Awfis Space Solutions Ltd (NSE: AWFIS) Q4 2025 Earnings Call dated May. 26, 2025
Corporate Participants:
Unidentified Speaker
Amit Ramani — Founder and Chief Executive Officer
Sumit Lakhani — Deputy Chief Executive Officer
Ravi Dugar — Chief Financial Officer
Analysts:
Unidentified Participant
Vikrant Kashyap — Analyst
Girish Choudhary — Analyst
Adhidev Chattopadhyay — Analyst
Chintan Sheth — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Office Space Solutions Limited Q4FY25 Earnings Conference Call hosted by Asian Market Securities. This conference call may contain forward looking statements about the company which are based on beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantee of future performance and involve risks and uncertainties that are difficult to predict. 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 your touchstone phone.
I now hand the conference over to Mr. Vikrant Kashyap from Asian Market Securities. Thank you. And over to you sir.
Vikrant Kashyap — Analyst
Thank you. Good evening everyone. Thank you for joining the Q4FY25 earning conference call of Office Space Solution Limited today we have on the call Mr. Ramit Ramani, Chairman and Managing Director, Mr. Sumit Lakhani, Deputy Chief Executive Officer and Mr. Ravi Duga, CFO. I now hand over the call to Mr. Amitramani. Thank you. And over to you sir.
Amit Ramani — Founder and Chief Executive Officer
Good evening and very warm welcome to everyone present on the call. Along with me I have Mr. Sumit Lakhani, Chief Executive Officer, Mr. Ravi Dugar, Chief Financial Officer and SGA, our Investor Relations Advisors for the Q4 and full year FY25 results. We have uploaded our presentation on the exchanges and I hope everybody had an opportunity to go through the same. To start, I’d like to extend my heartfelt congratulations to Mr. Sumit Lakhani on his appointment as Chief Executive Officer. In his new role, he will oversee P and L daily operations and customer centric initiatives in addition to leading our sales, marketing and supply acquisition efforts.
This leadership transition makes a major milestone in our journey to transform office into a future ready world class organization. Sumit has been instrumental in office success story bringing a strong grasp of our business, customer needs and company culture. His strategic clarity, collaborative spirit and drive for innovation make him exceptionally well suited for this position. I am confident that under his leadership it is we will maintain strong momentum and continue executing with excellence across all fronts. Over the years, Sumit has played a crucial role in shaping our brand, customer experience and go to market strategies. His elevation is a natural step towards aligning with our vision of long term growth and greater agility in a fast evolving business landscape.
As part of this transformative chapter, we are also strengthening our leadership team by welcoming seasoned professionals from reputed organizations adding depth, diversity and domain expertise that will further fuel our next phase of growth. Let me start with a brief overview of the business for the year. We are pleased to share that we have delivered a strong financial performance in FY25, achieving a year on year revenue growth of 42% to 1208 crores, surpassing our initial revenue guidance of 30% set at the beginning of the financial year. This remarkable growth was driven by a strong performance in all our service segments.
Our EBITDA demonstrated strong momentum growing at 64% year on year to 402 crores with a margin of 33.3% representing an improvement of 440 basis points over the same period last year, supported by enhanced operating leverage and exceeding our initial guidance. During the year our co working and allied services business delivered robust growth at 48% to 916 crores contributing to 76% of our total revenue. This performance was primarily driven by successful slate of newly added seats, sustained improvements in occupancy across our established centers and strong momentum in our food and beverage business. Meanwhile, the construction fit out projects including our design and build business experienced a growth of 36% reaching a total of 278 crores and accounting for about roughly balanced 23% of the revenue.
As we take a moment to reflect on the journey that we have had in FY25, it is clear that Office has truly transformed into a dominant player in the flexible workplace sector with a strong presence across India. We have come a long way driven by our commitment to continuous improvement, operational excellence and a deep understanding of the changing need of the modern workplace. Over the past year FY25 we have made significant progress on several fronts. On the co working side in FY25 we have focused on building capabilities by adding approximately 39,000 seats setting the stage for next phase of our growth.
We have also been able to strengthen our client base welcoming marquee names such as National Stock Exchange and several GCCs. I’m happy to share that we have successfully onboarded three prominent global organizations at our premium centers in Hyderabad. These partnerships reflect our ability to meet the complex large scale needs of global businesses and reinforce our position as a preferred partner for innovators forward looking organizations. We have expanded into high potential tier 2 cities such as Guwahati and Lucknow, tapping into emerging business hubs and capturing our new growth opportunities. We have also enhanced our premium elite offering, staying true to our promise of providing high quality, tech enabled and beautifully designed workspaces.
On the design and built business, we have accelerated our capabilities allowing us to deliver fully customized workplace solutions from initial design concepts to final execution perfectly tailored to our client needs. At our core we are an end to end workplace solutions provider built on an asset light high margin model. This approach has allowed us to stay agile, optimize cost and offer unmatched flexibility to our clients, helping us against changing market dynamics while maintaining our premium quality. As we kick off this new financial year, it is important for us to set a solid foundation for FY26, one that will fuel our success not for just this year but well into FY27 and beyond.
