Awfis Space Solutions (NSE:AWFIS) Q2 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to Q2 and H1 FY 'twenty seven Earnings Conference Call of Awfis Space Solutions Limited. This conference call may contain forward looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, Please note this conference is being recorded.

0:50 I now hand the conference over to Mr. Rahul Kundanani from Nirmal Bank Institutional Equities. Thank you, and over to you, sir. Thank you, Nazzini. Good morning, everyone. On behalf of Institutional Equities, I would like to welcome you out to q two FY twenty seven earnings call of Office Space Solutions Limited. The management is represented by Mr. Amit Ramani, Chairman and M. D. Mr. Sumit Lakhani, CEO Mr. Sumit Boshlani, the CFO. I will now hand over to the management for their opening remarks, after which we will open the floor for Q and A. Over to you, sir. Thank you, Rahul. Thank you, and good morning, everyone. A very warm welcome to all of you on our Q2 H1 FY 'twenty seven earnings call. I'm joined by Mr. Sumit Lakhani, our CEO Mr.

1:37 Sumit Rojhani, our CFO and SGA, our Investor Relations Advisor. Our results presentation is on the exchanges and on our website, and I hope you've had a chance to go through it. Let me give you a little color on the industry landscape. India's grade A office stock across the top seven cities now stands at eight eighty seven million square feet, and demand is keeping pace with the scale. Gross leasing in the first nine months of twenty twenty six reached 54,400,000 square feet, up 7% year on year with 18,700,000 square feet absorbed in September quarter itself. What is striking is that this came in a quarter where new supply jumped 79% sequentially to 19,200,000 square feet, and vacancy still fell by 42 basis points to 15.9%.

2:28 When record supply and falling vacancy arrive together, it means occupiers are absorbing quality space as fast as it is delivered. Average quoted rents rose 6.9% year on year to about 115 per square foot per month. Improving the demand for grade A plus office space is supporting rental growth in key micro markets. This reinforces the advantage of operators with established developer partnerships and a well positioned supply pipeline while making disciplined sourcing increasing importance for our new capacity. Flex is now a mainstream route to that space. Flexible workspace operators leased 12,600,000 square feet in nine months, close to onefour of all leasing in the market. And on the conventional side, technology occupiers took 38% of the space and BFSI took 20%.

3:21 Both of these sectors are core to our client base, so the mix of who's leasing is moving towards us and not away from us. PLEX is no longer a start up enabler. It is a core real estate strategy for large enterprises and the operators who can offer a grade A plus address, enterprise grade fit out and a national network are the ones taking that share. GCCs are the anchor of this demand. India now hosts 2,100 plus GCCs, operating 3,700 plus units and employing 2,360,000 people and generating about $98,000,000,000 in revenue. And in August, we published the Great Workplace Reset with Xenob on how these centers are redefining work, workforce and the workspace.

4:07 GCC leased about 8,700,000 square feet in the September quarter, 41% of the market and about 28,000,000 square feet in nine months, which is 42% of the total overall space taken. Three things in GCC data matter for us. First, concentration. Hyderabad took 37% of GCC leasing in the quarter and Bangalore, 28%, with Chennai and NCR at 11% each. And these are cities where our network is deepest. Second, quality, 58% of leasing in the nine months was grade A plus asset, which is exactly where our gold and elite portfolio sit. Third, intent. Our report with Zanor finds that GCCs now take 40% to 45% of enterprise flex uptake, up from 37% to 39% in 2022.

4:57 And twothree of GCCs plan to hold more than oneten of their portfolio in flex. The work these centers do has changed more than their numbers. As the GC moves from cost center to product and AI hub, the workspace becomes an operating decision taken for speed, talent, scalability rather than a real estate decision taken on rent per square feet. The message from the market is simple. Enterprise and GCCs want high quality, flexible, ready to use space in the best micro markets of Hyderabad, Bangalore, Chennai and NCR. And they want one partner who can deliver it at speed across these cities. That is the platform we have built, and the rest of the call is about how it performed in the quarter. Turning to our performance. We are pleased to report another quarter of consistent growth driven by continued demand from large enterprises and GCCs, along with focus on premium centers and operational efficiency.

