Startup Deep Dive : Smartworks — how India’s largest managed-office operator turned its first annual profit

For eight years Smartworks did what most flexible-office companies do best: it grew fast and lost money. It crossed ₹1,000 crore in revenue while still bleeding, and in the very financial year it filed to go public its net loss actually widened. Then, in the year ended March 2026, the arithmetic finally flipped. The company reported operating revenue of ₹1,795.81 crore (about $187 million, at $1 ≈ ₹96.0) and a net profit of ₹10.53 crore — its first full year in the black, according to consolidated figures on Screener and a corporate filing summary carried by Whalesbook.

That single line — a profit smaller than the marketing budget of many of its own tenants — is the whole story of India’s largest managed-office operator. Smartworks does not sell desks so much as it sells an arbitrage: it signs long leases on entire buildings, spends heavily to fit them out, and then re-lets fully serviced campuses to large companies. The model throws off cash but buries it under depreciation and lease interest. Getting from “revenue crosses ₹1,000 crore” to “we made ₹10 crore” is what this deep dive is about.

Quick facts

What Smartworks actually does

Smartworks is a flexible-workspace operator that has deliberately walked away from the “coworking” label. It leases large, bare-shell properties in prime office micro-markets, invests in fitting them out into fully serviced campuses, and then leases that finished space to companies — with a bias toward medium and large enterprises that need 300 seats or more. As per the company’s positioning at its IPO, it describes itself as India’s largest managed campus operator by lease-signed portfolio. The campuses come wired with cafeterias, gyms, creches, medical rooms and convenience stores, plus proprietary software that tracks how each square foot is used. In plain terms, Smartworks is a landlord’s tenant that turns itself into a landlord for a fussier, larger class of client.

The origin

Neetish Sarda started Smartworks in 2016 in Delhi-NCR after seeing, up close, how modern workplaces abroad were built and run. The founding insight was simple and correct: Indian enterprises wanted the productivity and amenities of a global campus, but did not want to sink capital into designing, building and running one themselves. In 2017 Harsh Binani joined as co-founder, bringing a background in consulting at McKinsey and operating experience at Medanta, according to the company’s leadership disclosures and reporting by Forbes India. The pair’s early bet was that the office, far from dying, would be re-bundled — that companies would happily pay a premium to outsource the entire physical workplace to someone who did nothing else. The first years were slow: by fiscal 2020, operating revenue was only about ₹257.6 crore, as reported by Forbes India. This was a real-estate business dressed as a startup, and real estate compounds slowly before it compounds fast.

The struggle years

Two moments nearly defined Smartworks, and both are worth stating without varnish. The first was a strategic near-miss corrected in time; the second was an existential threat it barely walked through.

In 2019 the founders made the uncomfortable decision to move away from the coworking playbook — small teams, hot desks, monthly churn — toward managed offices sold to enterprises on longer commitments. It was a bet against the fashionable model of the day. Then the pandemic arrived. Work-from-home gutted demand for office space, and Smartworks’ revenue effectively stalled at about ₹279.6 crore in FY21, per Forbes India, which quoted Sarda in April 2021 asking himself whether the industry would even survive. Rather than dump inventory into a falling market, the company chose to hold its supply and closed only two centres. That refusal to liquidate — expensive in the moment — meant it still had the campuses when demand snapped back. Note that the profit-and-loss picture of these years is genuinely contested: Forbes India reported a FY23 net loss of ₹204.2 crore, while the restated consolidated accounts in the DRHP (reported by Inc42 and mirrored on Screener) show a FY23 net loss of about ₹101 crore. The lower, restated figure is the audited number carried into the IPO; the gap is a reminder to read which set of books a headline is quoting.

The turning point

The turning point was not the IPO — it was the 2019 pivot to enterprise-managed campuses, which only revealed its value on the other side of COVID-19. In 2021 Smartworks introduced a “campus-managed” model, taking over whole independent buildings rather than individual floors, which lowered its capex per unit and let it standardise food, gyms and transport across a site. The numbers on either side of that decision are stark. Operating revenue roughly doubled from about ₹360.2 crore in FY22 to about ₹710.3 crore in FY23, its operational area expanded from 4.9 to 7.2 million square feet, its footprint grew from 10 to 12 cities, and enterprises came to account for roughly 90% of revenue — all as reported by Forbes India. Sarda called it a “hockey-stick recovery.” The company that had wondered in 2021 whether offices had a future spent the next three years running out of space to sign.

The money behind it

Smartworks was never a heavily venture-funded company by Indian startup standards; its capital story is a mix of a strategic real-estate backer, a pre-IPO top-up, and then the public markets.