This is about more than just hitting our immediate targets, it’s about laying the groundwork for long term scalable growth that firmly positions office as a true leader in flexible workplace industry. To do this we are focusing on building a strong ecosystem that together focusing on co working as well as allied services and our design and build businesses in the co working segment. Our strategic priority is to strengthen our position as a preferred partner for delivering large scale tailored workplace solutions that address the unique requirements of our enterprise clients. To support this, we have expanded our team with seasoned senior professionals to strengthen enterprise sales and business development.
The focus would be in building nurturing relationships with large enterprises, managing strategic accounts and driving the profitability of our co working and managed office offerings. Last year we were able to onboard multiple GCCs that entered the Indian market. We will continue to foster a relationship with such global organizations to help set their first offices in India. Our elite products specifically targeted for GCCs has been received very well and we will continue to establish new elite centers in key micro markets as we go forward for the co working demand. We plan to launch our Updated Design Design 6.0 to meet with the evolving needs of today’s modern workforce.
I strongly believe that our structured approach and deep understanding of the client needs will enable us to tap into every workspace need at today’s workforce. Another key focus area for us this year is the continued expansion of our design and build capabilities. We are proud to already be the preferred partner for DNB Solutions in IT its segment. Building on this strong foundation, we are now expanding our portfolio to cater to a broad range of sector and significantly larger mandates. To enable this growth, we have bolstered our leadership team with senior professionals across design, project delivery and business development.
These strategic hires bring deep sectoral expertise and are already playing a pivotal role in scaling our operations and unlocking new client relationships. In parallel, we are also embracing innovation at every stage from fostering design renderings tools to immersive VR walkthroughs ensuring elevated client engagement, higher conversion rates and shorter turnaround times. These advancements will position us to win more complex projects across verticals and further cement our leadership position in the DNB space. Additionally, our scale nationwide presence and ability to serve clients across all segments through our three format workplace model give us a distinct advantage in scaling high margin allied services.
This ecosystem approach allows us to drive deeper monetization, enhance stickiness and deliver differentiated value to our customers. Office Cafe operates 200 plus cafes across centers, serving as a vibrant hub for community and convenience. This year we are expanding the model to serve external clients, opening to new revenue for the FNB led growth. Office Tech Labs, launched in FY25 is our integrated IT service arm offering network infrastructure, management and user solutions amongst other services with a very strong early traction. We plan to scale this aggressively in FY26. Our transportation service, powered by a strategic partnership with Eco Mobility, offers customized sustainable commute solutions for enterprises.
This is expected to emerge as a key driver of client satisfaction and retention. Under Mobility solutions, we have introduced innovative offerings like the Hub to cater to hybrid and on the move professionals. With a robust network of 600 plus meeting rooms already in place, this vertical is poised to significantly scale and impact in FY26. We have also introduced event management services for clients that are evolving into turnkey solutions for corporate events, town halls and activations. It enhances client engagement while monetizing underutilized time and space across centers. Our approach for FY26 will be a two pronged strategy.
Having expanded our capacity in FY25, our focus in the first half of FY26 will be on executing our current pipeline driving stronger occupancy rates. This disciplined execution will lay a strong foundation for the second half where we will prioritize strategic capacity expansion, carefully selecting high potential locations to capture emerging demand and optimize long term returns. We believe that the commercial real estate market has seen rapid growth in both sales and rentals over the past few years. We are confident in sustaining our current trajectory of strong revenue growth backed by continued demand across our core business segments and a robust pipeline of opportunities.
We remain focused on driving further improvements in EBITDA margin through operational efficiency and scale benefits. In parallel, we will continue to expand our footprint at a steady pace, maintaining the momentum in seed addition to support our long term growth strategy. Let me hand it over to the call to Sumit Fakhani, our CEO to share Q4FY25 Operational Highlights Good evening everyone.
Sumit Lakhani — Deputy Chief Executive Officer
Thank you Amit for your kind wishes. I am Deeply honored to step into the role of CEO at this pivotal stage in office journey. It’s been a remarkable experience growing alongside the company. From our startup roots to becoming India’s leading flexible workspace provider. I’m excited to further our impact, drive new growth and continue creating meaningful value for our clients, partners and teams. Together, we’ll build on our strong foundation and seize new opportunities to shape the future of work in India. Now I would like to share with you the operational highlights for Q4 FY 2025. On the supply side, I am pleased to share that we successfully achieved our FY25 target, marking a significant milestone in our growth journey.