5:54 Normalized revenue for Q2 FY 'twenty seven grew by 26% year on year to INR $4.51 crores, and cash EBITDA grew 45% to INR 49 crores. The cash EBITDA margin stood at 10.8%, an improvement of 140 basis points year on year and 70 basis points over the previous quarter. For the first half of the year, normalized revenue was at INR $8.88 crores, up 30% year on year and cash EBITDA was INR 93 crores, up 40% at a margin of 10.5%. Cash EBITDA reflects the operating profitability of our workspace model. The reported EBITDA primarily includes accounting effects under India's 116, which are detailed in the presentation.

6:39 On a reported basis, revenue was INR $4.39 crores for the quarter and INR $8.64 crores for the first half, up 2023%, respectively. Reported EBITDA was INR 174 crores and INR $3.36 crores, up 31%, 30% with margins of thirty nine point six percent and thirty eight point nine percent. Profit before STACK doubled to INR 31 crores for the quarter and INR 56 crores for the first half of the year. The growth continues to be self funded. Normalized operating cash flow for the first half was INR 100 crores or 1.08x cash EBITDA, and we remain net cash positive with net debt to equity at minus 0.12x compared with minus 0.08x at the end of June. Our co working business grew at 31% year on year to INR $3.76 crores in the second quarter and 34% to INR $7.40 crores in the first half, driven by sustained demand from large corporates, MNCs and multicenter clients.

7:41 Together with the continued premiumization of our portfolio with this continued premiumization of our portfolio. I'll come back to the drivers under our growth engines. Transform, our design and build business, contributed INR 75 crores in the second quarter and INR 149 crores in the first half, growing by 816% year on year, respectively. Quarterly Transform revenue moves with project delivery milestones, so we assess the business on a half yearly and an order book basis. Third party clients now account for 93% of all Transform revenue and the order book and advance pipeline stands at $2.20 crores, which gives us a good visibility for the second half of the year. Mandates won during the first half include a global technology center in Gurgaon, a renewable energy group in Delhi, a diversified pharmaceutical group in Noida and a global customer experience major in Gurgaon, each between 40,000 to 100,000 square feet.

8:39 On the network, we added six centers and approximately 7,000 gross seats during the quarter, taking the total supply, which is our operational plus under fit out to two fifty four centers and approximately 174,000 seats. The and occupancy rose on both measures to 84.1% at mature centers and 76.2 across the portfolio. Sumit will take you through the further details. Our GCC portfolio continues to scale, contributing to approximately 24% of our rental revenue. Our integrated offering across co working, managed office, design build and allied services allows us to be a GCC single partner for from its first 25 seats in India to its multicity managed office mandate.

9:26 Our five growth engines, let me give you a brief progress update on each of them, Our five growth engines, which we set out at the start of the year. First, GCC demand. Our GCC client base grew to continues to grow, and the life cycle we described in August is now visible in individual accounts. Our U. S. Headquartered global e commerce major entered India through 100 seats, incubating in our Elite AWFIS in Bangalore, which we opened in thirty five days and hence, since scaled to 2,000 FTEs captive operations with office as its single partner. In Chennai, a Fortune 500 group has signed a GCC mandate of more than 1,000 FTEs with the first place going live in Q4 of FY 'twenty seven. Entry mandates for the size taken by the first time entrants are clear signs that GCC now see Flex as a way into India rather than a stop gap.

10:17 Second, premiumization at the scale. The Gold and Elite portfolio has grown from 26 centers a year ago to 39 today. 29 Gold and Telen Elite centers and premium seats are up 58% year on year over 33,000. During the first half, we strengthened our presence in Pune, Bangalore, Mumbai, Delhi NCR with new grade A plus centers built to our latest 6.0 design, which raises space utilization and supports higher realization per seat. The economics are following the footprint. These centers are signing incremental seats at around 35% higher pricing than our flagship product. And they are front door to larger enterprise mandates. As this cohort matures, it contributes to realization and margins will keep building.

11:06 Third, multi format supply. Our three pillars each do a different job. Managed aggregation remains the core now with stricter filter on asset quality and realization. And increasingly, through developer partnerships, we'll landlord funds the CapEx, and we run the center. Straight lease is reserved for a handful of ultra premium anchor assets in core micro markets where flagship addresses justifies the balance sheet commitment. And partial manager office where an enterprise anchor commits to half or more of the seats before we sign in, It's changing how we open new centers, anchor economics from day one and higher starting occupancy than in the past. Fourth, organic growth. We sold approximately 25,000 seats in the first half of the year, and growing share of that came from expansions within existing client base. Another metric we are focused on this year is lock and tenure, which is up four months year on year to twenty seven months across the portfolio, three months to thirty three months for clients with more than 100 seats.

