Awfis Shares Surge 7% Despite Decline In Broader Market

Shares of coworking space provider Awfis surged as much as 6.9% to reach INR 762.15 during the intraday trading on BSE on Wednesday (October 16), despite the benchmark indices ending in the red for the second consecutive session. 

The stock gave up some of the gains to end the session 5.9% higher at INR 754.85. 

As many as 4.38 Lakh shares of Awfis were traded during today’s session. The company’s market capitalisation stood at INR 5,299.94 Cr (around $630.7 Mn) at the end of the day. 

In the broader market, Sensex fell 353 points (0.39%) to close at 81,501 and Nifty 50 dropped 98 points (0.34%) to close at 24,971.30. This was the second consecutive session of decline, as the Indian equities market continued to remain under pressure over subdued Q2 earnings and foreign institutional investors moving funds to China.

Shares of Awfis, which made their debut on the bourses in May this year at a premium of 13.5% to the issue price, ended today’s trading nearly 75% higher from their listing price of INR 435 on the BSE.

The stock ended in the green in six out of its last eight trading sessions. 

Last month, ICICI Securities increased its price target (PT) for the stock by 11% to INR 839 from INR 757 earlier. It also upgraded Awfis’ rating to ‘Buy’ from ‘Add’ earlier. 

In the same month, Nuvama also gave Awfis a ‘Buy’ rating and a PT of INR 1,013. Nuvama expects favourable market dynamics, capital-efficient expansion, improving cost management, strong balance sheet, and stable management to play out in the startup’s favour moving forward.

Citing the rationale for the increase in PT, ICICI Securities then said that the startup delivered on its two main FY25 guidance parameters – over 30% revenue growth for FY25 and expansion in IGAAP EBITDA margin between 11.5-12% in the first quarter of the ongoing fiscal year (Q1 FY25). 

“With an overall operational positive committed pipeline of 1,27,726 seats (over 1,00,000 operational), we expect continued growth ahead. We estimate 35% operational seat CAGR, 30% revenue CAGR and 48% IGAAP EBITDA CAGR (EBITDA post lease payments) over FY24-27E,” it said. 

On the business development front, Awfis recently announced the launch of two new centres in Bengaluru and plans to set up an additional 3 Lakh square feet of Grade-A workspace in Pune. 

Before that, the startup announced that it entered into a business transfer agreement with SMS Integrated Facility to sell its facility management business ‘Awfis Care’.  

Founded in 2015 by Amit Ramani, Awfis has evolved over the years from being a coworking network to a tech-enabled workspace solutions provider, catering to enterprises, freelancers, startups, and SMEs. 

It posted a consolidated net profit of INR 2.7 Cr in the first quarter of the financial year 2024-25 (Q1 FY25) as against a net loss of INR 8.3 Cr in the year-ago quarter, on the back of strong growth in its business. Operating revenue grew 37.2% to INR 257.7 Cr in Q1 FY25 from INR 187.7 Cr in the year-ago quarter. 

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