During the year we added approximately 39,000 new seats, bringing our total capacity to around 134,000 operational seats across 208 centers nationwide as of March 2025. Including centers currently in the fit out phase and those under LOI, our total capacity now stands at over 164,000 seats across 243 centers covering an expansive 8.4 million square feet. We have also strengthened our footprint, expanding into nine tier 2 cities and five new micro markets, allowing us to better serve the growing demand for flexible workspaces in emerging business hubs. As of March 2025, our exit month occupancy reached 73% while centers operational for over 12 months recorded a solid 84% occupancy, underscoring the sustained demand for our premium workspace solutions.
Year on year, our growth remains robust. Operational seats and centers grew by 41% and 30% respectively. Total seats and centers increased by 38% and 28% respectively. Looking ahead, we have a strong expansion pipeline with signed LOIs for 13 new centers, adding approximately 11,000 seats and 0.6 million square feet of chargeable area. On the demand side, we signed contracts for 13,000 new seats in Q4 FY 2025 and 53,000 new seats in FY 2025 overall, reflecting a well diversified revenue base. Approximately 66% of our occupied seats are taken by large corporates and MNCs, 20% by SMEs, 13% by startups and the remaining share by freelancers.
Notably, 40% of our clients operate across multiple centers within our own network. The average client tenure is 33 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 3,000 active clients as of March 31, 2025. 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 afternoon everyone and a very warm welcome to everyone. Let me give you a quick overview on our financial performance. For Q4 of FY25 our consolidated operating revenue stood at Rupees 340 crores which is a growth of 46%. On a YoY basis the operating EBITDA stood at 116 crores which is a growth of 73% on a year. On year basis the Margins stood at 34.1% as against 28.9% in Q4 of last year. Same period which is a growth of almost 520 pips. In Q4 of FY25, PBT excluding exceptional items is Rupees 12 crore versus PBT of Rupees 1 crore in Q4 of last year on the IGAAP equivalent basis which is adjusted for India’s 116116 lease rentals, India’s 109 and India’s 102.
For Q4 FY25, a consolidated operating revenue stood at 339 crores which is a growth of 46%. On a year. On year basis the operating EBITDA stood at rupees 48 crores, a growth of 125%. On a YoY basis the margin stood at 14.2% as against 9.2% in in Q4 of last financial year, a growth of 500 basis points. For Q4 of FY25, IGAAP equivalent depreciation stood at rupees 24 crores. Now coming to full year FY25, we are pleased to report a 42% year on year revenue growth in FY25 to rupees 1208 crore surpassing initial guidance of 30% set at the beginning of the year, the operating EBITDA stood at rupees 402 crore, a growth of 64%.
On a year. On year basis the margin stood at 33.3% as against 28.9% in FY24 which is a growth of 440 basis points. This performance not only demonstrates strong operating leverage but also exceeds the guidance we set at the beginning of the year. The full financial FY25 on the IGA equivalent basis. Again adjusted for India’s 116, 109 and 102. Our consolidated operating revenue stood at 1206 crores, a growth of 43% on a year. On year basis the operating EBITDA for the full financial year stood at rupees 168 crore, a growth of 146% on a year.
On year basis, the Margins stood at 13.9% as against 8.1% for the full financial year. FY24 a growth of 585bps for FY25 IGAAP equivalent depreciation stood at rupees 81 crores and the PBT excluding exceptional items is at 97 crore versus rupees 13 crore in FY of 24 as of 31st March 2025. We maintain a strong liquidity positions with rupees 130 crore in cash, bank and FD balances. Our gross debt stands at around rupees 23 crores only resulting into a debt equity ratio of 0.05. A notable improvement was from 0.13 in March 24th. Additionally, our net debt to equity ratio has improved to minus 0.22 compared to minus 0.10 in the same period last year.
With continued improvements in profitability and liquidity, we expect to remain in a very comfortable position. On debt to equity ratio. Our return on capital employed also improved rising from 43% in FY24 to 62% in FY25 underscoring the strength of our financial performance. This is all from my end. We now open the floor for question and answers.
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 then one on their Touchstone phone. If you wish to remove yourself from the question queue, you may press Star then. Two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question comes from the line of Girish Chaudhary from Avendus Park. Please go ahead.
Girish Choudhary
Yeah. Hi, good evening Amit and Sumit. Firstly congratulations Sumit on your elevation. Much appreciated. My first question is on your strategy, right fiscal 26 strategy which you mentioned will have two phases. If you can share more details across both the phases. Like the first phase, what’s the kind of occupancies we are ramp up we are looking at and the margins which we can expect. And then the second phase, what’s the growth you’re looking at in terms of seat additions for the year?
Sumit Lakhani
Yeah. Thank you Girish. So Girish, in terms of the way we look at our current business, if you would see we are already at 134,000 odd seats and with respect to there are almost about 18,000 seats which are under fit out and further about 11,000 odd seats where we have signed Lois. So we have a very clear visibility of another 30 odd thousand seats. So sitting today, I would say we’re very confident that we will add a similar number of seats in FY 2026 like we added in FY 2025. So from that perspective, we are fairly, you know, in a comfortable kind of a spot.
