Smartworks Coworking Spaces has reported its strongest quarterly performance in Q3 FY26, marking a decisive inflexion point in its financial and operational trajectory. The company not only delivered record EBITDA and margin expansion, but also returned to profitability, signalling the successful maturation of its enterprise-led, capital-efficient growth model.
From Scale to Profitability: A Structural Shift
Smartworks posted a net profit (PAT) of INR 1.2 crore in Q3 FY26, a sharp turnaround from a loss of INR 16 crore in the year-ago quarter and an INR 3.1 crore loss in Q2 FY26. This marks the company’s first profitable quarter under Ind AS, underscoring a transition from scale-driven growth to sustainable earnings.
Management described the quarter as the company’s entry into a “compounding phase”, where operating leverage, portfolio maturity, and enterprise demand converge to drive profitability, cash generation, and higher returns on capital.
Smartworks Q3 FY26: Revenue Momentum Remains Robust
Operational momentum remained strong across metrics:
- Operating revenue: INR 472.1 crore
- +34% YoY
- +11% QoQ
- Total income (including other income): INR 488.2 crore
- Monthly Revenue Run-Rate (MRR): ~INR 150 crore
Revenue growth was anchored in large-format, long-tenure enterprise contracts and continued expansions from existing clients, rather than short-term or transactional occupancy.
EBITDA at All-Time High, Margins Expand
Profitability improved sharply at the operating level:
- Normalised EBITDA: ~INR 85 crore (record high)
- EBITDA margin: ~18%
- ~150 bps YoY expansion
- Operating cash flow: ~INR 101 crore
- OCF-to-EBITDA ratio of ~1.2x
Smartworks also reported EBITDA of INR 30.6 crore, up 40.4% YoY, with EBITDA margin expanding to 64.75%, reflecting strong operational efficiency across its managed office portfolio.
The ability to generate operating cash flow in excess of EBITDA highlights improving cash conversion and reinforces the company’s self-funded growth model.
Portfolio Maturity Drives Operating Leverage
Operational metrics point to a business benefiting from scale and maturity:
- Total Footprint: ~15.3 million sq. ft.
- Centres: 63 across 15 cities (India and Singapore)
- Clients: 770+ enterprises
- Committed Occupied Seats: ~1.92 lakh
- Committed Occupancy (Mature Centres): ~93%
The growing proportion of Mature centres has been central to margin expansion, as initial ramp-up costs normalise and revenues stabilise.
Enterprise Strategy Enhances Revenue Visibility
Smartworks’ strategic pivot toward enterprise clients continues to pay off:
- Multi-City Enterprise Clients: ~30% of rental revenue
- 1,000+ Seat Client Cohort: ~35% of rental revenue
- Longer lock-ins and tenures improve predictability and reduce volatility
During the quarter, the company:
- Signed LOIs for ~1.7 million sq. ft. of new large campuses
- Closed marquee deals with BFSI, IT, consulting, and global services clients
- Secured supply visibility through FY27, with sourcing underway for FY28
This positions Smartworks less as a cyclical coworking operator and more as a pan-India enterprise workspace infrastructure partner.
Balance Sheet and Returns Strengthen
In Smartworks Q3 FY26, financial discipline remains a key differentiator:
- Net-debt negative position: ~INR 42 crore
- Committed rental revenue: >INR 4,700 crore
- Annualised ROCE: ~21%, continuing its upward trend
A net-debt-negative balance sheet gives Smartworks flexibility to expand without diluting returns or stressing capital.
Smartworks Coworking Post-IPO Performance
Smartworks launched its IPO in July 2025, with a total issue size of INR 582.56 crore, comprising both a fresh issue and an offer for sale (OFS). The IPO received strong investor interest and was subscribed 13.45 times by the final day.
However, the stock delivered a modest performance on listing, debuting with gains of around 9.35%. Despite the lacklustre listing, strong fundamentals tend to support long-term performance, and the stock subsequently gained momentum. Post listing, Smartworks recorded an all-time high of INR 606.65, representing a gain of approximately 49% over its IPO allotment price of INR 407. Currently, Smartworks share price is near INR 465.60, reflecting a correction of about 23% from its all-time high.
Outlook
Shares of Smartworks closed 1.13% higher at INR 479.10 following the results, reflecting investor confidence in the company’s improving fundamentals.
With rising portfolio maturity, sustained enterprise demand, expanding margins, and improving cash generation, Smartworks appears well-positioned to sustain profitability momentum over the coming quarters. As operating leverage deepens across a larger asset base, the company’s transition into a cash-compounding, capital-efficient growth phase now looks firmly underway.
Bottom Line: Smartworks Q3 FY26 marks a watershed moment for Smartworks—where scale has translated into profits, cash flows, and returns, reshaping the company’s investment narrative from growth-at-scale to sustainable compounding.
For more details related to IPO GMP, SEBI IPO Approval, and Live Subscription stay tuned to IPO Central.