Nov 10 (Reuters) – Flexible workspace provider WeWork India Management (WEWO.NS), opens new tab reported a sharp drop in quarterly profit on Monday despite record revenue, as its year-ago earnings were boosted by deferred tax benefits.
In its first quarterly results since its stock market debut last month, consolidated revenue from operations climbed 22.4% to 5.75 billion rupees ($65.42 million) as large enterprise clients employing more than 1,000 people boosted occupancy rates.
Investors are backing demand for integrated office spaces as global firms expand in India to leverage its cost-effective, English-speaking and tech-savvy workforce. The trend has placed the country among Asia-Pacific’s top office markets, alongside Japan and Singapore, according to real estate services provider CBRE.
The company, which licenses its brand from its now-bankrupt U.S. namesake WeWork Global, reported a sharp drop in profit to 62.91 million rupees. A year ago, a 2.35-billion-rupee tax credit boosted earnings.
WeWork India, which is majority-owned by Bengaluru-based developer Embassy Group (EMBA.NS), opens new tab, provides workspace solutions ranging from private offices to flexible co-working spaces.
Its membership plans include options like day passes and all-access subscriptions, with pricing going up to 15,000 rupees per month.
Listed peer Smartworks Coworking Spaces (SMAW.NS), opens new tab posted a narrower second-quarter loss. IndiQube Spaces (IDIQ.NS), opens new tab will report later on Monday and Awfis Space Solutions (AWFI.NS), opens new tab reports on Tuesday.
As of September, WeWork India operated 70 centers with 114,500 desks across eight tier-1 Indian cities, while Smartworks had 59 centers with a combined seating capacity of 294,000 across 14 cities.
The company’s stock has fallen 0.6% since its debut and closed 1.2% lower at 623.70 rupees on Monday.
($1 = 87.8950 Indian rupees)
eporting by Urvi Dugar in Bengaluru; Editing by Harikrishnan Nair