Awfis Space Solutions Ltd (NSE: AWFIS) Q3 2026 Earnings Call dated Feb. 02, 2026
Corporate Participants:
Amit Ramani — Chairman and Managing Director
Sumit Lakhani — Chief Executive Officer
Ravi Dugar — Chief Financial Officer
Analysts:
Unidentified Participant
Shamit Ashar — Analyst
Girish Choudhary — Analyst
Aditi Patil — Analyst
Vikrant Kashyap — Analyst
Yashowardhan Agarwal — Analyst
Akshata Telisara — Analyst
Aditya Sharma — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Office Space Solution Limited Q3FY26 Earnings Conference Call hosted by Ambed Capital Pvt Ltd. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on attached on phone. Please note that this conference has been recorded. I now hand the conference over to Mrs. Shamita sir from Ambit Capital Private Limited. Thank you. And over to you sir.
Shamit Ashar — Analyst
Yeah. Thank you. Good evening everyone. On behalf of Ambit Capital, I would like to welcome you all to the third quarter and nine month FY26 earnings conference call of Office Space Solutions Ltd. From the management, we have with us Mr. Amit Rahmani, Chairman and Managing Director, Mr. Sumit Lakhani, CEO, Mr. Ravi Dugar, CFO and Mr. Sumit Rochelani, Deputy CFO. We would like to now begin the call with opening remarks from the management post which we will have the forum open for an interactive Q and A session. Thank you. And over to you Amit and Sumit.
Amit Ramani — Chairman and Managing Director
Thank you Shamit. Good evening and very warm welcome to everyone present on the call. Along with me I have Mr. Sumit Laqhani, our CEO, Mr. Ravi Dugar, our Chief Financial Officer, Mr. Sumit Rochelani, our Deputy Financial Officer and SGA, our Investor Relations Advisors. Before we begin, we would like to place on record our sincere appreciation for the valuable contribution and leadership of Mr. Ravi Dugar during his tenure with the company. We thank him for his dedication and the role he has played in strengthening the company’s financial framework. I would like to also inform you that the board has appointed Mr.
Sumit Rochelani as the Chief Financial Officer of the company effective February 3, 2026. Based on the recommendations on the nomination and Remuneration Committee, Mr. Rochelani brings over 14 years of experience across audit controllership, financial planning and analysis, corporate finance and indirect taxation. Having previously served as Head of Finance at office, he brings valuable continuity and deep understanding of the business as he steps into this role. Coming to our quarterly performance, we have uploaded our Q3 FY26 results and 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.
As India’s largest flexible workspace provider, office delivers a strong performance amid buoyant commercial real estate environment. This is supported by a record office leasing of 82 million square feet in 2025 across major Indian cities. Driven by sustained demand from domestic enterprises and GCC. These are operating across technology, BFSI, engineering and emerging new sectors in Q3. FY26 office continues to maintain a strong growth trajectory supported by sustainability, client demand, healthy occupancy levels and operational efficiency. Revenue for the quarter grew 20% year on year to 382 crores while EBITDA increased to 30% to 139 crores with margins expanding by 270 basis points on a year on year basis reflecting improved scale efficiencies, a higher share of mature centers and a favorable operating leverage.
Our coworkane Allied Services segment continue to lead growth, rising 32% year on year to Rs 322 crores and contributing 84% of the total revenue. This momentum was driven by our ability to maintain high occupancy levels across an expanded seed base coupled with strong traction from GCC and enterprise clients. Additionally, the construction fit out projects further referenced as Office transform segment contributed Rs. 60 crores during the quarter. Revenues here saw a decline primarily due to temporary project deferrals and execution delays linked to grab for pollution norms as well as lower managed aggregation seat addition during the nine month FY26 versus last year.
Looking ahead, the demand for office transform remains strong. The third party pipeline currently spans about 9 lakh square feet translating roughly into 200 crores of revenue opportunity while the managed Aggregation link transform pipeline covers about 4 lakh square feet of upcoming supply. With project execution expected to normalize and multiple large mandates moving into active delivery, this segment is positioned for a strong recovery trajectory. Our geographic expansion strategy continues to strengthen our Pan India presence. Today we stand tall with 257 centers, nearly 1 77,000 seats across 18 cities serving a diverse base of 3,400 client companies from dynamic startups, emerging enterprises to large corporates and GCCs.
We continue to focus on Grade A buildings and premium locations aligning with evolving requirements of GCCs and large enterprises. 100% of the new supply was on Grade A and A assets. With a rising share of gold and elite formats reinforcing premium enterprise led positioning, our tier 2 seat capacity grew by 16% year over year, showcasing the growing acceptance and adoption of flexible workplace models beyond traditional metropolitan centers. On the industry front, a structural shift under ways growing preference for flexibility. Occupiers are increasingly seeking speed to market capital, efficiency, compliance, readiness and scalability requirements that traditional real estate models often struggle to meet.