The way we look at business right now is the first half we will use primarily to drive higher occupancies across the centers, which went live in Q3 and Q4 of last financial year. So that we don’t miss out on our key KPI, which is that the 12 month plus centers need to hit about 84% or you know, 85% kind of occupancies. So at a blended level, this could be in a similar range that we will hinge between 72 to 74% kind of occupancy in H1 around in H2. We will look at the overall macro and if required, we may, you know, even accelerate our kind of supply position depending on the situation at that point of scenario.
So this is how what we say in a phase wise manner overall as of today, if I have to give a guidance in terms of seats, it would be similar as FY25 in terms of revenue growth where we sit today, it’s going to be closer to about, at least about, you know, 30 odd. And with respect to margins, I think it will be similar to what we did for FY25 with a bit of a upward bias as well.
Girish Choudhary
Got it, got it. Specifically on fiscal 25, like you’ve added close to 40,000 seats, right? You’re close to 1:35 now. If you can share what’s the occupancy in those 40,000 new seats for the year. Just to understand this little more deeper how the ramp up will flow through. And I’m assuming that 40,000 seats will also will have a much lower margin. Right. For fiscal 25.
Sumit Lakhani
Yeah. So see this? 40,000 odd seats came across all the four quarters scattered across from month to month. I don’t have an exact occupancy number of these 40 odd thousand seats. But typically the way we look at tracking is we try to hit about 80, 85% occupancy in a center in a period of nine to ten odd months of its start date. So that’s the way we look at coming around. And yes, the new centers, they have a bit kind of a drag around on the margins to certain extent. We still generally, if you look at Our supply acquisition strategy, we at the initial period also structure some level of operational rent free period in our leases so that the impact or a drag on the P and L is a bit subdued during the occupancy build up period.
Girish Choudhary
Got it, got it. And lastly the other ancillary businesses, right. Which you have significant plans to scale up if you can give some roadmap across these verticals, big design unbuild and let’s say the other ancillaries which includes the mobility and fnb. I mean what can we foresee over the next two, three years in terms of the scale up?
Sumit Lakhani
Sure. So primarily the way we look internally in our business is design and build is a full fledged separate vertical which has become large. In terms of the overall industry perspective of this vertical, it’s growing almost closer to about a CAGR of about 20% to 25% year on year backed by higher leasing in the commercial real estate sector. So as you would have seen even in the last financial year we have grown almost about 30 plus percent in this segment. So we continue to grow. Look at a strong growth in this segment. As Amit mentioned, we primarily are focused on now a bit larger kind of volume of business in this segment with a larger kind of.
Yeah. Then the second segment which is the alternate space revenue is the is the second kind of a segment for us here we are adding new offerings which includes the transport, the mobile transportations which include a more focused on fnb. Apart from our own centers, we are also focused doing for third party scenario. Currently the ASR contribution is almost about 11 odd percent of the space revenue. Our intent is to keep growing it at a higher pace. Our overall thought is that the ASR would be growing at a much higher pace on the overall revenue as compared to the space seat trail revenue growth for.
Girish Choudhary
And in terms of any numbers.
operator
Girisha, May we request to return to the question queue for follow up questions as there are several other participants waiting for their turn. Thank you ladies and gentlemen. In order to ensure that the management is able to address questions from all the participants in the conference, please restrict your questions to two per participant. If you have any follow up questions you may rejoin the queue. Our next question comes from the line of Mr. Vikrant Kashup. Please go ahead.
Vikrant Kashyap
Hi sir, I have a couple of questions. First on the trend on the co working industry and GCC space and how are we positioning ourselves to capture these opportunities. Could you please also share some market deals that reflects office leadership in this space?
Sumit Lakhani
See overall if you look at the Indian flex market. The India flex market is expected to reach closer to about 600 billion INR by 2027. It’s about 20 to 25% CAGR expected over the next five years. And at office we are extremely well positioned to ride and lead this wave. Now if you look at couple of trends which are coming around in the market and which are becoming strong, behavioral, permanent kind of, you know, changes. One, the flex has gone mainstream. So enterprises are adopting Core plus flex and hub and spoke models. Not just to save cost but to offer agility, faster deployment and employee centric work environments.
Second, GCCs are accelerating their India strategy. There are almost over 1800 GCCs already operating in India and more entering each year. So the demand for plug and play scalable tech integrated workspaces has exploded. So projections estimate that India’s GCC market will expand to almost about 100/plus billion dollars by 2030. So with the number of centers increasing to closer to about 2,500 then I would say tier 2 is a next flex boom. So enterprises and GCCs are also looking beyond metros into tier 2 cities to access talent and manage their cost. So tier 2 XP stock is expanding fast and it is projected to contribute almost equivalent to about 30% of the total market by 2028 2029.
