me two minutes, I’ll. Give you that number.
Chintan Sheth
Sure. And second is on the occupancy which we reported for the current quarter 73%. We were kind of looking at you know focusing on, on improving the occupancy and we were also looking at msc, you know the straight leads coming in. If you look at the mix in the, in the current quarter straight list share has increased in the overall pie. That should reflect on the, in the improvement in the occupancy. But it didn’t. So if you can just elaborate a little bit on that as well would be helpful.
Sumit Lakhani
If you look at the occupancy level. It has to be look in the context of the overall new seats added now almost as I mentioned, about 30% of our seats currently are less than you know, 12 months old. So they are in going through various phases of occupancy build up. Second, I’m not able to understand your question. Around on the straight lease versus ma. The MA continues around in a similar kind of a ratio as of between straight leads and you know, MA mix. These straight leases which we are signing, couple of them are also, you know not on a where we are building up the occupancy in those.
So they are not generally pure play back to back kind of state leases.
Chintan Sheth
Okay, got it.
Sumit Lakhani
Q2 and Q3 like I mentioned we have a decent, a very strong pipeline of signed clients. A lot of them are under the back to back kind of scenario. So that’s where a couple of those street leases are coming up.
Chintan Sheth
Got it. And lastly on the allied services for the current quarter if you can provide that number. And we have also launched few of the you know, allied services in the last quarter like the CAD services plus network support services and other related ancillary services. How those are doing if you can elaborate on that.
Ravi Dugar
So in Q1 FY26 the Allied Services revenue grew about 43% year on year approximately it’s about 45 odd crores for the quarter. Okay, obviously. Sorry, I’ll just take that back. How much was the total for quarter?
Chintan Sheth
For the quarter?
Unidentified Speaker
For the quarter?
Sumit Lakhani
For this quarter it’s around 36.
Ravi Dugar
It’s about 36. Sorry, I take that back. Crore. And obviously driven by deeper penetration within the existing client base. I focus on you know obviously delivering value around FNB Tech Labs has taken off well Mobility products are doing fairly well and then we obviously had started Employee transportation as well in partnership with Ecos Mobility. So I think all of this has kind of resulted in this 43% year on year growth that’s out there.
Chintan Sheth
Okay, 43% year in growth and absolute amount is 36% then if I look at the core co working space sales it seems that sequentially occupied seat revenue per seat revenue has moderator quite a bit from 8,400 to 7,800. This is probably because of mix or I’m looking at occupied so it factors in the occupancy as well. So if you can. You know. Because if I look at adjusting the ancillary revenue the revenue sequentially are flat at 240 odd crores out of the total 276 crore we reported. If I adjust the 36 crore which you just mentioned we added 240 crore of core space revenue which is more or more or less similar to last quarter.
So despite fleet getting added, you know during the quarter our sales are more or less flat which implies that dentals has kind of moderated. If you can just. I’m trying to just.
Sumit Lakhani
There is no underlying decrease in the average seat price rather kind over the last couple of quarters what we have seen is a constant increase in the same center seat pricing because the underlying rentals in commercial real estate have increased. So there is no kind of a. There’s no decrease rather it’s on a upward trend. The overall price realization what. When we look at the price realization per seat it also gets a bit skewed around on in that quarter the new centers which come around in which kind of micro markets. Because if they’re coming in micro markets with lower rentals use it a bit.
Second it also. @ what time of the quarter is the occupancy coming in? In the third month more kind of occupancy coming in. So it skews around on the overall aspect. So if you primarily see we. We don’t have any kind of a decrease in a seat pricing.
Chintan Sheth
Got it. And just coming back to the rental.
Sumit Lakhani
Above, I will tell you with respect to the rental, probably one of the reason why you are seeing a kind of a shift in terms of the. Or a similar kind of a co working space revenue is we had a large customer signed up which we have signed up for almost about three odd quarters and this quarter was where the exit of that customer happened and it had an impact of almost about. Closer to about 5 to 6 odd crores. On the. Which we. Yeah. On the revenue.
Chintan Sheth
Okay. And no, I’m. I’m asking on the profit share you mentioned 20 crore. If you can give me Q4 and last year sequential and YY number of the profit share number would be helpful.
Ravi Dugar
That’s all from take down the Numbers. So for Q1 linked here the India’s 113 rental is 95 cr. The other expense which is the profit share is 27. So that makes it around 122 crores. Of payout total pay outside.