Flexible workplace solutions have therefore transitioned from being tactical or interim arrangements to becoming A core component of enterprise real estate strategy. Flexible workspaces currently account for roughly 1/6 of total new office leasing in India and expected to reach approach almost 1/5 of over the near term. A powerful structural demand driver continues to be the rapid expansion of global capability centers in India. Grover enterprises are increasing scale. Their India presence through GCC supported by countries deep talent pool and structural cost advantages with GCC is expected to account for approximately 40% of the total office absorption in 2026.
Importantly this demand is becoming more broad based extending beyond large multinationals to include mid market global firms, global unicorns and emerging new age sectors. The momentum is further reinforced by recent measures announced in the Union Budget 2026 in aimed at improving long term tax certainty for multinational corporations. Key among these is the introduction of the long term tax holiday for foreign companies delivering global digital and cloud services using India based infrastructure which significantly reduces uncertainty around future tax liabilities and strengthens India’s attractiveness as a global operating base. In parallel the budget introduced transfer pricing norms applicable to multinational corporations, improving tax clarity and predictability for global enterprises operating services in India technology and capability center which are being driven from here.
These measures significantly enhance ease of operations for MNC adding incremental fuel to an already strong growth cycle and supporting sustained demand for scalable enterprise grade workplace solutions in office. We already have 80 plus GCCs in our ecosystem and we have aligned our strategy to capture this opportunity by moving up the value curve, strengthening our presence in Grade A and a asset location and seeing increasing traction from mid sized and large GCCs. With 500 plus clients now contributing to 36% of our portfolio, our growing gold and elite center footprint and Pan India network position us well to capture both new GCC setups and expansion led demand at office.
We believe one of our biggest strengths is our ability to address demand across the entire spectrum of occupiers. On one hand we are very well positioned to capture large enterprises and GCC demand through manage office segment where clients are looking for speed, compliance, scalability and long term flexibility. On the other hand, we continue to serve small cohorts through our coworking segment which remains strategic part of our business. Importantly, Office is the only large player in India with strong presence in small cohort co working segments catering to clients ranging from single seats to more than 100 seats.
This is a highly operational intensive business. It requires years of execution capability, strong processes and on ground depth to build at a scale that we operate today. Office portfolio depth meaningfully reduces client concentration risk and enhances the resiliency and stability of our revenue profile. As we move forward, our focus remains unwavering to build the most agile, high performing and the future ready workspace ecosystem in India. On the client side, we continue to enhance the experience through technology integration, superior design and sustainable operation. Our aim is to position Office not just as a workplace provider but as a long term strategic partner that empowers businesses to scale with agility and confidence.
Let me hand it over to now Mr. Sumit Dakhani, our CEO to share Q3FY26 operational highlights over to you Sumit.
Sumit Lakhani — Chief Executive Officer
Thank you Amit Good evening everyone. I would like to share with you the key operational highlights for Q3 FY 2026. On the supply side, during the quarter we added 8,000 plus new seats bringing our total capacity to around 152,000 operational seats across 232 centers pan India as of December 2025 when including centers currently in the fit out phase and those under LOI, our total capacity now stands at around 177,000 seats across 257 centers covering an expansive 8.6 million square feet. Year on year our growth remains robust. Operational seats and centers grew by 25% and 20% respectively.
Looking ahead, we have a pipeline with signed LOIs for 11 new centers adding approximately 11,000 seats and and 0.5 million square feet of chargeable area. On the premium workspace side we now have 32 centers divided between 25 gold centers and 7 elite centers across some of the most prestigious commercial locations in the country. Moving to our supply pipeline, our expansion continues to be driven by a deep and high quality managed aggregation pipeline enabling capital efficient network growth. Currently we have 8 lakh square feet of MA supply committed across prime micro markets. Of this, 4.1 lakh square feet is already confirmed across key cities including Mumbai, Pune, Delhi, NCR, Hyderabad, Chennai and Kolkata.
The balance 3.99 lakh square feet is under advanced stages of closure providing clear visibility for asset light growth over the coming years. On the demand side, we signed contracts for 15,000 plus new seats in Q3 FY26 and roughly 57,000 new seats since December 2024 reflecting a well diversified revenue base. Approximately 64% of our occupied seats are taken by large corporates and MNCs, 25% by SMEs mid corporates, 10% by startups and remaining share by freelancers. We are very happy to announce that we have 80 plus GCCs in our ecosystem contributing 21% of our space revenue share during 9 month FY26 we closed 12 deals with GCCs and 11 more already logged in to go live between January to June 2026.
Notably, multi center clients account for 46% of occupied seats for us, this cohort comprises over 300 plus clients with an average tenure of approximately 42 months, underscoring strong client stickiness. Within this space, 27% of clients operate in more than 3 centers, 15% across more than 5 centers and 6% across more than 10 centers reflecting sustained expansion within our network. The average client tenure has increased to 37 months with an average lock in period of 26 months demonstrating strong long term client commitments. Our client base remains highly diversified with more than 3400/ active clients as of December 2025.