With respect to office, I would say experience is a new differentiator. Generally the clients are no longer looking at comparing desk costs. They are evaluating design sustainability, service quality. And so we have been ahead of that curve from our perspective. The other differentiating factors are one the network effect. We operate about 200 plus centers with a presence across 18 cities and 58 micro markets. It’s far higher than any other competitor. Then we have a very multi tiered product strategy from a standard office center to a gold and elite formats. We cater to, you know, everyone from a young startup to a global gcc.
Few players in India offer that breadth with consistency. Then a large differentiation for us also is our supply acquisition model which is the managed aggregation model which is almost about 67% of our portfolio. It allows us to scale quickly and in a more capital efficient manner. And then I would say we are not just now offering space, we are offering an end to end platform with design and build mobility, IT services and hospitality layers across our ASR ecosystem.
Vikrant Kashyap
Okay, since you highlighted your elite version has a strong demand in GCC space. So out of the new seats or space that you have signed, how much has been deployed to this elite version?
Sumit Lakhani
So currently we have three centers which are operational under Elite. One in Hyderabad and two in Bangalore. And the plan this year would be to add another four to five Elite centers across India. And that basically would be somewhere around. Overall of our portfolio, almost 85 to 86% would be a flagship product and about 14 to 15% would be a combination of are Office Gold and Office Elite.
Vikrant Kashyap
Okay, and the last question on your tie up with Ecos Mobility. So what are the your thought process of the management behind this deal and how you want to scale this portfolio?
Amit Ramani
So with respect to the collaboration with Ecos Mobility, it is primarily centered around solving a very real and growing need for enterprise grade employee transport solutions. Especially in tier one cities where commute times can be long, unpredictable and there’s a very a major friction point for productivity. So what we did is by integrating Ecos tech enabled transport capabilities with our workspace offerings, we are able to provide a seamless end to end solution that covers not just where people work but how they get to work. So it strengthens our overall employee enterprise value proposition and enhances stickiness and monetization opportunity for us.
So it’s a natural extension of office as a service ecosystem for us.
Vikrant Kashyap
Okay, thank you and wish you all the best.
operator
Thank you. Our next question comes from the line of Adidev Chaktopati from ICICI Securities. Please go ahead.
Adhidev Chattopadhyay
Yeah. Good evening everyone. First of all, congratulations Sumit for your elevation in your role and to the management for a great year. So the first question I have is on this memorandum of association where we have mentioned we’d like to get into retailing of furniture and also do some backward integration. Could you help us understand what are the sort of cost saving synergies we’ll have? And when you are this retail portion, will it be a separate vertical or will it be part of your design and build a vertical? That is the first question. Thank you.
Sumit Lakhani
The furniture piece of our business is a natural progression towards a backward integration. As you saw, we added approximately about 39 odd thousand seats this year which is a captive demand. And we influence our revenue for design and build roughly was another 280 odd crores. So we influenced another 20,000 desks that we were basically responsible for either as part of design or as part of design build directly or indirectly with our clients. We feel that that’s a very, very large captive audience that’s available with us. And when you say retailing, obviously the plan is not to open up retail stores as you know you would think about it, but it’s primarily to focus on the B2B space in the furniture business.
Clearly when we start we are focused on primarily focusing on modular chairs and some loose furniture and then further expanding our basket as we go forward. But the day one ambition is to obviously service our captive demand. Yes. At the same time we can offer this as part of the design and build solution. And at some point in the future we could also offer this as a standalone solution where we would just be selling furniture. If you look at our portfolio Today we have 3,000 odd client companies that sit with us and a large portion of their portfolio is in conventional space. So we believe that the same decision maker that is taking a decision for co working managed office mobility is the same decision maker for furniture as well. So we feel that this is something that will help expand into an already established, very strong established client base.
Another touch point with our client and help stickiness and obviously the continued relationship with the client. In terms of margins, Aditya, it’s a bit soon because we are in the process of going through the whole setup. Maybe in the next couple of quarters I can give you more clear guidance. But clearly currently I’m buying from third party. So the third party is making some margin. So even if I was to save some margin there, I think it makes complete sense. Plus it becomes a new service line for us. But I’ll give you a clear guidance on the margin maybe in the next couple of quarters.
Adhidev Chattopadhyay
Sure, sure. So just a housekeeping question currently, what would be our capex per square feet on either a chargeable or a carpet area basis would just give us a ballpark number on our capex what we are incurring right now.
Sumit Lakhani
So closer to about 1670 to 1680 on super. 1680 on super built up is the kind of, you know, ballpark capex for us for a pure standard office product.
Adhidev Chattopadhyay
Okay. Okay, fine, fine. So I’m just following up on that. So any capex guidance you’d like to give for 26? And also we have noticed your paid taxes for the first time at least on the pnl. So are we out of our tax shield? Past losses and what would be the effective tax tax rate for 26? Yeah, those are my questions.