Girish Choudhary
Okay, 27 is and if you can provide similar numbers for the last year and quarter and last quarter sequentially last.
Ravi Dugar
Quarter the number is against 122 we paid around 100108 crores. The breakup of which is India’s 116 is 77 and the profit share remaining.
Chintan Sheth
It has declined. Okay and last year Q1.
Ravi Dugar
Okay, last year given again. I’ll have to take it out. Just give me a.
Chintan Sheth
Okay, okay, I’ll join back in here. You can separately give me. Thanks, thanks, thanks. All the very best sir.
Sumit Lakhani
Thank you.
operator
Thank you. The next question is from the line of Ayush Sabu from Choice Institutional Equities. Please go ahead.
Aayush Saboo
Yeah, hi, I want to know like regarding a seat addition target for the next year, do we see any upside to it? And also if you could just elaborate on how is the competitive, competitive intensity, you know, shaping up in our critical micro market sense, you know, what are the risk mitigation strategies that we are developing to face this increased cost position overall in the flexible working space.
Ravi Dugar
So broadly speaking our guidance remains the same as last year. So what we had done last year, about 40 odd thousand seats is the guidance for FY26 as well. In terms of the competitive landscape I think because of our model being a bit different than most of the flex operators one in terms of size, our typical size is between 30, 35,000 odd square feet which is bit different than what most others compete for. Second, our model obviously looks at you know, doing a split of 65% manage aggregation 35% straightly. So our profit share model obviously being unique is one of a kind and I think is allowing us to continue to expand and you’ve seen that over the last almost year plus that we have been able to maintain that sort of mix there.
So from that standpoint I don’t think we see any challenges in terms of continuing to add our seat capacity. And the guidance remains the same as last year.
Aayush Saboo
Okay, so 40,000 seats in the next two years, right?
Sumit Lakhani
No, over FY26.
Aayush Saboo
Over FY26.
Ravi Dugar
Approximately 40,000 seats for FY25. The same guidance remains for FY26.
operator
Thank you. The next question is from the line of Shivkumar Prajapati from Ambit and Investment Advisors. Please go ahead.
Shivkumar Prajapati
Yeah. Yes. Hi sir. Thanks for having my question. First of all, congratulations on a great set of numbers. So my first question is on sector exposure. I believe around close to 50% of our top line comes from IT and IT enabled services and currently some layoffs has been announced. So I just want to understand what impact does this have on us and going forward how we plan to deal with these things. And if you could share the churn rate sector wise, that would be really helpful.
Sumit Lakhani
So to answer the first part of your question, you know we currently have about 35 to about 37% of our business comes from itits overall 65% is from large enterprises and corporates and then obviously in addition about 10% comes from BFSI, 10 from consulting and then from sort of other service offerings. Right. So we have a diverse base of this happening. You know, currently in terms of it, if you really look at it from the outside it all looks as one. Right. But there are three parts to the IT that is there which is essential.
We are looking at the India facing it which is 1/3 the GCC which is seeing a huge growth and then obviously it, you are absolutely right that in some of the IT which was the offshoring part of it there is some bit of challenge that is there but all other the two segments. So the India facing as well as the GCC has kind of filled up that demand. So we don’t anticipate any challenges coming overall from an industry standpoint. And currently also we are seeing in the last few quarters any, you know, changes to that as well.
Shivkumar Prajapati
Okay, great. So I mean there are no issues in contract renewables or any cancellations from these sectors.
Sumit Lakhani
Right. So by specific, by sector we don’t see any, you know, challenge and typically our churn is roughly about one odd percent. Right. So it continues to remain in that range. So I don’t see any challenges in the, you know, in the first quarter itself.
Shivkumar Prajapati
Great. My next question is like few new IPOs are in the market which are, you know, largely traditional lease models. So are we experiencing any pricing pressure in any of the markets or you know, any expected pricing pressure in the coming time? And we like will we be able to maintain our 9,000 plus of you know, per se realization given we have a like most of our centers, you know, are in grade A set assets in the last one year. So just want to understand this 9,000 realization per se. Where can we see this at the end of FY26?
Sumit Lakhani
So to answer first part of your question on the competitive landscape, obviously the competition has been there in private as well as public. Right. Obviously now we see a few of our other, you know, sort of counterparts going public. So I don’t think the competition intensity has not been there. It’s been there for the last, I would say five odd years since we have had a great run post the blip in Covid and the flex has established itself as a, you know, as a, as a part of the commercial real estate market. So I think from that standpoint, I don’t see any changes from that tent as far as the 9,000 goes. That is a factor clearly of the micro market rental.
