ICICI Securities initiates coverage on Awfis Space Solutions, sees 11% upside potential
ICICI Securities initiated coverage on Awfis Space Solutions (Awfis) with a target price of Rs 757 seeing it ride on a strong recovery in Indian office leasing over the last 12 months.
Awfis has a unique business model. While the company does not act as a land aggregator or landlord of office space, it focuses on providing services to its clients on the demand side and also partners with space owners/landlords on the supply side.
The domestic brokerage firm stated that Awfis is the first co-working/flexible workspace company in India and hence there is limited scope for comparison with industry peers. Awfis is more comparable to listed hotel peers.
Considering the above, analysts at ICICI Securities believe that given Awfis’ superior RoCE profile which is likely to consistently range over 20% FY26E onwards and net cash balance sheet combined with an estimated 48% EBITDA CAGR over FY24-27E, an EV/EBITDA of multiple of 25x is justified in line with hotel peers.
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Over time, the company evolved from a co-working space to an integrated workspace solutions platform and adopted two differentiated models for sourcing and procuring workspaces, the straight lease (SL) model and the managed aggregation (MA) model.
One of the company’s key strategies for space procurement over time was to transition to an asset-light, low-risk MA model from the SL model.
“Awfis’ strategy for expansion through the asset-light MA route along with a
