WeWork India narrows Q1 loss, grows revenue 28% amid expansion

WeWork India reported a 27.7% year-on-year jump in first-quarter revenue to Rs 683.83 crore, up from Rs 535.31 crore in the same period last year. Simultaneously, its consolidated net loss narrowed sharply to Rs 4.31 crore from Rs 14.10 crore, signaling that the flexible workspace operator is approaching profitability as it scales.

The company’s operational footprint grew 18.5% year-on-year to 79 centres across eight cities, covering 9.1 million square feet of workspace. Including signed leases and letters of intent, total committed space reached 12 million square feet, a 29.9% increase. Crucially, this aggressive physical expansion is being funded internally, with free cash flow from operations surging 176.1% to Rs 141.9 crore.

Underpinning this growth is a robust balance sheet that separates the Indian entity from the troubled legacy of its former US parent. WeWork India maintains an A+ credit rating with borrowing costs holding steady at 8.5%. Capital efficiency remains a standout metric, with return on capital employed hitting 28.6% for the quarter.

Yet, the market's reaction underscores the tension between operational execution and elevated expectations. The stock dropped 5% in Friday's session despite the strong earnings, a pullback that reflects the stock's premium valuation. With a market capitalisation near Rs 9,856 crore, the shares trade at a price-to-earnings ratio of 132.42 and a price-to-book ratio of 32.94.

Even after a 35% rally over the past three months that took the stock close to its 52-week high of Rs 767, those multiples leave little margin for disappointment. Technically, the shares are showing signs of near-term fatigue. While the 14-day relative strength index sits at a healthy 63.8, the stock has slipped beneath its short-term 5-day and 10-day simple moving averages, suggesting investors are actively taking profits.