We are currently operating at an overall occupancy level of about 75% versus 73% last year, providing meaningful headroom for margin expansion and growth without incremental CapEx demand, performance remains robust with centers older than 12 months operating at 84% occupancy, reinforcing the steady ramp up curve and the strength of mature centers. This segment is largely served through our Asset Light Managed Aggregation model and supported by favorable pricing and higher ocs. It continues to be a highly profitable and scalable growth engine for office. Despite the competitive nature of the market, we have continued to deliver profitable growth reflecting disciplined execution and a differentiated operating model.
Our strategy remains focused on mid sized mandates complemented by select large engagements such as national stock exchanges. We are increasingly partnering with first time GCCs which tend to be highly sticky and long term in nature. With a dedicated team systematically identifying and pursuing GCC opportunities aligned with our strategic criteria. We have strong confidence in the sustainability and scalability of our managed office growth with India adding approximately 20 to 31st time GCCs every quarter. Our existing portfolio of over 80 plus GCCs combined with long standing relationship with GCC enablers and consultants across India, US and Europe provides us early and consistent access at the inception stage of GCC setups.
This together with our proven enterprise grade execution capabilities enable office to capture a meaningful share of this growing segment. That concludes my update. I will now hand over to Ravi our CFO for the financial discussion.
Ravi Dugar — Chief Financial Officer
Thanks Sumit. Good evening everyone and a very warm welcome to everyone. Let me give you a quick overview on our financial performance. Our consolidated operating revenues stood at 382 corrodes which is a strong growth of 20% on a year y on y basis and for 9 month FY26 it was 1083 crores which is a growth of 25% year on year basis. This was supported by a robust growth in our co working and allied services business which grew by 38% on a yoy basis the operating EBITDA stood at 139 crores, a growth of 30% on yoy basis the margin stood at 36.5%.
And for a nine month FY26 the operating EBITDA stood at 398 crores again a growth of 39%. With EBITDA margins at a strong 36.7% in Q3, FY26 PAT excluding exceptional items stood at 22 crore compared to rupees 15 crore in Q3 of last year. And for nine month FY26 PAT excluding exceptional items stood At Rs. 48 crore compared to 32 crores in nine months of last financial year. On the normalized basis which is adjusted for India’s 116 lease rentals and for India’s 109 and 102, the normalized operating EBITDA stood at 55 crores, a growth of 18% on a Y on Y basis for this quarter.
For nine month FY26 the operating EBITDA stood at 155 crores which is a growth of 30% on a YoY basis. On liquidity, our position continues to be very strong with the net debt to equity ratio at -0.06% as at 31st December 25th. This 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 question may press star and one on the touchdown telephone. If you wish to remove yourself from question queue, you may press star and two participants are requested to use handsets while asking a question. Ladies and gentlemen will wait for a moment while the question queue assembles. Sa. The first question is from the line of Girish Chaudhary from Avindus Park. Please go ahead.
Girish Choudhary
Yeah. Hi, good evening. Thanks for the opportunity. Firstly, how should we look at the occupancies going ahead? This quarter is being 75%. If you can give a bit of detail about what can happen to the occupancy. Because what I see is that the matured center occupancy has remained at around 84%. So is this optimal kind of occupancy in the mature centers? So the incremental ramp up has to come in from the centers which have been added in the last six to nine Months. So that’s the first question.
Sumit Lakhani
Yeah. Hi Girish, this is Sumit. So with respect to occupancy, as you would see over the last one year the blended occupancy has increased by over 200 basis points point from 73 to 75%.
So there is a serious effort with respect to improving the occupancy. The way the new sales is happening and the kind of committed new sales has happened. We see a serious improvement around on occupancy buildup in the next one and two quarter itself where we feel very optimistic around moving these numbers substantially in terms of the occupancy for 12 month plus centers. Internally we think 84, 85% is not the steady state. This can get increased up. We see couple of centers are taking a bit longer. So in the next one or two odd quarters you would see even this segment getting an improvement by almost about 100250 basis point.
Girish Choudhary
Okay, great. So this improvement you’re expected to see in the coming one to two quarters, is that right?
Sumit Lakhani
Yes, because like I mentioned, the way we have visibility of signed seats pipeline in the next one to two quarter we are expecting improvement in both blended occupancy for the whole portfolio as well as improvement around in the occupancy across the 12 month plus portfolio.
Girish Choudhary
Sure, sure. Secondly, on the overall pricing, right. What’s the kind of price growth you’re seeing like to like in the same centers and also wanted to understand the margin trajectory going ahead in the co working segment.
Sumit Lakhani
So Girish, as we would have mentioned earlier as well, the pricing is a direct reflection of the overall micro market rental at that point of time. So any, even for a mature center, any new customer who is coming in that center, the pricing reflects the current micro market rental so which in the last one to two years is higher so the customer ends up paying a larger price. For the existing customer cohort, our agreements contracts have 5 to 7% kind of escalations being built in where for small to mid sized cohorts and 4 to 5% escalations for larger size cohorts.
So in any case for the existing client cohorts, the overall business mirror model enables about 5% kind of escalation in pricing. So that’s always built in and that’s the nature of the business. Does that answer your question, Girish?
operator
The participants have led the queue. Move to the next. The next question is from the line of Yash Kislanci, please go ahead.