And I think the micro market rentals have been robust over the last couple of years. I think we have seen one of the best years last year for commercial leasing and also for flex space. So from that standpoint, I don’t anticipate any challenge on the maintaining or upping the perceived price. I probably cannot give you a specific guidance on the FY26 end of the year number, but clearly maintaining or having upward bias towards that number I don’t think has been a challenge. And it’s been demonstrated over the last few years as well.
Shivkumar Prajapati
All right. And sir, did we benchmark ourselves with the peers? I mean, in case of cost per seat like Capex, Opex or return ratios, if you could, you know, highlight few of the positives that we stand out against the peers.
Sumit Lakhani
So it’s very hard to kind of compare without a context. Right. I mean our model is very, very different, you know, for us, clearly our managed aggregation continues to remain one of our hallmarks. We have been able to prove that for the last few years to maintain the kind of, you know, the capacity addition that we have done. Second, the network, you know, currently 210 odd centers that are live, there are another, you know, 30, 40 that are on the horizon. So 250 plus centers, 18 cities, you know, almost 60 plus micro markets. That gives us a very different edge.
And you know, clearly something that we continue to focus on the client diversity. We demand diversity. We have a healthy mix of more than 100 seats, about 49%, 41% is less than 100 seats. So we service every type of customer, every type of cohort in the market. And then clearly I think the customer centricity obviously is at the core of it. And hence today we are able to service 3,200 client companies in the portfolio. Right. Which is probably a large portion of private and publicly listed companies. So from that standpoint I think these are the key differentiators.
We don’t benchmark specifically on specific metrics clearly but you know these are kind of the differentiators for us.
Shivkumar Prajapati
And so my last question is like in retail business we track same sales growth to understand, you know like the real growth of the business. So in, in this do we track some same center revenue growth kind of thing? I mean if you can share the growth for mature centers on yoy basis.
Ravi Dugar
On an annual basis while we are not, you know, tracking and reporting the SSG aspect. But if you look at the fundamental business because the, the customer cohort comes at different time of the year but on every contract there’s an escalation clause. Also on average from every customer we end up getting on a blended average about 5 odd percent kind of annual escalation. It could be generally between 3 to 5% for larger cohort and between 5 to 7 odd percent for a smaller cohort. And we see the margins generally intact or having a bit better around in the coming years.
So we see the mature centers give a better kind of overall margin as well as a revenue profile.
Shivkumar Prajapati
Yeah, that’s helpful sir, thank you so much. Best of luck.
operator
Thank you. Participants are Requested to limit 2 questions per participant and come back in the queue for a follow up. The next question is from the line of Vikrant Kashyapur from Asian Market Securities. Please go ahead.
Vikrant Kashyap
Good evening and congrats on a strong set of number. You, you highlighted a strong growth in co working space this quarter and just wanted to know what are the demand growth drivers for in this segment and how sustainable are they? Are you able to maintain such kind of growth going forward in this year?
Sumit Lakhani
And again yeah see like the CO working segment grew by 49% year on year and so it was primarily driven through strong seat sales momentum and then better occupancy in various centers and disciplined capacity expansion into grade A assets. If you look at in Q1 alone we have sold 15,000 new seats. Further we have approximately 18,000 client seats which are sold, signed and which are scheduled to move in during Q2 and Q3 and this is expected to generate a locked in revenue of almost about 463 crores. We’ve also seen strong momentum from first time GCC entrants, companies like ABC Fitness, Meltwater amongst other.
They’re signing up for multi market presence along with us and especially in Key micro markets in Bangalore and Hyderabad. And so Elite product launch also has given boost to this Momentum for larger MNCs and GCCs signing up with us. And so we expect the co working segment growth momentum to remain strong through the remaining FY26 as well.
Vikrant Kashyap
Okay, my second question on your Elite. So how many seats are under Elite portfolio? And going ahead during FY26 and 27. How many seats we are expected to. Add under official Elite version?
Sumit Lakhani
So as of now we have three centers live in Elite which are approximately closer to about, you could say 2800 to, you know 3000 odd seats would be across these three centers. For the remaining part of the year we are expecting to add closer to three to four more centers.
Vikrant Kashyap
Thank you and wish you best of luck.
operator
Thank you. The next question is from the line of Yashvardhan Agrawal from IIFL Capital Services. Please go ahead.