12:06 Further, our in house AI enabled renewals tool now flags expires and expansions signals well ahead of time, so renewals are managed productively proactively rather than at the end of the contract. Longer lock ins and earlier renewals together give us a longer contracted revenue base going into every quarter. Fifth, value beyond Flex. I covered Transform numbers earlier. So two observation only. The mandates we are winning are larger and more strategic. Four of the five wins in the first half were between 70,000 to 100,000 square feet and increasingly for multi city and national fit outs rather than single sites. And the loop runs in both directions. Flex relationship convert into transform mandates and transform clients come back to us for flex and managed office. Allied services across IT, F and B, transport, business support are growing alongside the enterprise mix and deepening our share of each client's workspace spend.

13:05 Taken together, these five engines are not separate initiatives, but one operating model, premium supply attracts enterprise and GCC demand that demand deepens to managed office and the workplace solutions, and every such relationship makes the next partnership and the next center easier to sign. I'll talk briefly about financial discipline. All of this growth continues to be funded with discipline. Since our listing in Q1 FY 'twenty five, we have added close to 64,000 net operational seats from INR 100,000 to INR 164,000 while deploying over INR $4.60 crores of CapEx in new centers. Every rupee of that has come from internal approvals. The INR 128 crores we raised at IPO remains the only equity we have taken since listing. Over the same period, quarterly revenue has grown from INR $2.58 crores to INR $4.58 crores on a normalized basis, a CAGR of 28.1%, and we have stayed net cash throughout.

14:04 Outlook for FY 'twenty seven. Looking to the second half, we reiterate the full year guidance we gave in August. We are on track to do add about 22,000 to 25,000 gross seats in FY 'twenty seven, and we expect the co working revenue to grow 23% to 25% and transform by around 20%, taking total revenue past INR 1,800 crores. On profitability, we expect full year cash EBITDA of INR 190 crores to INR 200 crores, with the second half stronger than the first as occupancy at recently launched centers continues to build and the premium cohort matures. With that, I will now hand over to Sumit Lahani to take you through the operational highlights. Over to you, Sumit. Thank you, Amit, and good morning, everyone. Let me walk you through the operational highlights for Q2 and H1 FY 'twenty seven.

14:55 As of 09/30/2026, AWFIS updated two forty four centers across 18 cities with another 10 centers under fit out, taking total supply to two fifty four centers, including signed LOIs, signed supply stands at two seventy centers. On seats, operational capacity rose to over 164,000 from approximately 159,000 at the end of June. Including centers and the fit out, total supply stands at approximately 174,000 seats across 8,700,000 square feet and including signed LOIS, signed supply is approximately 188,000 seats across 9,400,000 square feet. During the quarter, we added approximately 7,000 gross seats and launched six new centers while exiting around 2,200 seats across four centers as part of ongoing portfolio optimization.

15:54 For the first half, there is approximately 12,000 gross seats and 13 new centers, every one of them in a grade A or A plus asset in a high demand micro market. Our gold and elite footprint grew to 39 centers from 37 at the end of June with 10 elite and 29 gold centers. Managed aggregation remains a strong component of the network at 57% of the centers. Occupancy at centers operational for more than twelve months rose to 84.1% from 83% in the first quarter and blended portfolio occupancy improved to 76.2% from 76% that both measures moved up in a quarter of net seat addition tells you our new centers are filling fast.

16:45 Our active client base grew to over 3,700 clients. Across the portfolio, weighted average client tenure is thirty eight months and lock in tenure twenty seven months, up from twenty seven months at the end of June. For clients with more than 100 seats, tenure is forty nine months and lock in thirty three months. The latter up three months year on year. 77% of our seats have tenure of twenty four months or more and further 18% between twelve and twenty three months. So 95% of the base is committed for at least a year. Longer lock ins are a deliberate priority because they translate directly into contracted revenue and steadier occupancy through cycles. Enterprises and MNCs make up 64% of our client base, SMEs, 25%, and startups, 10%.

17:37 By industry, technology accounts for 39% of our client mix, professional services 20, manufacturing 13%, BFSI 12%, and health care and life sciences 7%, with the balance across other sectors. Those sector other than technology accounts for more than a fifth of the pace, and resilient sectors make up over 40% of it. By domicile, 51% of our clients are India headquartered, which drives faster conversions and shorter ramp cycles. While 44% are headquartered in North America or Europe, 3040% respectively, bringing structured mandates and longer tenure. By size, clients with 500 or more seats account for 37 of our seats and clients with up to 100 seats a further 35%, which gives us a steady funnel of clients who grow into managed office bandits.