Unidentified Participant
Good evening team. Thank you for taking my questions. The tenure bucket of greater than 24 months has not really changed in any material way. Despite enterprise MNCs including SMEs and mid sized corporates making a bigger portion of your client distribution. So please help me understand the corporate MNCs or SMEs in your client mix. What cohort of seats do they usually prefer? What kind of lease terms are they signing? And how do you expect this mix to evolve in the future?
Sumit Lakhani
So if you look at the tenure bucket, the greater than 24 months tenure clients constitute about 73% of our portfolio currently and 12 to 23 is 20%. I see from my vantage point, the way I see is I have seen this tenure bucket growing up significantly around over the last couple of years. I, I’m probably you may be referring to one or two quarters of data. I don’t have that data handy with me. But if we look at over the last one to two years period, I have seen uh, this uh, growing significantly and uh, where we feel uh, a very con, you know, you know, confident, uh, around is because we originally when we started the overall tenure buckets used to be between 6 to 12 months and now almost about 2/3 of the business it is around more than 12, 24 odd months.
To your question around on what kind of preferences various kind of occupiers have with respect to various tenure buckets. It’s more around on the cohort side is generally a larger cohort, let’s say a 200, 300 plus seater cohort prefers to sign up for 36 to 48 months kind of lock ins and 48 to 60 months kind of, you know, tenures. Whereas shorter tenure customers end up signing up more between 12 to 24 months. It’s a bit more agnostic between enterprises, SMEs, mid corporates and startups.
Amit Ramani
Yes. Just to add to that this quarter obviously the overall locked in tenure has for the complete portfolio is now 26 months instead of 24. And the tenure for the overall portfolio is 32. And if you look at the greater than 100 seats, which typically is the, you know, the larger cohorts that overall locked in tenure is basically 37 months and basically the total tenure is about 49 months. So there’s been significant improvement as we see it in those two buckets as well. You also need to understand that a large portion of our portfolio, almost 45% is less than 100 seats.
And in that obviously there will be lesser tenure.
Unidentified Participant
Okay, understood. And yes indeed. I was just comparing numbers from previous quarter but so I know you spoke about your blended occupancy improving because of increased sales traction. Please help me understand what is causing that increased sales traction. Is this something that in your offering that has changed or is it something in the macroeconomic environment that you see changing that’s causing these increase in sales?
Amit Ramani
So go ahead Sumit. Good.
Sumit Lakhani
So primarily this had been organic. If you would see the number of new seats sold we have been selling every quarter. It’s broadly organically increasing every quarter. There is a significant level of behavioral change with occupiers looking to prefer flex and that is continuing and that’s probably why the demand is going up now where you are seeing also some improvement around in blended occupancy is also a function of the aging of centers. Till about 2 quarters back lot of our centers were aged between 0 to 3 months kind of a bracket. As that profile of vintage of those centers became six to seven months they have started hitting higher occupancies.
We generally require about nine to ten months for centers to start hitting 80% plus kind of occupancy. So it’s a function of both that a lot of our centers which we opened during Q4 of last financial year they were more without any kind of customers. They were pure speculative centers where we opened up a center and then we were waiting for the or we were filling in the demand for those centers versus the kind of centers where you start with a new demand. So the overall cycle is about 9 to 12 months to hit occupancies.
So currently it’s more organic market and demand over the last couple of years had been growing steadily with the more adoption of co working.
Unidentified Participant
Thanks, that’s helpful. And this one lasts from me going forward. What proportion of your revenue from operations is expected from construction? And.
Amit Ramani
So roughly about 20% of the revenue is expected from the construction fit out business. Currently the split is about 8317 but roughly this will settle in somewhere around 8020 kind of a number.
Unidentified Participant
Got it. Thank you very much.
operator
Thank you. Ladies and gentlemen, in order to ensure that management is able to address questions from all the power supply in the queue please limit the question to one question per participant. Do you have follow up question? We request you to rejoin the queue. The next question is from the line of ADIDE from IIC securities. Please go ahead.
Aditi Patil
Yeah. Good evening everyone. Thank you for the opportunity. The first question to Ahmed Sumit is could you help us and think what is going to be the end of 26 operational seats and a similar number for FY27 considering the pipeline which we have now. Yeah, that is my first question.
Amit Ramani
So Adit, the guidance for FY26 is somewhere around 32,000 seats for FY26. I would not want to comment on the FY27 guidance right now which we will give as part of the revenue and the other financial metric guidance that we will provide in the last quarter.
Aditi Patil
Okay so then this 152,000 right. 1 lakh 52,000 goes to around how much incrementally.
Amit Ramani
So we ended FY25 at 1 lakh 35,000 seats. So roughly you add another 30,000 somewhere around 1 lakh 66 odd thousand seats.
Aditi Patil
Okay. So okay, this quarter is going to be a means quite a few number of seats should open up right in this quarter.