• Keppel Land (2019): the Singapore-based property major put in $25 million, its anchor institutional round, per Inc42 and Forbes India — the capital that funded the shift to managed offices.
• Pre-IPO round (2025): Smartworks raised about $20.24 million (roughly ₹168 crore) from investors including Keppel, Ananta Capital Ventures Fund I, Plutus Capital and family trusts, as reported by Inc42 and Pune.News. An earlier tranche of about $12 million in this round was led by Ananta Capital with participation from around 45 investors.
• Total private capital: roughly $70 million across about 7 rounds, per Tracxn data cited in reporting — modest for a company of its revenue scale, which is itself a feature of the asset-light lease model.
• IPO (July 2025): a ₹582.56 crore issue, comprising a fresh issue of about ₹445 crore and an offer for sale of about ₹137.56 crore, per Business Standard and HDFC Sky. Of the fresh proceeds, ₹226 crore was earmarked for fit-out capex and security deposits on new centres and ₹114 crore for repaying loans.

How it makes money

The engine is a lease-in, lease-out spread, dressed up with services. Here is the mechanism, and the part that is easy to misread.

• Money in — rental income: the overwhelming majority of revenue is rent charged to enterprise clients. Lease rentals were ₹997.1 crore of FY24 operating revenue (about 96%) and ₹1,289.3 crore in FY25, per the DRHP as reported by Inc42.
• Money in — ancillary and services: smaller, higher-touch lines. In FY25 these included ancillary services of ₹48.8 crore, design and fit-out services of ₹34.7 crore, and software fees of ₹1.2 crore, per the DRHP (Inc42).
• Costs out — the big three: rent it owes landlords, finance costs on lease liabilities, and depreciation of its fit-outs. FY24 finance costs alone were ₹328.3 crore, up 39% from ₹236.7 crore in FY23, per the DRHP (Inc42).
• Where the margin sits: at the operating level the business is strongly cash-generative — the company reported Q1 FY26 IND-AS EBITDA of ₹241 crore on ₹379.2 crore of revenue, a 63.6% margin, per BW Disrupt. The part people get wrong is confusing that with profit: after depreciation of fit-outs (₹635.9 crore in FY25, about 43% of total expenses, per Inc42) and lease interest, the net line stayed negative until FY26.

The numbers

Four years of consolidated figures show a top line compounding hard and a bottom line grinding its way to zero and just past it. Loss figures are the restated consolidated numbers in the DRHP (Inc42) and on Screener; the two sources agree.

• Revenue grew roughly 46% in FY24, 32% in FY25 and about 31% in FY26 — a rare stretch of durable ~30%+ growth off a large base (DRHP via Inc42; Screener/Whalesbook for FY26).
• The FY25 loss widened about 27% year-on-year even as revenue rose, because expansion spending outran the top line (Inc42).
• FY26 marked the swing: normalised EBITDA rose about 75% to ₹314 crore with a 17.5% margin, and reported EBITDA (PBILDT) was ₹1,155.12 crore, per the FY26 filing summary (Whalesbook / TipRanks). Overall gearing improved from 39.89x in FY25 to 9.28x in FY26 (CARE Ratings, via Whalesbook).

Where the money comes from

The revenue mix is concentrated in two ways at once — by line item and by geography — and both matter for how safe the growth is.

• By line item: rent dominates. Lease rentals were about 96% of operating revenue in FY24, with ancillary services, fit-out and software making up the thin remainder (DRHP via Inc42). This is a rent business with a services garnish, not the reverse.
• By geography: as per the DRHP, about 75.19% of rental revenue came from just four cities — a concentration risk the company itself flags (Inc42 / liquide.life).
• Scale of the portfolio: total super built-up area was 8.99 million square feet as of FY25 (Business Standard). By Q1 FY26 (June 2025) the company reported about 10.08 million square feet of leased space and roughly 12 million square feet under management, with occupancy above 83% in operational centres (BW Disrupt / Entrepreneur).
• The surprise: despite the “coworking” name, the customer base is enterprise-heavy — clients requiring 300+ seats — so churn behaves more like corporate real estate than like a hot-desk operator, and Smartworks has begun extending into Singapore (Whalesbook).

The risks

These are concrete, disclosed, and structural to the model rather than incidental.

