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Since its stock market debut in late May, workspace provider Awfis’s share price has nearly doubled to Rs 773.55, growing 91.9% from its listing price of Rs 403.

The company’s annual report, which was released recently, offers insights into why investors have favoured it.

Awfis’ revenue from operations increased 55.77% in FY24 to Rs 849 crore, from Rs 545 crore in the previous year. Its revenue also more than doubled between FY22 and FY23.

“In the first half of CY2024, we saw unprecedented office market activity, with 34.7 million square feet of office space being utilised. Flexible spaces now comprise 21% of this dynamic market segment, with coworking deals accounting for a remarkable 72% of these flexible spaces,” said Amit Ramani, Chairman & Managing Director of Awfis, in the annual report.

The company’s EBITDA, which measures earnings from its core business before accounting for interest, taxes, and depreciation, grew by over 53.9% in FY24 to Rs 271 crore.

Awfis has reduced its losses significantly over the past few financial years. In FY24, the company, backed by Ashish Kacholia, saw its losses more than halve to Rs 18 crore, down from Rs 47 crore in FY23.

The profit after tax (PAT) margin, which indicates the percentage of revenue a company retains as profit after all expenses and taxes, has also improved in recent years. In FY22, the company’s costs exceeded its revenue by 20.5%. This reduced to 8.2% in FY23. In FY24, the PAT margin stood at a negative 2%.

Awfis has increased its efficiency in utilising capital to generate profits. In FY24, for every rupee invested, the company generated 42.8 paise of additional income, resulting in a return on capital employed (ROCE) of 42.8%, up from 25.3% in FY23 and 1.8% in FY22.

Awfis mostly operates on an asset-light managed aggregation model, wherein the developer or owner of the office space bears a portion of the capital expenditure in exchange for a share of revenue or profits. This model enhances resilience during market downturns, such as the COVID-19 pandemic, when demand for office space is low. This approach is in contrast to the straight lease model, where office space providers bear the entire capital expenditure, Ramani had said in a pre-IPO meet in May.

Almost 66% of Awfis’ portfolio is in managed aggregation, the company said in its annual report.

However, the profit sharing model comes at the cost of reduced EBITDA margins, Ramani had noted.

Awfis’ EBITDA margin is around 31%, while competitors such as Bengaluru-based Tablespace and Gurugram-based Smartworks operate at almost double the EBITDA margin, according to Awfis’ RHP.

As of FY24, Awfis had 110,540 seats across 181 office spaces, serving 2,459 clients. It has 3,498 employees, of which 223 work in operations.