With a market capitalisation of ₹3,946.79 crores, Indiqube Spaces operates in the highly competitive diversified commercial services sector, focusing on flexible workspace solutions for enterprises and start-ups. The December quarter results reveal a company experiencing robust top-line momentum—net sales surged 11.37% sequentially to ₹389.94 crores and an impressive 45.56% year-on-year—yet struggling to translate this growth into bottom-line profitability due to substantial interest costs and depreciation charges.
The company's financial performance presents a paradox: strong operational efficiency with operating margins exceeding 60%, but persistent losses driven by a capital-intensive business model requiring significant debt financing. The interest expense of ₹112.33 crores in Q3 FY26 alone consumed nearly half of the operating profit, highlighting the structural challenge facing the business.
Financial Performance: Revenue Momentum Masks Bottom-Line Struggles
Indiqube Spaces delivered its strongest quarterly revenue performance in Q3 FY26, with net sales reaching ₹389.94 crores, representing an 11.37% sequential increase from ₹350.14 crores in Q2 FY26 and a robust 45.56% year-on-year growth from ₹267.89 crores in Q3 FY25. This marks the eighth consecutive quarter of revenue expansion, demonstrating consistent demand for flexible workspace solutions despite broader economic headwinds.
| Quarter | Revenue (₹ Cr) | QoQ Growth | Net Profit (₹ Cr) | Operating Margin | PAT Margin |
|---|---|---|---|---|---|
| Dec'25 | 389.94 | +11.37% | -17.07 | 60.85% | -4.38% |
| Sep'25 | 350.14 | +13.21% | -29.87 | 59.37% | -8.53% |
| Jun'25 | 309.29 | +4.16% | -36.76 | 60.82% | -11.89% |
| Mar'25 | 296.94 | +10.84% | -31.33 | 57.24% | -10.55% |
| Dec'24 | 267.89 | +6.23% | -13.73 | 58.89% | -5.13% |
| Sep'24 | 252.19 | +4.09% | -52.52 | 57.41% | -20.83% |
| Jun'24 | 242.27 | — | -42.04 | 59.46% | -17.35% |
The operating profit (PBDIT) excluding other income stood at ₹237.27 crores in Q3 FY26, the highest in the company's recent history, with an exceptional operating margin of 60.85%. This represents a 148-basis-point sequential improvement from 59.37% in Q2 FY26 and a 196-basis-point expansion year-on-year. The margin improvement reflects operational leverage as the company scales its workspace portfolio without proportionate increases in operating costs.
However, the strong operating performance fails to translate into profitability at the net level. The net loss of ₹17.07 crores in Q3 FY26, whilst improved from Q2's ₹29.87 crores, still represents a PAT margin of negative 4.38%. On a year-on-year basis, the loss widened from ₹13.73 crores in Q3 FY25, raising questions about the sustainability of the business model despite revenue growth.
The Debt Burden: Interest Costs Eroding Operational Gains
The primary impediment to Indiqube Spaces' profitability remains its substantial debt burden and the consequent interest obligations. In Q3 FY26, the company incurred interest expenses of ₹112.33 crores, representing a 5.19% sequential increase from ₹106.79 crores in Q2 FY26 and a staggering 30.20% year-on-year surge from ₹86.27 crores in Q3 FY25. These interest costs consumed 47.34% of the operating profit (excluding other income), leaving limited room for profitability after accounting for depreciation.
Depreciation charges further compound the challenge, standing at ₹169.19 crores in Q3 FY26, up 8.29% sequentially and 44.79% year-on-year. The combined impact of interest and depreciation totalling ₹281.52 crores far exceeded the operating profit of ₹237.27 crores, resulting in a loss before tax of ₹23.10 crores. Even after accounting for a tax credit of ₹6.03 crores, the company posted a net loss.
Critical Concern: Debt Servicing Overwhelming Operations
Interest Coverage Deteriorating: The operating profit to interest ratio stands at just 2.11 times in Q3 FY26, indicating limited cushion for debt servicing. With long-term debt of ₹222.47 crores as of March 2025 and a debt-to-EBITDA ratio averaging 7.18 times, the company faces significant financial leverage risks. The average EBIT-to-interest coverage of 0.0 times over recent periods highlights the structural challenge of generating sufficient operating profits to cover financing costs.
Capital-Intensive Model: The flexible workspace business requires substantial upfront capital investment in property leases, fit-outs, and infrastructure, leading to high depreciation charges. The company's fixed assets stood at ₹655.28 crores as of March 2025, necessitating continuous capital deployment to maintain and expand the portfolio.
The company's balance sheet reveals negative shareholder funds of ₹3.11 crores as of March 2025, down from positive ₹130.63 crores in March 2024, reflecting accumulated losses. Current liabilities of ₹807.62 crores significantly exceed current assets of ₹210.09 crores, raising working capital concerns. However, the company maintains positive cash flow from operations at ₹611 crores for FY25, suggesting operational viability despite accounting losses driven by non-cash depreciation charges.