Amit Ramani
If you see the under fit out, right. The centers is 1 lakh 66 already. Right. So the these centers are already under fit out. So the 1 lakh 52 will be closer to 1 lakh 66 at the exit of FYI 26 March 26.
Aditi Patil
Okay, okay. And so you alluded obviously that 27 you don’t have to share guidance. But the overall 1 77,000, this is something we have clear visibility means over the next 18 months this should definitely come on stream. Or how should we look at it?
Amit Ramani
We, we have clear visibility down to the center level. I mean we know the name of the building asset where this will go live. So a complete clarity on that 177000 seats.
Aditi Patil
Okay. Okay, fine, fine. Yeah. The second question is mainly for Ravi or if you could answer the just wanted a CapEx number. YTD. So these numbers are 110 crores. Right. And the six months, so what is the number for nine months and 26? How much do you end are you going to end up with? Yeah.
Amit Ramani
So for, for, for the nine month period the number is 159 crores.
Aditi Patil
Okay.
Amit Ramani
And we had given a guidance of 200 to 210 of the year and we expect the number to be around that only. Okay. So another 5560 crores of capex. Okay.
Aditi Patil
And just as a bookkeeping question. Yeah. Cash or on books as of December you have that number handy?
Amit Ramani
Yeah, the cash balance, what we have is around 95. One second.
Aditi Patil
Yeah, yeah.
Amit Ramani
96 crores. The cash balance in the books.
Aditi Patil
Okay. Including investments.
Amit Ramani
Including investments, yeah.
Aditi Patil
Okay. Around 96 crores.
Amit Ramani
Yeah, 96 crores is the including FDs and you know the cash balance and.
Sumit Lakhani
Whatever we are carrying.
Aditi Patil
Okay, okay, okay. And sir, just the last one. This taxation, are we out of it? From the fourth quarter onwards, do we move to a normal tax rate means or there are still some losses and all which we can cover in the thing.
Amit Ramani
So we have a Runway of one more year from here.
Aditi Patil
Okay, okay, okay. Another three or four quarters.
Amit Ramani
Yeah, we’ll be out of it most likely.
Aditi Patil
Okay, okay. Fine, fine, fine. Sir. Yeah, that’s it. From my side. All the best. I’ll come back in the. Thank you.
operator
Thank you. The next question is from the line of Vikrant Kashia from Asian Market Securities. Please go ahead.
Vikrant Kashyap
Hi, good evening to the team. My first question pertains to the seat addition. So the industry has won a very strong seat addition during the quarter while if you look at we have added only 8,000 seats compared to around 11,000 plus seats same quarter last year. So where we went wrong this quarter was the seats sold number are very high compared to what industry standards are. But in the terms of seat addition and also the share of managed seats which used to be 65, 67 odd percent is now 62% of the portfolio. So where the deferrals are and how we are planning ahead because we had earlier guided for 40,000 seats in the beginning of the year, now we are guiding for 32,000 seats.
So can you please show some more lights on that?
Sumit Lakhani
Yeah. So the original guidance for seat additions had been around 40,000 gross addition in a year. Whereas we are now guiding around 32,000 to 33,000 seats to be added this financial year. See, it’s primarily from a perspective that we don’t need to add a lot of seats for our revenue growth. Our focus is more around on building blended occupancies for the current portfolio and run it that way. So we are taking a more balanced approach around on it because if you look at the last six to nine months had also been a very peak commercial real estate cycle.
And we are playing it very guarded and conservatively because we don’t want to be stuck with signing up deals at prices which are not conducive for us in long term. So that is primarily one of the reasons where we had been a bit more conservative in the whole financial year with respect to our seat additions. Second, we had been balancing our overall blended occupancy along with it along with the margins because we don’t want to be in a situation where we add up more seats and sit with a bit more muted kind of occupancy which will have a negative impact on the overall margins.
If you look at now currently in our presentation also we had given the complete pipeline of our seats especially in the managed aggregation way and the the numbers and the kind of pipeline looks very promising. Third, if you see our business model is significantly different than most of the peers. For most of the peers they end up taking very large spaces. So the seat edition numbers becomes straightforward and their model is more around on straight leases. Our model is more hinged around on setting up mid sized co working centers which cater to larger number of clients around and which we believe works in a better form both from a capital light perspective as well as managing the risk perspective.
And that’s the model we follow. So there the seat addition will always grow in a bit more organic way versus what the peers do. If I can take an example, it’s more like building a retail banking book with doing some level of managed offices could be some larger loans happening versus building a complete NBFC book. So our approach to life is build the business more organically on a brick by brick basis in a fundamentally right manner. So that’s what we have been doing. My last point over here would be under like if you go through our presentation we have also given guidance around on how the seat edition is happening across various quarters.
A lot of our managed aggregation seats have already been forward leased. We have signed up these buildings which are brand new buildings which will go live in the coming quarters and that’s the reason why a bit, you know this addition of seats in this financial year.
