WeWork India Management Limited Q3 FY26 Earnings Call Summary

Summary

WeWork India Management Limited - Q3 FY26 Earnings Call Summary Wednesday, January 28, 2026, 11:00 AM IST

Event Participants

Executives 3 Clifford Lobo (CFO), Karan Virwani (MD & CEO), Vinayak Parameswaran (CIO)

Analysts 8 Abhinav Sinha (Jefferies), Adhidev Chattopadhyay (ICICI Securities), Amar Ahir (Raedan Capital), Archit Kalra (Individual Investor), Deepak Purswani (Svan Investments), Nehal Jain (Individual Investor), Shamit (Ambit Capital), Yashas Gilganchi (BOB Capital Markets), Yashowardhan Agarwal (IIFL Capital)

Financials & KPIs

Geographic & Segment Commentary

• Managed Office: This segment has scaled to 26,000 desks across 1.7 million sq. ft. with an annualized run rate of ₹530 crores. It operates on a zero-speculation model where expansion only occurs against committed demand, typically with 3-5 year lock-ins. Management expects this segment to reach 30% of total revenue within 24 months.
• Core Workspace (Flex): Mature centers are operating at 87% occupancy with a revenue-to-rent ratio of 2.8x. The company sold 38,000 desks in the first nine months of FY26 (+41% YoY), indicating rapid adoption of flex spaces by larger enterprises.
• Digital Products: Contributed ₹19.8 crores (+23% YoY) through All Access, virtual offices, and on-demand bookings. This remains a high-margin, low-capex funnel for the broader platform.

Company-Specific & Strategic Commentary

• Dual-Engine Growth: Management utilizes a strategy where “WeWork” branded spaces provide high growth/margins while “Managed Offices” provide stable, long-term contracted cash flows.
• Supply Chain & Execution: Capex per desk for the quarter rose to ₹1.5 lakh (from ₹1.3 lakh) due to bespoke high-end customization for Global Capability Centers (GCCs) where clients pay higher premiums.
• Global Capability Centers (GCCs): 40% of the member mix is now comprised of GCCs. WeWork India has signed MOUs with eight “GCC-as-a-Service” providers to act as their primary real estate infrastructure partner.
• Asset-Light Expansion: 40% of the future capacity pipeline (up to 11.4 million sq. ft.) is already locked through signed leases/LOIs, ensuring demand-backed scaling.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Managed Office Economics

• Question: Why pursue the Managed Office business if EBIT margins are in the low single digits? (Abhinav Sinha)
• Answer: While initial margins are lower due to depreciation, renewals (like a recent 5-year Microsoft deal) flip to high profitability as capex is recovered. These deals provide the cash flow stability needed to raise cheap debt and fund speculative flex growth (Karan Virwani).

Capex and Returns

• Question: What is the breakeven and recovery period for the current capex spend? (Amar Ahir)
• Answer: The portfolio hits operational breakeven at 54.8% occupancy. Capital recovery happens within approximately 36 months, supported by a 32.6% ROCE (Karan Virwani).

Occupancy vs. Traditional REITs

• Question: How does WeWork occupancy compare to REITs at 90%+? (Vikrant Kashyap)
• Answer: REITs are asset-heavy and do not add capacity at WeWork’s rate. WeWork grows 3-4x faster than REITs; if the company stopped adding capacity, it could easily hit 100% occupancy (Karan Virwani).

Deferred Tax Assets (DTA)

• Question: Why was there no DTA reversal despite two profitable quarters? (Nehal Jain)
• Answer: The company evaluates DTA only on an annual basis to avoid “muddling” quarterly operational metrics with tax accruals (Clifford Lobo).

Key Takeaway

WeWork India delivered a landmark Q3 FY26, characterized by record revenues of ₹640.3 crores and a 512% YoY surge in PAT to ₹52 crores. The company has successfully transitioned to a “dual-engine” model where its Managed Office segment (21% of revenue) provides contracted stability while its flex workspace continues to capture high-velocity enterprise demand. With 40% of future capacity already pre-signed and a 32.6% ROCE, the firm is funding its expansion primarily through internal accruals and high-efficiency debt. Strategic focus has shifted toward GCCs, which now represent 40% of the member base. Despite the inherent margin pressure from front-loading new leases, management maintains a steady 20-21% EBITDA margin outlook. The company is positioned as a core infrastructure provider for India’s corporate sector, with clear visibility to scale to 10.3 million square feet by the end of FY27.