• The lease-liability mismatch: Smartworks commits to long, fixed rent obligations to landlords, but earns from clients on shorter contracts. As of 31 December 2023 it carried ₹3,215 crore of lease commitments, and finance costs — largely interest on lease liabilities — were ₹328.3 crore in FY24, per the DRHP (Inc42). If occupancy dips, those fixed costs do not.
• Geographic and client concentration: about 75.19% of rental revenue from four cities, plus heavy dependence on large clients needing 300+ seats, means a slowdown in a single market or the loss of a few anchor tenants would bite hard (DRHP via Inc42 / liquide.life).
• A thin, new profit: the FY26 net profit of ₹10.53 crore sits on top of ₹1,796 crore of revenue — a margin of well under 1%. The company reported a negative net worth as of December 2023 due to accumulated losses, and the profit turn is one year old (DRHP via Inc42; Screener). Any reversal in leasing demand or a rise in renewal costs could push the bottom line back below zero.

The takeaway

The transferable lesson from Smartworks is about the difference between a cash machine and a profit machine, and the patience it takes to convert one into the other. For years the business generated strong operating cash flow that was entirely consumed by the depreciation and interest of its own expansion — the accounting cost of building the very asset base that now earns. Founders in capital-heavy businesses often mistake persistent net losses for failure and either over-raise or retreat. Smartworks did neither: it held its supply through the worst demand shock its industry had ever seen, kept signing leases while the number at the bottom of the page stayed red, and let scale plus falling relative capex do the arithmetic. The ₹10.53 crore profit is almost beside the point; what it proves is that the model can cross over. Whether it stays across, with 75% of rent from four cities and long lease obligations that never sleep, is the next chapter.

Frequently asked questions

Is Smartworks a listed company?

Yes. Smartworks Coworking Spaces Limited listed on 17 July 2025 on the BSE (code 544447) and NSE (symbol SMARTWORKS), following a ₹582.56 crore IPO. As of 25 September 2026 its market capitalisation was about ₹6,072 crore, per Screener.

Who founded Smartworks?

Neetish Sarda started the company in 2016 (the entity was incorporated in 2015), and Harsh Binani joined as co-founder in 2017. Sarda serves as Managing Director; Binani came from a background at McKinsey and Medanta, per the company’s leadership disclosures and Forbes India.

How does Smartworks make money?

It leases large bare-shell buildings, fits them out, and re-lets fully serviced campuses to enterprises. Rent from clients is the bulk of revenue — about 96% of operating revenue in FY24 — with smaller income from ancillary services, design and fit-out work, and workspace software, per the DRHP as reported by Inc42.

Is Smartworks profitable?

It became profitable at the annual level for the first time in FY26 (year ended March 2026), reporting a net profit of ₹10.53 crore on operating revenue of ₹1,795.81 crore, versus a ₹63.2 crore loss in FY25, per Screener and a filing summary on Whalesbook. Losses in prior years were driven largely by depreciation of fit-outs and interest on lease liabilities.

How big is Smartworks’ portfolio?

Its total super built-up area was 8.99 million square feet as of FY25 (Business Standard). By Q1 FY26 (June 2025) it reported about 10.08 million square feet of leased space and roughly 12 million square feet under management, with occupancy above 83% in operational centres, per BW Disrupt and Entrepreneur.

Sources

Figures are as of September 2026. Currency converted at $1 ≈ ₹96.0 as of 18 September 2026 (Trading Economics).

• Inc42 — “IPO-Bound Smartworks’ FY25 Loss Widens 27% To INR 63.2 Cr” (July 2025)
• Inc42 — “Smartworks DRHP: FY24 Loss Declines 51% To INR 50 Cr, Revenue Crosses INR 1,000 Cr Mark” (2024)
• Inc42 — “Smartworks Raises $12 Mn From Ananta Capital, Others” (2025); “Smartworks Ends First Trading Session 15% Above IPO Price” (July 2025)
• Screener.in — Smartworks Coworking Spaces Ltd, consolidated financials and market data (accessed September 2026)
• Whalesbook — Smartworks FY26 results and CARE Ratings summary (May 2026)
• TipRanks — “Smartworks posts record FY26 with first full-year profit” (2026)
• BW Disrupt — “Smartworks Q1 FY26 Operating Revenue Zooms To Rs 379.2 Cr, Net Loss Shrinks” (2025)
• Entrepreneur India — “Smartworks Announces Strong Q1 FY26 with Record Portfolio Expansion” (2025)
• Business Standard — Smartworks IPO subscription, structure and super built-up area coverage (July 2025)
• HDFC Sky — “Smartworks IPO Opens at ₹387–₹407; ₹582 Cr Offer” (July 2025)
• Forbes India — “Enterprising Comeback: Smartworks and its office play” (founding, pivot and COVID narrative)
• Pune.News — “Smartworks Secures $20 Million from Ananta Capital, Keppel, and Others” (2025)
• liquide.life — “Smartworks Coworking Spaces Ltd IPO Review – GMP, Strengths & Risk Factors” (2025)
• Trading Economics — USD/INR reference rate (18 September 2026)

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