Yashowardhan Agarwal
Yeah, am I audible? Yes, Hello. Yes. Earlier we had proved that contribution model is around 23 to 25%. Between 30 to 35% for SM and blended contribution margin for the center level would be 27 to 28%. And what are the cost between EBITDA and contribution margin? Can you please.
Ravi Dugar
So yes, what I explained over there is a scenario with respect to an ideal center once it hits maturity. So in an ideal scenario when we get about 27% or 20 across the whole portfolio we expect and I’m talking more about, you know, a bit more a long term kind of situation where we where the percentage of mature centers to the total portfolio is you know, quite different than the current color. We would expect in an ideal scenario to reach closer to about 18 to 20 odd percent of EBITDA under the contribution margin we would expect closer to about 7 to 8 odd percent as the overall corporate overhead.
Yashowardhan Agarwal
18 to 20% EBITDA margin I.e. post corporate expenses at the company level.
Sumit Lakhani
So. Yeah, yeah, so. So the current EBITDA margin what we have reported is around 14.5%. What Sumit is mentioning is what we, you know, desire to reach which is around 17 to 18%. The difference between a 14.5 and 86% is around 10% of corporate overhead.
operator
Sir. Sorry to interrupt. So we would request you to come back for a follow up question as there are several participants waiting in the queue. Okay, thank you so much. Sir, the next question is from the line of Abhishek Khanna from Kotech Securities. Please go ahead.
Abhishek Khanna
Hi sir, I just wanted to check and. Sorry, a basic question but the 50 crores of reported EBITDA that you share for one cube, is this the cash EBITDA or is that the, is that a different number that, I mean is the cash EBITDA different from this 50 crore number?
Sumit Lakhani
So the cash what we have reported, I mean what you can calculate actually is around, including other income is around 67 crores. Now if I have to add the other income component in this 48 crore operating EBITDA, it would be around 50 crores.
Abhishek Khanna
So the cash excluding, so the cash.
Sumit Lakhani
A bit excluding other income would be around 60. Sorry, 58, about 9 crores out of. The 67 gets netted off. But that’s a, that’s more of a reflection of the cash.
Abhishek Khanna
Fair enough, fair enough. And when you say that you have this 60 crores of revenue coming from construction and fit out projects, is there a, is there an EBITDA number that you could attribute to this? Maybe an 8, 10%, whatever margin this works at or if you could just give some sense on the number.
Ravi Dugar
Yeah, the segment margin for that particular segment is around 7.5% which is after all the costs, that’s the PVT level.
Abhishek Khanna
Won’T be too different at the. Because there would be limited depreciation and finance cost for that. I understand. Right, yeah. And that 7.5% has been that way for a while or has that number changed in the last one or two years?
Ravi Dugar
So in the, in the last one or two numbers actually improved. So it was early in the range of around six and a half. Now it’s around 7.5.
Abhishek Khanna
All right, and just one last thing, when you say that you’re trying to move more towards these premium centers which I understand are more on the own business model from grade A developers, Is that a strategic shift because of the lack of availability of revenue sharing agreements as much as you would want it, or is that irrespective of you getting the revenue sharing agreements? I mean would you do it still if you had the availability of these revenue share slash managed aggregation agreements still?
Ravi Dugar
So the availability of, you know, managed aggregation profit share center continues to be very strong. Right. I mean the pipeline there last year you saw was the hottest market ever in history of India of 80 million square feet of commercial real estate. And we added the highest capacity ever in our own history in last year. Right. 40,000 seats of which about 65, 66% was in the MA model. So I don’t think that has been, is an issue and I don’t believe that in the future it will be an issue. But having said that, to answer your question on the premiumization, clearly, as you saw some of the market post Covid enterprises came in in a big way.
And about 18 months ago, some of the large multinationals and GPCs, after the uncertainty of COVID went away, started expanding aggressively. So we clearly believe that we need to be able to service every type of customer. And hence we are almost 40% in less than 160%, more than 100 seat codes. So we are servicing every type of customer. The tiering of the model, which is basically our flagship product, which we believe does really, really well, then our Gold Centers and now Elite provide the ability to service every type of tiered customer, be it a GCC multinational, be it a premium Indian multinational, or be it a more, I would say SMEs and mix corporate type customers.
