Flexing into growth
We initiate coverage on WeWork India Management Ltd. (WeWork) with a BUY rating and a target price of INR 914, based on 18x Sep’27E EV/IGAAP EBITDA (post all lease rental payments). Backed by the Embassy Group (Embassy), WeWork is a leading premium flexible workspace operator and is the exclusive licensee of the WeWork Brand in India. As of 30 Sep’25, WeWork has 114,500 operational desks across India, spanning 7.7msf of operational leasable area, along with a total desk capacity (including LoIs) of 144,800 seats across 10msf of leasable area with 94% of its desks in Grade A properties. We estimate 22% revenue and 26% EBITDA CAGR over FY25–28E led by 21% new seat addition CAGR and operating leverage. Key risks: Slowdown in office leasing and demand for flexible workspaces.
22% revenue and 26% EBITDA CAGR over FY25–28E
We build in same-store revenue/seat growth of ~4% for operational seats over FY25–28E, in line with our view on the flex spaces industry. The balance revenue contribution will likely stem from new seats, which should grow at a 21% CAGR, and stable VAS and digital services revenue over the medium term, which was ~16% of pure seat revenue in FY25. We estimate operational area to rise to 10.9msf in FY28E, from 7.4msf in FY25, with portfolio occupancy hovering ~76–77% levels. We estimate a 26% IGAAP EBITDA CAGR (post all lease rental payments and brokerage) over the same period with IGAAP EBITDA margins expanding 213bps to 21.5% in FY28E vs. 19.4% in FY25 on account of the percentage of corporate overheads reducing as a percentage of operating revenue. Any pricing and rental cost efficiencies that the company may achieve post FY25, represent an upside risk to our margin estimates.
Valuation: Initiate with BUY; TP INR 914
We initiate coverage with a BUY rating on WeWork India Management and a target price of INR 914. We value the company at a Sep’27E EV of INR 122.4bn, derived from an 18x Sep’27E EV/EBITDA of INR 6.8bn – in line with our target multiple for its listed peers, such as Awfis Space Solutions and Indiqube Spaces Ltd. Adding net cash of INR 0.1bn, as of Sep’27E, we derive an equity value of INR 122.5bn or INR 914/share.
Play on India’s strong office leasing and flex-space demand
The recovery in Indian office leasing seen in CY23 has led to a boom for office demand in CY24 with pan-India net absorption of 49msf vs. incremental supply of 43msf, leading to overall Grade-A vacancy levels declining by 190bps YoY to 16.1%, as of Dec’24. With continued momentum in office demand, led by GCCs, we estimate pan- India Grade-A net absorption of 54msf in CY25, 56msf in CY26 and 58msf in CY27. We expect more than 50% of this demand to be driven by GCCs and envisage cumulative net absorption of 167msf over CY24–27E. At the same time, India has witnessed growth in demand for flexible workspaces with 18–22mn sq.ft. of stock that was added in CY24.
As per CBRE, the total flexible workspace stock, which ranged 82–86mn sq.ft. at end- CY24, is forecast to grow to ~140–144mn sq.ft. across tier-1 cities by end-CY27 at a CAGR of 18–20%. These forecasts are in line with the flexible workspace operators’ annual net stock addition trends over the past few years; it also projects future stock addition from operators, which is in line with the expected demand from end users and foreseeable office supply that could be available to flexible workspace operators.
Strong parentage of Embassy Group and WeWork Global
WeWork is owned and promoted by Embassy, a leading real estate developer in India with a portfolio of >85mn sq.ft. of commercial real estate. Embassy is also the sponsor of Embassy REIT, India’s first REIT and Asia’s largest office REIT by leasable area.
WeWork is one of the few flexible workspace operators in India backed by a major real estate developer, and its relationship with Embassy has provided it with an inherent understanding of the corporate real estate industry in India and helped the company establish multi-asset relationships with various prominent developers across major tier-1 cities. WeWork’s relationship with Embassy also provides it with access to Embassy’s portfolio of large tenants that seek additional, flexible workspaces.
WeWork also benefits from its relationship with WeWork Global, a global flexible workspaces operator with ~600 wholly-owned and licensed locations in 35 countries, and it is the exclusive licensee of the WeWork brand in India