Vikrant Kashyap
Okay, so second question is on your transform business. So for last two quarters we have seen deferral in execution or may delay by the landlords in the handover. Still in the nine months numbers we look at we are down by around 10% on a Y basis and we are still 200 crore of pipelines. Could you please highlight what went wrong this year because you are growing very strongly in the transform business. Suddenly everything is stuck and the margin profile also deteriorated. So what kind of studies hundred we can see and what kind of margin profile if you look at in the transform business.
Amit Ramani
So the DNV revenue obviously should be viewed on a year on year basis. So Q3FY26 was impacted as we said earlier due to the grab restrictions in north and this had three large client projects that obviously led to a revenue dip. The office and the construction Fit out has two revenue streams Managed aggregation which is landlord spend and the external client design and fit out project. The lower managed aggregation and nine months period obviously last year has impacted the revenue as that number came down. The second piece is that the external client Pipeline is obviously very very strong and obviously seeing growth and obviously in this revenue segment and providing obviously a positive outlook going forward.
As far as the margin profile goes, it’s a fixed cost business, right? So as the revenue dips, obviously the margin will dip because the fixed cost of people continues even when your revenue might drop for reasons such as graph or reduction in the number of managed aggregation seats.
Vikrant Kashyap
That clarifies. Thank you. One thing that you did very well that you have given the wifi karsan of our base gold and elite models and also would request if you can give a bifurcation of your co working and managed enterprise models bifurcation if you can from this.
Amit Ramani
Sure. Happy to do that. From the future. Right now obviously I don’t have the data handle with me but absolutely happy to.
Vikrant Kashyap
No. So thank you very much and wish you best of luck.
Amit Ramani
Okay, thank you very much.
operator
Thank you. The next question is from the line of Yasha Vardhan Agarwal from IIFL Capital Asset Management. Please go ahead.
Yashowardhan Agarwal
Yeah.
Yashowardhan Agarwal
Hi, good evening and thanks for taking my questions. Couple of questions from my side. So initially we had guided for 30% growth in revenue, 30% growth in EBITDA. Does that still hold true for us?
Sumit Lakhani
So if you look at the way the overall business is going and from co working segment perspective, both the revenue guidance as well as the margin guidance we are meeting but as of nine months the design and build business as Amit has explained is a area where the guidance is not going as per plan. So but otherwise in co working segment both the margin as well as the revenue guidance we are going as per the guidance.
Yashowardhan Agarwal
Okay. And so coming on to the occupancy it has improved year on year by 200 bits. But if I look at the occupancy of the new seats that we have added, so that has been depend quarter on quarter. So what is the reason that we are unable to scale up or ramp up the occupancy in the new seats that we are adding?
Sumit Lakhani
So can you similarly explain how you are figuring out the occupancy for the new seats?
Yashowardhan Agarwal
Sure sir. So I do have the data for total operational seats last year. Right. That is in Q3 25. Right. So right in that the total operation seats were around 1 lakh 22 thousand. And so I do have the number of occupancy of more than 12 months that is 84%. So sir, I can calculate what would be the occupancy of those seats. There’s the new seats that we have added this year. So current it’s around 1 lakh 52 thousand seats. So sir, on that basis that I can and the blended number is 75% is given. So 1 lakh 22,000 into 18 4% will give me the occupancy of the mature seats and 1 lakh 52 thousand into 75% will give me the blended occupancy.
So. So this is how I have done the calculation. I hope that is okay. Okay, I can share it later on as well.
Sumit Lakhani
So see so the way I look at is the overall blended occupancy. The way it is working is couple of times there is a churn in our mature center also and then the whole occupancy ramp up for the center also needs to do. I don’t see. So when we from our vantage point the business is not working in a manner that the seats which we have signed up over last 12 months that there is any slow ramp up of occupancy for those seats. It’s more of a blended portfolio. That couple of, you know, times even the mature center there is a churn and it takes a bit longer time around on it.
So we look at the occupancy right now more on a blended basis and we feel that the centers we have signed up over the last, you know, since Q3 of last financial year, the occupancy buildup is happening as per plan.
Yashowardhan Agarwal
Coming on to the churn. Is that too high? Because if I look at a presentation from first quarter till third quarter it is mentioned that we have signed 15,000 seats in each of these quarters. Right? That is 45,000 seats signed versus if I see the change in total occupied seats that is coming around 16,000 seats. So is the ramp up happening too slow or is the churn so high that on a blended level basis we are seeing the occupancy lower than it could have been. What if the churn would be less?
Sumit Lakhani
No, it’s more of a function that most of the seats were added around in Q4 of last financial year. That’s why I mentioned in the first question also that I’m expecting in the next one or two quarters that the blended occupancy will grow significantly. See it’s also a function like lot of seats get added in let’s say February, March of financial year. Then we still have the centers are the new centers are in 7th or 8th or 9th month of you know, operation around. So even the seats like 15,000 seats which we have signed up in this quarter, the client join in generally happens within you know, 60 to 120 odd days from the day they have signed up the seat.