So I think the intention to expand there was not because of supply. It was clearly to address every single customer segment and to address every type of need that exists in the market. And we truly believe that at the premium end, just like you get luxury cars, the opportunity is there, but it’s limited. But India being a value country, clearly a large opportunity exists in our flagship product as well. Hence we are continuing to grow each of them in a similar segment where 85% of the product will continue to be flagship and about 15% will be a mix of gold.
Abhishek Khanna
And, and there’s a point to be added.
operator
Sorry to interrupt. We would like to request you to come back for a follow up question as there are several management speaking.
Sumit Lakhani
Okay, so. So the point I wanted to add over here was as a conscious move over the last four to five quarters what we have done because the MA model also became very, very established, the quality of assets which we are picking up in MA has improved significantly than what we used to do about three to four years back. So that’s where in the commentary that we are highlighting.
Abhishek Khanna
All right, that is helpful, thanks. Just maybe one last sentence that I wanted to add. Would that mean that your more premium products would generally and historically have been on the straight lease model and they’ll continue to be that way. And revenue share plus premium products aren’t generally something that go hand in hand or is that maybe not the right understanding?
Ravi Dugar
No. So that won’t be the right understanding. See, Elite as a category is one very specific category which probably may not come a bit straightforward in ma, but the MA itself gives a lot of opportunity for premium product and we are going for more grade A assets or only grade A assets in managed aggregation as well. We have couple of office Gold Centers under Managed aggregation model as well. So at least internally we would endeavor that in the next couple of quarters we would have elite centers also coming under MA models.
Abhishek Khanna
Okay, thank you.
operator
Thank you. The next question is from the line of Shamit Assad from Amber Capital. Please go ahead.
Shamit Asar
Yeah, hi. So I just wanted to know if. You are seeing, you know, some sort of ripple, ripple effect from the slowdown. In the IT sector. Because last quarter in your presentation your. Approximately 45% of the clientele was from the IT sector. So could you point out that number this quarter?
Sumit Lakhani
So the percentage remains almost the same from IT sector. So it ranges between 45 to 47 odd percent from IT. IT. Yes. For us we are not seeing any kind of, you know, decline in terms of demand coming up from the sector. I mean despite what we hear about the commentary, probably it’s a function of the kind of space they are taking from flex players. So from the whole sector we are not seeing any kind of, you know, change in demand.
Shamit Asar
All right. And you know I’ve gone through a. Couple of drhps from your competitors. So a lot of players are reporting. The revenue to rent multiple. So have you worked out that number for office yet?
Sumit Lakhani
So I, I don’t have an immediate kind of current for this quarter but generally on a ideal center basis our rental revenue ratios range from about 2.2 to 2.5.
Shamit Asar
All right, thank you so much.
operator
Thank you. The next question is from the line of Pramal Pranav Shrimal from Pink Wealth Advisory. Please go ahead.
Pranav Shrimal
Yeah, hello. I hope I’m audible.
Sumit Lakhani
Yes, you’re audible.
Pranav Shrimal
Yeah, this, most of the questions have been answered. Just couple of questions. Speaking about the micro market, are we seeing any demand increasing from tier 2 tier 3 cities and are we thinking of expanding our portfolio further or are we focusing on Tier 1 cities at the moment?
Sumit Lakhani
So as we have been giving the guidance, I think for a while now that the current, you know, tier one and tier two city split is about 89 and 11% in tier two cities. We believe that, you know, clearly having a diversified network across, across some 18, 19 odd cities that 18 of those we have already launched. We are in the process of launching Vijaywada, so about 19 odd total cities. We believe that having a diversified network I think is very, very important and hence we have established that these 1920 cities will be the growth for the future.
Now the demand in tier one cities will continue to be strong and hence about, I would say 85 to 90% of our portfolio. We will continue to expand in tier one cities while we want to continue to expand in tier 2 cities as well. Obviously the base is smaller, hence the growth seems higher in the initial years. We also believe that, you know, over the next three to five years all of these tier two cities will become fairly established. And as they become established we want to be the market leaders like we are market leaders in tier one cities as well.
Pranav Shrimal
Oh, understood. One last question sir. You said that we have Approximately commitment of 18,000 seats coming in Q2 Q3 so. And we are going to open three new centers. So are they related or the three new centers? Does to renown centers include the 18K number or is that separate only?
Sumit Lakhani
Okay, so I’ll just clarify for everyone when I say 18,000 seats. These are the seats which are coming from the demand side, not the supplier side. So these are the seats which we have signed up for customers whose, you know, handover happens of the space in Q2 and Q3 and we will start getting revenue from these seats in Q2 and Q3. So there’s a committed kind of demand which we have signed up.