18:33 On GCCs, we serve more than 105 unique GCC clients across nine cities, contributing approximately 24 of rental revenue. Beyond the mandated... What... Beyond the mandates, which Amit described, we invested in the GCC ecosystem through the first half. We sponsored the GCC conference in Bangalore, hosted a GCC leaders, mentoring in Pune, co authored the industry report with, launched a GCC podcast series with industry practitioners. These are how first time entrants find us, and they feed the pipeline of nano and micro mandates that later scale. Overall, the network is growing where enterprise demand is depressed, occupancy is rising on both measures, and the client base is becoming longer tenured and more committed.

19:21 With that, I'll hand over to Sumit Roshlani for the financial update. Thank you, Sumit, and good morning, everyone. Let me take you through the financial performance for Q2 and H1 FY 'twenty seven. As introduced last quarter, alongside our reported end AS financials, we now report cash EBITDA to give investors a clearer view of underlying operating performance. The metrics and its reconciliation are on Slide 20 to 22 of the presentation and consistent with last quarter have been validated by MSK and associates LLP under an agreed upon procedure engagement. For Q2, reported revenue from operations under NDIS was $4.39 crores, up 20% year on year. Coworking and Allied Services grew 22% to INR $3.64 crores, and Transform revenue grew 8% to INR 75 crores.

20:27 Reported EBITDA was INR 174 crores, up 31 percent year on year, and profit before tax was 31 crores, up 91% year on year. Under Ind AS 116, certain long term lease arrangements are accounted for as finance leases, which affect the timing of the revenue recognition. Adjusting for this, normalized revenue was $4.51 crores, up 26% year on year. After adjusting for finance lease accounting, deducting actual cash lease rentals paid during the quarter and excluding certain noncash cost items, cash EBITDA was 49 crores, up 45% year on year with cash EBITDA margins of 10.8%.

21:16 The operating PBT was INR 13 crore. For first half of the year, reported revenue from operations under India was $8.64 crores, up 23% year on year. Co working and allied services grew 25% to INR $7.15 crores. Transform grew 16% to INR 149 crores. Reported EBITDA was INR $3.36 crores, up 30% year on year and profit before tax was INR 56 crores, up 108% year on year. Under India 01/16, as explained earlier, certain long term lease arrangements are accounted for as finance leases, which affect the timing of the revenue recognition.

22:05 Adjusting for this, normalized revenue for first half of the year was $8.88 crores, up 30% year on year. After adjusting for finance lease accounting, deducting actual cash lease rental state during the quarter or during the first half of the year and excluding noncash costs, cash EBITDA was INR 93 crores, up 40% year on year and cash EBITDA margin of 10.5%. The operating PBT for first half of the year was INR 25 crores. Talking about balance sheet and returns. Our balance sheet remains strong. We continue to be net cash positive with net debt to equity of negative 0.12x and with a net debt negative of INR 73 crores.

22:56 Our fixed asset turnover ratio was at 1.5x. For first half of the year, the total spend on CapEx was INR 113 crores. Our incremental cost of borrowing stays at 8.5%, and our credit rating stays at A plus with a stable outlook. Overall, the quarter reflects healthy top line growth, a stable balance sheet and margin growth. We expect to build through the second half. With that, we conclude our opening remarks and open the floor for questions. Anyone who wishes to ask a question may press star and one on their touch tone telephone.

23:48 If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Adi Dev from ICICI Securities. Please go ahead.

24:57 Yeah. Good morning, everyone. Thank you for the opportunity. Also, first question is on the seat additions now. Where do we see us as far as ending the year in terms of the operational seats? And going into next year, what is the expansion plan and what is the pipeline looking like? That is the first question. And second question, sir, now the margins seem to improve. We are almost up to 11%. So as we have more and more premium properties in the mix going ahead, especially on straight lease. So for '28, any guidance you'd like to share directionally on how the margins are going to be trending for AWF? Those are my two questions. Thank you. Hi, Hiret. So for the whole of the year, we are expecting to add about 22,000 to 25,000 gross seats.

25:43 And the total seat closures, we are expecting at around 5,500. So out of which almost 4,000 has already been closed in H1. So what... Where we expect the operational seat portfolio would be around a 174,000 plus at the end of March. With respect to the premium portfolio, as we have mentioned over here, over the last one odd year, almost about 12,180 seats have been added. And across the premium portfolio, what we are seeing is almost about 35% higher pricing versus the overall flagship product.