So the actual occupancy come there’s a lag of almost about 60 to 120 odd days. So the centers where we have signed up or the centers which went live in Q4 of last financial year we expect a ramp up in occupancy or the occupancy going up beyond 80% plus in those centers say in Q4 of this financial year as well as in Q1 of the next financial year.
Yashowardhan Agarwal
Okay, I’m sorry to interrupt Mr. Agarwal, just one question, just one question then I will come back in with you. Sir. If I look at the depreciation per se that has increased meaningfully versus last year versus our revenue per C8 has been constant. So what is the reason for depreciation increase? And so if it has been the more increased through state ease model so why are our margins not increasing in the same direction? So that’s, that is my question.
Amit Ramani
So. So Mr. Agrawal, the depreciation has increased because obviously we have you know kind of focused. I mean there’s, there are few. They are actually focus on the elite and you know the mo seats what we are talking about that has led to an increase in depreciation. Obviously on the margin side you will see an uptick in the, you know, in the coming quarters because these seats have been filled over the last one or two quarters. So this will obviously give an uptick in the margins profile for these.
Yashowardhan Agarwal
Sorry, you were saying something for these seats. Okay, so I will come back. Thank you. So thank you.
operator
Thank you. The next question is from the line of Akshata Telrisara from Iones Alpha. Please go ahead.
Akshata Telisara
Yeah, hi, thanks for the opportunity. The capex number, correct me if I’m wrong was 200, 210 crores for 40,000 seats. And now you’re bidding for the same number despite that number coming down to 32,000 seats. Is it largely because of the elite part or there’s something more to it?
Sumit Lakhani
So you’re right. If you look at in the whole nine month financial year the larger portion of seats which we which went live had been more on the straight lease side versus the managed aggregation seats which are right now skewed for Q4 and Q1 of Next Financial year. Why we ended up doing a bit more straight lease is two reasons. One is we set up more few elite centers which came in more straight lease model where the whole fit out capex needed to be done from our site and it also has a higher CAPEX as compared to our flagship product.
Second, we saw significant traction in GCC business where we set up new centers for these GCCs and these, the supply structure in these were primarily straight leases and where we ended up doing our own fit out. So it’s a function that in nine months the more nature of the business was around on gccs as well as elite versus Managed typically our managed aggregation model.
Akshata Telisara
Okay, and despite the occupancy jump that hasn’t really flown down to India’s EBITDA margins. Would you only assign it to the transform business or there’s something beyond that?
Amit Ramani
The main reason for that is the transform business because if you otherwise look at it, the margin would have certainly improved in the working business. But because of the transform business having a bit of a tip this quarter because of the reasons we explained earlier, it has had a almost negligible impact on overall EBITDA improvement in India.
Akshata Telisara
Okay, and would you be able to share CAPEX for 27?
Sumit Lakhani
Right now I would not be.
Akshata Telisara
Okay, sure.
operator
Thank you. The next question is from the Lion Siva from I thought bms. Please go ahead.
Unidentified Participant
Hi, thank you for the opportunity sir. So my first question is regarding Office Transform. On the last call we had an update that we are expanding into a new segment of clients like retail, hospitality. And others as well. So could you share an update on how it is working out for us? And out of the pipeline that you. Mentioned, how much do these segments contribute?
Amit Ramani
Sure. So I don’t think we said that we would immediately move into these categories. The majority of the focus for us is on commercial workplace interiors which we have done in the last four years since the business has been kind of incepted, has primarily focused on commercial workplace interiors. The plan was not to immediately go into these new segments but as we subsidized this business, the idea was that this would give the leadership of that business business the opportunity to expand into those avenues. Today almost, I would say 95% of the business comes from commercial workplace interiors.
Even the pipeline that I mentioned earlier of almost 8 lakh square feet, 100% of that is basically from commercial workplace opportunities. Obviously the sectors are diverse. They are across industrial chemicals, across IT, its across BPO etc. But clearly currently the business does not do any major, I would say non commercial workplace interior. We do a little bit of educational spaces that we have recently started, but that’s about only 5%. Rest of the segments is negligible. These will develop over the next two to three years. Today we have a market leadership in IT, ITS and BPO, etc.
These kind of service offerings, especially under 100,000 square foot area. We want to make sure that we continue to have a market leadership position in that space and then obviously once we have established that, then expand into the other category.
Unidentified Participant
Yeah, understood. Thanks for the clarification. And so my next question is regarding. The investment that we made for furniture capacity. So we made a 7 to 10 crore investment, right? And do we have any update on the same? So what is the revenue potential here that you’re looking at apart from capital consumption?
Amit Ramani
So we have not made any investment into the furniture manufacturing. Currently all the manufacturing is through contract manufacturing. So there’s almost negligible investment that has gone. There’s actually no zero capital investment and there’s very negligible investment that has gone into the furniture business. We will in the fourth quarter be able to give a more clear guidance for the furniture business which currently is in a very nascent state. But we have not invested anything in that business at all.
Unidentified Participant
Understood. Sir, one last question. So what is our refurbishment capex cycle looking like? So how many years do we wait until we renovate the property? And what is the capex per square feet for reformation?