Pranav Shrimal
Oh okay. Understood sir. Great. Great. That’s it for my side and best of luck.
operator
Thank you. The next question is from the line of Devang Patel from Samiksha Capital. Please go ahead.
Devang Patel
Hi, you mentioned strategic focus on GCC and enterprise clients. What will be the share of GCC clients today and in three years from now? Where do you see that going? Also does it mean increasing increase in the size of new centers that you put catering to GCC demand and also would be looking at managed campus at some point of time?
Sumit Lakhani
Can you repeat your second part of the question?
Devang Patel
Would it lead to increasing size of centers as you cater to more GCC demand and including putting up managed campus for gccs.
Ravi Dugar
Okay, so primarily from our perspective the way we are tracking is more on the first time GCCs which are coming to India because the existing GCC are already part of, you know, have been a part of our ecosystem for a much longer time. I don’t have a percentage as of now with respect to to give with respect to the percentage of these GCCs the first time GCCs as a percentage of total occupied seats as of today. But probably in the next couple of quarters once this number becomes meaningful, we’ll share it with you. I’ll just give you a straightforward aspect.
In the last six odd months we would have signed nine new GCCs which would which are coming to which have come to India for the first time. Now generally if you look at A couple of these GCCs, they are starting with 50 odd full time employees. This could translate to maybe you know, 75 to 80 seats in our perspective. Two, they are starting with, you know, and growing or to certain GCC which are starting with almost what, 250 full time employees kind of situation. So we have signed up from 50 to 650 across these GCCs and broadly our sweet spot when we sign an enterprise customer is generally about 30 to 50 or 1,000 square feet of centers.
And that discipline we are maintaining around and because we on a case by case basis and on a very strategic basis, we end up doing very large centers for a single client.
Devang Patel
Okay, could you repeat how many seats? Q1. I’m sorry, I missed that.
Sumit Lakhani
No, So I said we have signed almost about nine odd GCCs in the last six months which are the first time GCC is coming to India.
Devang Patel
I got that. Separately I was asking how many thousand more seats to be leased in two quarters, but how many were leased out in Q1? Around 15,000.
Sumit Lakhani
Yes, 15,000 seats.
Devang Patel
Okay. And lastly on the furniture business, you’re looking for some more investment. Where would you be looking to do that investment? And you know, what is your thought process around, you know, starting a third vertical?
Sumit Lakhani
So you know, if you look at. I’ll answer the second part of the question and I’ll come back to the first part. So second part, what is the new logic? Right. So if you look at our, you know, discussion that we did about a quarter ago for the full year guidance, we were clear that we were evolving from just a co working managed office operator to a platform that integrated and provides all the different services that a workplace user requires. Right? So hence we have co working, we have managed office which are fully established in the last three years.
We have established design and build services which is our fit out business. We expanded our allied services where we added the tech labs, which is our IT solutioning, we added food and beverage cafeteria management, we added mobility, we added the transportation solution through our partnership with Ecos Mobility. So a user that requires any of these services can come to a kind of a one stop solution. Right? So it’s going to a bank where you can get a savings loan, you can get a personal loan or you can get a credit card. Similarly, if you think about furniture, the buyer of the furniture is the same buyer of the co working or managed office solution.
And hence we believe that adding the furniture business adds to that element. Today, Almost less than 10% of our customers co working is in co working. The 90% of the portfolio is in conventional space where they are buying design, build services or furniture or any of these aspects from other kind of providers. We believe that having access to 3200 client companies gives us the ability to offer furniture, furniture also as a service offering. To answer the first part of your question, this year we anticipate somewhere around 7 to 10 odd crores of investment that will go towards establishing the capacity firstly to kind of for our own consumption and then obviously simultaneously expand into third party solution as well for furniture.
Devang Patel
Thank you so much.
operator
Thank you ladies and gentlemen. Due to time constraint, that was the last question for today. I now hand over the conference to Mr. Sumit Lakhani for closing comments.
Sumit Lakhani
So we thank everyone for joining the call today. We hope we have been able to give you a detailed overview of our business and also answer your queries. Should you have further queries or clarifications, please feel free to reach out to sga, our investor relations advisors. Thank you.
operator
Thank you. On behalf of Office Space Solution limited concludes this conference. Thank you for joining us. And you may now disconnect your lines.