26:30 So we are a bit more focused around on more premium seat addition rather than the volume seats. In terms of next financial year, while it's a bit earlier to early to give guidance in terms of more... In terms of the seat addition, but at least if the macro stays the same, we expect the gross addition will be at least 20 to 25% higher than what we did around in FY twenty seven. And it will still be more tilted towards the premium portfolio in f y twenty seven... In in f y twenty eight as well around over there.

27:17 With respect to margins, I think we are moving towards 11% plus kind of margins as you could... Or closer to 11% margin in q two. We expect the margins to sequentially rise over h two with our estimates that in q four, it should be at least around 11 and a half percent, and the exit March month cash EBITDA margins should should be touching around 12, what, percent? This will be back on terms of higher or better occupancy as well. Okay. So, sir, just to understand this correctly, for 2028, 12% is the floor for our business in terms of the margins you expect going forward?

28:04 Yes. Yes. So we would expect 12% to be the floor as we begin it into FY twenty eight. Okay. And just one last accounting clarification. So this is for mister. Lease rental payment of equipment, right, which we have separately classified in cash flow. In the Indus accounting, this comes above the Indus EBITDA or it is part of depreciation interest schedules? Just wanted some understanding of that. So in our case, it's more nuanced. The profit share that we pay to our landlords, it is part of the EBITDA or it is within the EBITDA. And the rest of the portfolio, which is other than the profit share is from India's financial perspective, it is considered in the depreciation and interest.

28:58 Okay. So this is also for the lease rentals on the equipment portion. That was the specific question. No. What we have mentioned, the equipment. Yeah. That is also on the... Accounted on the similar lines when it comes to one one six accounting. So the needs and the Yeah. Yeah. It will be part of the depletion and interest schedule. So... Okay. Fine. That's it from my end. I'll come back in the queue if there are more questions. Thank you. Thank you. Next question is from the line of Rahul Kunani from Nirmal Bank. Mister Rahul, you're not audible.

30:11 Sorry. Can you hear me now? Yes. Yeah. Hi. Congratulations on good set of numbers. Sir, I just had a couple of questions. One was on Transform. Its third party revenue share is now at 93%. How do you see this business going ahead? And how much would Transform be as an overall part of the business and in terms of margin as well? And second would be on GCC. How big would you see get for us in a stable state sort of thing? Thanks, Rahul, for the question. So Transform, obviously, has gone through a defining shift and started as largely a capture fit out arm serving our own centers. Today, 93% of its revenue is coming from third party. This is a strong endorsement of our design and build capability. Clients who come to us purely for design and build are choosing Office Transform for its design quality, speed of execution and delivery track record. We are also winning progressively larger mandates with each of the new projects typically bigger in scope and value than the last one. Clients are obviously trusting us with larger and more complex fit outs, and that is clear sign of how sought after the offering has become.

31:20 Transform is also a powerful cross selling engine, and it works in both directions for us. Several of our clients start with us in flex and having experienced our spaces, went on to give us their own design and build mandate. Equally, clients who first came for us to for Transform Fit Out have gone on to take Flex space across our network. Every Flex operator needs a strong design and build engine behind it. For us to it is also a front door to clients we who could not reach through seed sale alone and deepens our share of each client real estate and spend across both businesses. The numbers obviously reflect the momentum. We delivered about INR 149 crores of transformed revenue in H1 of FY 'twenty seven. This includes INR 75 crores in Q2.

32:07 We have over INR $2.20 crores of revenue across design, pipeline and deals, which gives us a strong visibility for H2 and keeps us firmly on track to our guidance of FY 'twenty seven of about INR 300 plus crores. Now coming to the GCC part of it. Obviously, GCC has has a structural demand driver for us. Right? India now has about 2,100 plus GCCs across 3,700 plus units. This employs about 2,360,000 people and generates about $98,000,000,000 of revenue. GCs took about 28,000,000 square feet in the first nine months of twenty twenty six, which is about 42% of all office leasing. They took 41% in September quarter alone. So demand is extremely strong. Quality led GCCs are obviously 58% of our leasing is happening in grade A plus assets, which is where, obviously, our gold and elite portfolio fits in.