Ravi Dugar
Hi, this is Ravi this side. So on the taxation piece the small amount which you see over there is because of the subsidiary taxation as far as office main entities concerned. Subsidiary for us is almost like 2% of our revenue. However, as far as the office main entity is concerned, we are still in the tax. We still have some carry forward losses which we plan to utilize in the current Year. So most likely either in Q4 of the current year, in Q1 of the next year, which is FY27, we would be out of this. The the brought forward losses.
What was your first question?
Adhidev Chattopadhyay
I’ll just complete this. So in 26 also there would be no tax outgo. Right. We’ll still be in the tax children. Just to understand in FY20.
Ravi Dugar
Yes. Most likely, yes. For office mean entity. Yeah.
Adhidev Chattopadhyay
Okay. Okay. And just I just wanted a CapEx guidance number for FY26 if you could share that the overall CapEx which we would envisage to do our share or I don’t know how you want to. Whatever shows up in the balance sheet.
Ravi Dugar
So like I mentioned, in terms of the total number of seats for FY26, what we are guiding right now is almost similar to FY25. So the overall CapEx spend will also be in same range as FY25.
Adhidev Chattopadhyay
Okay. We should just use that as the benchmark.
Ravi Dugar
Yes, fine. Yeah.
Adhidev Chattopadhyay
Okay, got that. I’ll come back in the queue for more questions and all the best.
operator
Thank you. The next question comes from the line of Shivkumar Prajapati from Ambit Investment Advisors. Please go ahead.
Unidentified Participant
Yeah, good evening sir. Thanks for having my question. My first question is we have expanded into tier 2 cities like Guwahati and Lucknow. So what’s the criteria do we use to select new tier 2 tier 2 market?
Amit Ramani
Yeah. So you know, if you look at the whole, you know, overall strategy for us, so India’s growth story obviously over the next decade is going to be written beyond the seven cities. Whether it’s digital adoption, startup activity, GCC expansion or any of the rising talent pools, tier 2 cities are clearly leading some of the charge there. And what we believe, the reason, the way we are at least structured is that we believe, including Vijay Vada, which we’ll open this year, we believe that the future of, you know, the 4 trillion to, you know, 10 trillion economy is going to be written on the back of the tier one cities and some of these 10 or tier two cities that we are looking to be present in.
The criteria that we use is the level of, you know, demand that we assume for those areas, the kind of pipeline that we have from our current client base. We also do an analysis which basically gives us a sense that any city that we expand into should be able to have at least four to five centers because we run a complete operations team and obviously a sales team in that city. So there has to be a certain operating leverage that has to come into that city basis. These criteria we basically look to expand. But current guidance I think at least for FY26, other than Vijay Wada which we have already selected, I don’t think we are looking to expand into any other tier 2 cities.
Unidentified Participant
Oh great. So my next question is on Elite. So we have launched Elite for the gccs. So how does, how does our offering differentiate from the competitors? And what’s the expected revenue contribution from this segment in the coming years the two or three years down the line?
Amit Ramani
So, so the whole concept of starting Elite came as a perspective of a multi tiered product strategy for us. So we have a standard offering which is a more value product then a Gold is a bit more premium and Elite becomes a higher premium product. The idea of creating Elite was that we intend to offer the similar specs of design and physical spaces as the GCCS and larger Fortune 200 or Fortune 500 companies are utilizing in their base home locations. So that was the primary kind of differentiation. If you look at competition, everyone has a kind of a product and a value, you know, positioning.
So an Elite would compete with a couple of players like you know, let’s say a B work or a TEC across various market in those kind of product positioning. And as Amit mentioned, as of today we have three Elite centers which are live for the whole financial year. We expect we would have almost about eight to nine Elite centers which will be live by end of the year. And in terms of the overall revenue contribution it would be, you know, a bit lower because we would have almost about 250 plus odd centers by end of the next financial year.
The margin profile is similar to the kind of model we select. So if the Elite center is in a straight lead model, we expect that it will generate 30% plus kind of a center level, EBITDA margins. And if it’s in a managed aggregation model, it would be closer to about 23 to 27% kind of.
Sumit Lakhani
The other small point I’ll add here is, you know, obviously becomes big from a customer standpoint is the experience that we offer. So if you look at our some of the centers today, the kind of amenities at the flagship level or the Gold level and as well as on the Elite level, they offer a multitude of, you know, offerings to our customers at different price points. Specifically on Elite we have the, you know, this whole training room available with us on fiat services which take care of a lot of different elements. We have spaces that essentially service their training requirements, their recreational requirements and I think to that end we have a full focus on wellness in terms of the quality of infrastructure is one.
But obviously overall how we are providing this experience to our customers and as we were discussing earlier, our strong focus is to create very strong experience and engagement with the customer. And as a result of our strengthening of our, you know, food and beverage offering or you know, the transportation solutions, it becomes a one stop solution for our clients. So I think overall, yes, great infrastructure, well designed spaces across the three offerings but at the same time delivering an experience which is exceptional and doesn’t exist with any of the other competitors.
