Buy Indiqube Spaces; target of Rs 271: ICICI Securities

Moneycontrol • 4 days ago

Original source

Key Investment Pillars

  • Indiqube Spaces delivered a strong Q2FY27 result, with mature centre occupancy rising 100bps QoQ to 91%, driving 12% QoQ revenue growth and 39% QoQ IGAAP EBITDA growth.
  • The company expects growth momentum to sustain, with 1–1.5msf of new area becoming operational, driven by GCCs.
  • We build in a 26% revenue CAGR and 32% IGAAP EBITDA CAGR over FY26–28E, with IGAAP EBITDA margins expanding 195bps to 19.2% in FY28E.
  • Key drivers include same-store pricing growth of ~5% for operational seats, new seats contributing to revenue, and VAS revenue at 15% of pure seat revenue.

Thesis Validation Checklist

  • Investors should watch for sustained growth momentum, with 1–1.5msf of new area becoming operational.
  • Monitor same-store pricing growth, new seat additions, and VAS revenue contribution.
  • Keep an eye on IGAAP EBITDA margin expansion, driven by higher VAS margins and lower rental expenses on upcoming assets.
  • Be cautious of office leasing slowdown and pricing pressures, which could impact growth.