Smartworks Coworking Spaces Ltd. has reported a remarkable surge in its second-quarter (Q2 FY27) financial performance, significantly exceeding expectations. The robust growth has prompted leading domestic brokerage firms to maintain their 'buy' ratings and increase their target prices for the company's shares. Analysts point to strong capacity additions, rising occupancy rates, and sustained enterprise demand as primary catalysts for this positive outlook.
Strong Q2 FY27 Performance
For the quarter ending September 2026, Smartworks announced a net profit of Rs 43.4 crore, marking an impressive 136% increase year-on-year (YoY). Revenue also saw substantial growth, rising 39% YoY to Rs 591 crore. The company's EBITDA climbed 68% YoY to Rs 117 crore, with margins improving to 19.8% for the reported quarter.
Further financial highlights include:
- Normalised operating cash flow increased 74% YoY to Rs 107 crore.
- Normalised Return on Capital Employed (RoCE) soared to 21.6%, up from 13.6% a year ago.
- Contracted rental revenue stood at Rs 5,800 crore, providing strong visibility for future earnings.
- Gulf Cooperation Council (GCC) clients contributed 22% of the rental revenue.
Management Optimism Fuels Guidance Hike
Neetish Sarda, Founder & Managing Director of Smartworks, expressed confidence in the company's trajectory.
"We have delivered a strong performance in the first half and are tracking well ahead of the plan we set for FY27. We invested through our heaviest expansion phase - and on the back of this, we have raised our full-year revenue growth guidance,"Sarda stated, emphasizing that at scale, growth and profitability compound together. He also highlighted sustained demand from existing clients expanding across cities, as well as new global businesses, Indian conglomerates, and GCCs opting for Smartworks' platform.
Brokerages Raise Price Targets
Following the strong quarterly report, several brokerage firms have upgraded their outlook and price targets for Smartworks:
- Nirmal Bang Institutional Equities reiterated its 'buy' rating and raised its target price to Rs 665 (from Rs 630). The firm values Smartworks at 11 times September 2028E EV/Adj. EBITDA, applying a 20% discount to WeWork's assigned multiple. They cited strong pre-leasing, robust contracted rental coverage, and improving operating leverage as key factors.
- JM Financial maintained its 'buy' rating with a target price of Rs 630. The firm rolled forward its valuation base to 12 times September 2028E EV/EBITDA, noting Smartworks' addition of 0.5 million square feet (msf) in Q2 FY27 and its plan to add 1.7 msf in H2 FY27.
- Systematix Institutional Equities also maintained its 'buy' rating, setting a target price of Rs 653. They underscored healthy revenue growth, operating leverage, and profitability improvements driven by capacity additions and continuous demand from large enterprise clients, particularly GCCs.
Stock Performance Overview
Smartworks Coworking Spaces shares made their market debut in July 2025 at an issue price of Rs 407. The stock has since gained nearly 20% from its IPO price, trading around Rs 488.65 as of Wednesday, November 4, 2026. While it hit a 52-week high of Rs 618.30 in November 2025, the stock experienced a significant correction, crashing nearly 40% to an all-time low of Rs 361.45 on March 30, 2026. However, it has since rebounded by 13% from that low. The company currently commands a market capitalization of Rs 5,500 crore, remaining virtually debt-free with an improving annualised RoCE despite elevated capital expenditure.