Unidentified Participant
Great sir. So my last question is on capital allocation. So how do we prioritize between the you know, seat additions or say expanding the office transfer or transform or office care businesses. So just want to understand like what proportion of the capital would go towards seed additions and say other allied services that we offer.
Amit Ramani
So the primary capital that we deploy today, right? I would say almost 95% plus of it is towards our seed expansion. Right. I mean that is the primary investment that we do when it comes to transform. That’s a service, right? It requires limited capital deployment. Yes, there is some working capital requirement because it’s a design and build business for a B2B space but outside of that I don’t think it requires much capital investment as we would call the hardcore capital investment and office care business. Last September we had already exited out of that business by selling it to a large operator that primarily is in the facility management space.
So we have no capital deployment towards the office care business anymore.
Unidentified Participant
Okay, got it sir. Thank you.
operator
Thank you. Your next question comes from the line of Chintan Sheth from Girig Capital. Please go ahead.
Chintan Sheth
Thank you for the opportunity and congrats on the good execution. My question is basically on the capex number which we bid almost around 200 crores, slightly higher than what we had planned for there, around 140 to 150. So despite we are adding, we have added around close to 40,000 which we have guided. Trying to understand why the capex spend was higher than our earlier estimate despite addition that in line with guidance.
Ravi Dugar
Yeah. Hi Chintan, this is Ravi this side. Yes, the guidance given was in the range. Yeah. Yes, the guidance given was in the range of Rupees 140, 250crores at the beginning of the year. However, as mentioned in our last earnings call that the company will continue to evaluate the capex spends depending on our growth aspirations and we can have higher Capex versus versus initially guided. We continue to see very Strong momentum across all the sectors. That said, the reason for higher capex are as follows. One, it was due to some of our enterprise deals where we have had high capex spends on some of our properties.
Also as was mentioned in the last earnings calls, we rolled out Elite by office centers. We have also invested in that format which has resulted in higher CapEx expense. These are the broadly two reasons for having a higher KP expense versus initial guidance.
Chintan Sheth
Okay. Yeah, sorry sir, go on.
Ravi Dugar
That said the capex per seat again it remains in the same range of around 52 to 55k for our entire portfolio.
Chintan Sheth
Got it, got it. And second question is on the concierge service with Ecos. How I understand that it’s an add on service and similar services to your clients. How should we look at monetizing whether it will be percentage share we will get from Ecos or without incurring any incremental cost because they will be operating and they will be managing the entire transit part. We’ll just provide the source or the clients employees to their network and make a cut out of it. That will be the broad understanding of the agreement.
Sumit Lakhani
So Chintan, currently we view this as a pure, you know, convenience for our customer offering. Right. I don’t think the intent, at least one for us is to look at that as a revenue or a margin improvement impact for FY26 at least we feel that this is something that our customers demand today. It is something that ECORT Mobility being another parallel player already listed in the space with a very strong reputation. I think the two partnerships are more around offering a convenient solution to our customers. Our customers are asking us today to provide not only the infrastructure, they are also asking us for IT solutions, they are also asking us for transportation solutions.
So this becomes more of a convenience FY26 then obviously once the partnership becomes stronger we can give some guidance for the future years. But today we didn’t come at it thinking that it will have a huge impact on our revenue or our margins. Yeah, please go ahead.
Chintan Sheth
Yeah, yeah. It will start slow but as it catches up we can expect some, you know, margin accretion.
Sumit Lakhani
Of course, of course.
Chintan Sheth
Right. And lastly, no guidance for.
Sumit Lakhani
Yeah, no guidance for FY26 because we are looking at it as a convenience factor. We are obviously piloting it at multiple locations in the network today. But yes, you can potentially see in FY27 and 28 probably an impact of this partnership.
Chintan Sheth
Okay. And lastly on the bookkeeping side, what is the zone?
operator
Maybe request to return to the question queue for a Lot of questions please. Thank you. Our next question comes from the line of Uncle Shagarwal from Search Capital. Please go ahead.
Unidentified Participant
Yeah, hi sir, thank you for taking my question. So firstly, can you let us know what is the broader, broadly the cockpit overhead currently on an NDS level?
Sumit Lakhani
Yeah, hi, is this Ankush?
Unidentified Participant
Yeah, yeah.
Sumit Lakhani
The corporate overhead is in the range of around 10%.
Unidentified Participant
10% of overall revenue.
Sumit Lakhani
Yeah.
Unidentified Participant
Okay. And are we seeing any kind of operating leverage on this? Like say you can broadly just say last year, what was it and how much is it now?
Sumit Lakhani
Yeah, so we have already seen a lot of improvement which has happened between the two years. So FY24 versus the current year, we have already seen an improvement due to this operating leverage by almost like 200bps to 300bps is what the range has been. And going forward we continue, we’ll continue to see some improvement on that side as well.