Amit Ramani
So typically if you look at our centers, the average tenure of a center is between nine to ten years at a five year mark. We believe that at that mark the center requires probably 15 to 20% of investment to refresh it for another five years. Essentially every month we have what we call a repair and maintenance. Depends on the center, age, etc. But it’s basically enough for us to keep the center fresh for the first five years with that minimal investment that happens as part of the operating expense every month essentially at the five year mark there could be one or two things.
One, we could obviously continue in that center. Sometimes we decide not to continue. But ideally 80 to 85% of centers we look at a 10 year tenure in that situation, at the five year mark we do a 15, 20% refurbishment.
Unidentified Participant
Understood sir. That’s it from myself. Thank you.
operator
Thank you. The next question is from the line of Aditya Sharma from Shikara Investments. Please go ahead.
Aditya Sharma
Hi sir. Thanks for the opportunity. Trying to understand the reasons why we reduced the guidance from 40,000ft to 32,000. So one of the reasons you highlighted was basically we’re trying to go slow in the larger seat format, the 500 seater. So is the understanding that. The understanding that we’re trying to maintain a mix. So around 500 seater plus is currently around 35, 36 odd percent. So we are we trying to maintain a mix which is leading to a lower seat addition.
Sumit Lakhani
So I’ll explain and clarify it a bit. We are not averse to signing up 500 plus seater clients but as a business model when we sign up a speculative center.
So let’s define a center where we don’t have a demand day one these centers we prefer to sign up generally at 30,000 to 40,000 square feet kind of size and not very large kind of centers like 100,000 or 200,000 square feet where the seat sizes would almost be you know, two and a half to four or four times of that. So by default we would, we look forward to more number of sites to be selected, more number of universities to be covered, more number of micro markets to be covered because we love setting up a larger network.
By nature of this, when we sign up these mid sized centers we get a mixed cohort. So our typical center gets cohort of you know, one or two customers of 200 plus one or two or three of 100 to 200 and lot between one 200 seater cohorts. We love doing this site because the diversity of clients, the diversity of supply, the diversity of buildings, the diversity of locations ensure that we are able to run through any kind of macro headwinds for 10 to 12 year period in that center. Second, if you look at the other big advantage, what we see is we have a clear market leadership in 100 seater cohort which ends up yielding better price realizations for us as compared to larger cohorts and which is, you know, so that’s the kind of, you know, business we do.
Now this is a typical co working business for lot of GCCs and large strategic clients. Clients like which we have disclosed earlier as well like National Stock Exchange and couple of GCCs. We have set up centers which are much larger which are dedicated to them and they are in the 500 plus or a thousand plus seater cohort. And we continue to do it, but we do it in a more strategic kind of manner. What we see as a risk is if we grow a business very, very large kind of dedicated centers for these larger cohorts the challenge is that after their lock in period ends, which could range from 36 months to 60 odd months, these centers are very, very customized only to that client’s requirement and the occupancy buildup at that point of time could have a negative impact on the P and L.
Second, the refurbishment cost would end up being A bit more. So there we are a bit more strategic and a bit more conservative for doing back to back businesses. But this we are doing very seriously and very aggressively. For first time gccs if you would refer to our presentation this time we had also given two case studies on how we are growing this segment of business which in our industry is called managed office with respect to the first time gccs.
Aditya Sharma
Yeah, yeah, got it. If you could touch on that point. How are you strategic in the sense like how do we circumvent these risks that you highlighted in the time with gcps? Yes, yeah, thank you.
Sumit Lakhani
So one, we are strategic in a manner that we are very. We select the customers with which we whom we work and provide more larger kind of, you know, projects dedicatedly so for. For whom we are setting up larger kind of contracts. So these are either these strategic clients with whom we have worked across multiple centers. So like one of the IT majors we have probably delivered almost about 500,000 plus square feet for them across five to six different locations. So tomorrow if they come back to us and they want us to even set up 100,000 square feet center we are very clear because we are aligned with the teams.
We know their teams well, we know their strategy well and we feel comfortable that they would be there with us for a long time. So these are a group of almost about 15 to 18 different large occupiers with whom we work. Second case in point, a company like National Stock Exchange with now whom we have relationship across four plus centers. Second, the segment of customers which is helping us grow this managed office business is the first time GCCs there we see a very strong stickiness which comes across with these GCCs. For them a flex operator is the preferred choice because they are looking at us for we add significant value for them in terms of execution of space, finding the space and running the space.
And they want preferably one single player to run and manage the whole thing. And we also. And they end up giving a more longer kind of, you know, lock ins to us. Got it.
Aditya Sharma
Thank you.
operator
Thank you ladies and gentlemen. Your time constraint, we are taking it as a last question. I would now hand the conference over to the management for the closing comments. Over to you sir.
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 answer your queries. Should you have further queries or clarifications please feel free to reach out to sga, our investor relation advisors. Thank you.
operator
Thank you. On behalf of Amad Capital Private Limited. That concludes this conference. Thank you for joining us. And you may now disconnect your lines. Thank you.