33:03 The demand is concentrated in cities where network is deepest, right? Hyderabad is... Took 37%. Bangalore took 28%. Chennai was... Chennai and NCR were 11% each. So we serve about 105 unique GCC clients across nine cities. These clients range from somebody taking... Starting off at 50 seats to ending up at 2,000 seats in case of one of our large e commerce client companies. So GCC is a core focus for us, and it's demonstrated really grown for us in the last couple of years. And today, we are serving not only the first time GCCs, the mid tier GCCs, but also large GCCs looking for expansion of 1,000 plus seats in our network. Recently, I think Sumit mentioned, the 1,000 plus GCCs that we recently won in Chennai. And I think the pipeline for GCCs in our network continues to be extremely strong.

33:56 And that is a business where we have built strong partnerships with our alliance partners who are basically driving some of the GCCs from North America, Europe and even some in some cases from Asia. So this continue will continue to be a strong driver for us, and we feel confident as the H2 for FY 'twenty seven as well that the growth of the GCC network will continue to build up for us. Sir, just one more question. How much is the premium portfolio of our total portfolio size as in what percentage would be the premium portfolio? And where do you see it going ahead as in in a stable state? How much would be the premium portfolio... Total portfolio? Yeah. So, Rahul, obviously, premiumization is now a default, the way we are growing. Our gold and elite portfolio has grown from 26 centers a year ago to 39 today, 29 gold and 10 elite.

34:49 And the premium seats are up 58% year on year to 33,000 of our total 164 odd thousand seats. The gold centers are up almost 38% year on year, 21 to 29. And seats are up 36% from 14,800 to 20,100. Elite centers are up 100% to from five to 10, and seats are up 111 from 60,000 to 100 to 13,000. There's about onefive of our total supply built in a short span of in a very short span, and 100% of our new supply is in grade A and A plus portfolios, where we in high demand micro markets. Nearly 60% of the new supply we signed in FY 'twenty six was with institutional landlords, a significant step up in our partnership in India's marquee developers.

35:36 These assets are natural home for Golden Elite, which see disproportionate traction for enterprise and GCC clients. Enterprise and GCCs are choosing us for the address and the design and the service layer, and they are paying for it. Incremental seats, these centers are being signed at around 35% higher pricing than our flagship product. The premium cohort also brings larger clients, longer tenures and more allied services spend per seat. That is the better mix of clients and revenue, not just a higher price. The full financial benefit is still ahead of us. The chunk of premium centers are in the camp phase on the ramp up phase. Once they mature, higher realization, stronger pricing power, longer lock ins and deeper live services attachment more than offset that cost.

36:26 We expect to add another 2,500 to 33,000 seats in the premium portfolio in H2. Next question is from the line of Ishita Loda from Swan Investments. Hello, sir. Thank you for the opportunity. What was the portion of ancillary income in h one, and what is the outlook going forward? So broadly, about 16% of Us space revenue is part of the ancillary income, and we expect it to grow a bit more faster than our space.

37:31 So over the next twelve odd months, we expect the ancillary revenue to grow at about, know, 25 to 30% plus in that range. So this is primarily across components of IT services, FNB, center promotions, and mobility products, including devices, virtual offices, and meeting rooms. Okay. And what is the average fee density for a golden premium center? Sorry. What is the average? Fee density. Seed density? As in as in per square feet. Okay. Got it. So so, primarily, on a overall portfolio basis, we are looking at 50 square feet as a billable seat.

38:22 In terms of Golden Elite, our seat densities range from about 58 to 65 square feet on billable seat basis. Okay. Thank you so much. Next question is from the line of Ayushi from SciCapital. Hello. Am I hello? Am I audible properly? Yes. So thank you for taking my question. So my question is, what is the status of the roughly 3,000 fees regulated by the enterprise client in May?

39:08 Any update on that? Yeah. So I think we had some visibility around on the exit a bit prior. So our teams had been marketing this capacity during the Lutex period. The... We are today as of now almost about 57% to 58% of the total capacity is already soldcommitted where we are expecting that by December, almost 55% to 61% will be filled in with the revenues starting for us. Remaining the pipeline is strong for the remaining seats. Okay. Thank you, sir. Thank you.

39:58 That was the last question for today. I now hand the conference over to the management for closing comments. Thank you, everyone, for joining us today. The first half has delivered what we set out in August, growth in the premium portfolio, higher occupancy and longer lock ins, and cash EBITDA tracking to our full year range. Should you have any further questions or required clarifications, please reach out to SGA, our investor relations advisers. Thank you once again, and a very happy Diwali to you and your families. Thank you. On behalf of Awfis Space Solutions Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.