Unidentified Participant
Secondly, this quarter we have seen our profitability reduced sequentially. I’m looking at India’s numbers. So wanted to understand is there some elements of seasonality wherein Q4 have some higher expenses or is just normal routine business that some cost would have gone here and there, that’s why it’s down?
Sumit Lakhani
Yeah. So Ankush, as we said, we continue to see a very strong momentum in demand across all the sectors. Our overall operating metrics continue to improve. But what you are referring is primarily due to some non operating nature items. So in the quarter we had a one time charge of rupees 4.5 crore due to some accelerated hits. What we have taken on few of our centers. This is as part of our strategy of continuously assessing our portfolio at the time of lease renewals. So that’s a one time charge what we have taken. Additionally, some of our properties have been renewed in Q4.
This has resulted in a higher rou and a lease liability creation in the current quarter as a result of which there is a higher charge.
Unidentified Participant
Are we looking at India?
Sumit Lakhani
Yeah, I’m talking about the index numbers only.
Unidentified Participant
Okay.
Sumit Lakhani
Yeah. So these are primarily the two reasons why you see a slight dip.
Unidentified Participant
Okay. And just one more thing, like typically, like we have mentioned that the fit out period is generally between 60 to 90 days. So ideally the seats under fit out at the end of any quarter should at least should result in a similar number of more fields being operational next quarter, which is typically not the case. Typically we have half the number of fields that are being operationalized the next quarter. That would obviously mean that we have, we are closing down or moving into renovation For a number of weeks every quarter. So will it be possible for you to start sharing the data like how many seats we have, you know, resolved or moved them to renovation or something.
So. So when you say that we are opening half the number of seats, can you just elaborate that so that I can answer? Yeah. So for example, as of Q3 and we had about 21000 seats under fit out. Okay. Right. Q4, we have operationalized about 3000 seats. So in the past it is broadly half. Right. The number of seats under fit out at the end of April, for the typical end of things, if the number of days is 60 to 90 days is under fit out, it should add being one to one or a little higher. So I’m just trying to understand that.
Sumit Lakhani
Yeah, so I’ll just explain that. So the category, when we are putting under fit out it basically means that the Lois have been signed and we have registered that agreement. Now from the point of registering the agreement to taking the position of the property, there is a kind of a time lag. And then we, you know, take a time lag with respect to fitting out the whole process. The overall fit out process is generally 75 to 90 days. And so that’s the reason when you see the category and under fit out, these centers end up being live in a span of about, you know, three to six odd months.
Unidentified Participant
Okay, but would it be fair to assume that every quarter we would be dissolving is just a clarification of the last part?
Sumit Lakhani
Yes. So what you see as an under fit out, so generally if I am, let’s say giving 10,000 seats under fit out, so every quarter you could assume that 5,000 of those seats will go live.
Unidentified Participant
Okay. Okay, thanks.
operator
Thank you. Your next question comes from the line of Kishore Kumar from Unifi. Please go ahead.
Unidentified Participant
Hello, can you hear me?
operator
Yes sir. Please go ahead.
Unidentified Participant
Yeah, thanks for the opportunity and good set of numbers. So can you tell me the actual rent based on the material pass?
Sumit Lakhani
So we’ll just ask Ravi to give you that exact number. We just look.
Ravi Dugar
Yeah. Hi Kishore, this is Ravi this side. So the actual rent paid on the lease leases is in the range of around 245 crores. So this is appearing as depreciation and finance cost. And the rent in the other expense Schedule is around 111 crore crores. The sum total is around 355 crores for the full year.
Sumit Lakhani
Yeah, yeah, yeah.
Unidentified Participant
Got it, sir. And on the mature center, in comparison of mature center and the new centers, how is the rent spread moving directly. So if I take the renter paid for the seat, otherwise the revenue that we receive what is the spread the for the mature centers in comparison with the new centers?
Sumit Lakhani
Yeah. So on a matured center the contribution margin would be in the range of around 24 to 25%.
Amit Ramani
So let me just take, take that. So in case, depends on the model. So the mature centers typically which are 12 months or more, if it’s a straight lease center, the margin would be somewhere around 30% plus if it’s a managed aggregation center at that stable state occupancy that would be somewhere around anywhere between 22 to 24% and then across obviously the overall business. So if I was to only look at 12 months or more blended between the two models, it will be somewhere around about 25 to 26%. But since the portfolio is obviously a combination of less than 12 more than 12 month centers, so clearly obviously the margin profile is a bit lower when you look at it at a blended level.
Unidentified Participant
Got it sir. Got it.
operator
Thank you ladies and gentlemen. That was the last question for today. I now hand the conference over to Mr. Amit Ramani for closing comments.
Amit Ramani
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 investorization advisors. Thank you.
operator
Thank you. On behalf of Office Space Solutions Ltd. That concludes this conference. Thank you for joining us. You may now disconnect your lines.