Quality Assessment: Below-Average Fundamentals Despite Growth
Indiqube Spaces carries a "Below Average" quality grade, reflecting long-term financial performance concerns despite recent operational improvements. The company's average return on capital employed (ROCE) stands at just 2.93%, well below industry standards, whilst return on equity (ROE) averages 0.0%, indicating negligible returns to shareholders. The latest ROE of negative 25.37% underscores the profitability challenge.
On the positive side, the company demonstrates strong revenue growth momentum with a five-year sales CAGR of 27.50% and impressive EBIT growth of 178.00% over the same period. The absence of promoter pledging (0.0% pledged shares) and zero net debt position (net debt-to-equity of negative 13.18, indicating the company holds more cash than debt on a consolidated basis) provide some comfort regarding financial stability.
Mixed Quality Signals
Strengths: The company exhibits robust top-line growth, expanding from ₹294 crores in FY21 to ₹1,059 crores in FY25, reflecting strong market demand for flexible workspace solutions. Operating margins have improved significantly from 13.6% in FY21 to 58.2% in FY25, demonstrating operational leverage and efficiency gains as the business scales.
Weaknesses: Persistent losses with cumulative net losses exceeding ₹700 crores over the past five years raise sustainability concerns. The high debt-to-EBITDA ratio of 7.18 times and weak interest coverage indicate financial stress. Institutional holdings at just 16.96% suggest limited confidence from sophisticated investors.
Peer Comparison: Valuation Premium Without Profitability
Comparing Indiqube Spaces to its peer group in diversified commercial services reveals a concerning valuation disconnect. The company trades at a price-to-book value of 6.79 times despite generating zero return on equity, whilst peers with positive ROE trade at more reasonable multiples.
| Company | P/E (TTM) | P/BV | ROE (%) | Debt/Equity | Div Yield |
|---|---|---|---|---|---|
| Indiqube Spaces | NA (Loss Making) | 6.79 | 0.0% | -13.18 | NA |
| Smartworks Cowork | NA (Loss Making) | 10.42 | 0.0% | 2.99 | NA |
| CMS Info Systems | 14.94 | 2.29 | 17.17% | -0.10 | 1.91% |
| SIS | 48.13 | 1.95 | 13.54% | 0.28 | 2.01% |
| Nirlon | 14.56 | 9.98 | 43.98% | 1.83 | 5.06% |
| Hemisphere Prop | NA (Loss Making) | 9.17 | 0.0% | 0.14 | NA |
Whilst Indiqube Spaces trades at a lower P/BV multiple than fellow loss-making peer Smartworks Cowork (10.42x), it commands a significant premium over profitable peers like CMS Info Systems (2.29x) and SIS (1.95x), which generate healthy returns on equity of 17.17% and 13.54% respectively. The market appears to be pricing in future profitability expectations, but the current financial performance does not justify the valuation premium.
Indiqube Spaces ranks sixth in market capitalisation amongst the peer group at ₹3,947 crores, positioning it as a mid-sized player in the diversified commercial services space. The company's inability to generate profits despite strong revenue growth contrasts sharply with profitable peers, raising questions about the business model's viability at scale.
Valuation Analysis: Expensive Multiple for Unprofitable Business
Indiqube Spaces trades at valuation multiples that appear disconnected from underlying fundamentals. With an EV-to-EBITDA ratio of 13.00 times and EV-to-sales of 7.57 times, the company commands premium valuations typically reserved for high-growth, profitable businesses. However, the company's loss-making status renders traditional P/E ratios meaningless, with the metric showing as "NA (Loss Making)".
The price-to-book value of 6.79 times appears particularly stretched given the company's negative book value per share of ₹-0.79 and negative shareholder funds of ₹3.11 crores. The market is essentially valuing the company based on future earnings potential rather than current asset backing or profitability, a risky proposition given the persistent losses.
The company's overall valuation assessment stands at "RISKY", having transitioned from "Does Not Qualify" status in September 2025. The stock currently trades 23.63% below its 52-week high of ₹243.80, suggesting some correction from peak valuations, but remains 12.71% above the 52-week low of ₹165.20.
Shareholding Pattern: Institutional Confidence Building Gradually
The shareholding pattern reveals evolving investor sentiment, with notable changes across quarters. Promoter holding stood at 60.04% in December 2025, declining marginally by 0.56 percentage points from 60.60% in September 2025, likely due to dilution from the recent IPO and listing in late 2024.
| Stakeholder | Dec'25 | Sep'25 | Jul'25 | QoQ Change |
|---|---|---|---|---|
| Promoter | 60.04% | 60.60% | 60.60% | -0.56% |
| FII | 2.30% | 2.67% | 22.88% | -0.37% |
| Mutual Funds | 9.12% | 8.31% | 5.16% | +0.81% |
| Insurance | 0.40% | 0.55% | 0.43% | -0.15% |
| Other DII | 5.15% | 5.52% | 6.45% | -0.37% |
| Non-Institutional | 22.99% | 22.35% | 4.48% | +0.64% |
The most significant development has been the substantial decline in FII holdings from 22.88% in July 2025 to just 2.30% in December 2025, representing a massive 20.58 percentage point reduction over two quarters. This suggests foreign institutional investors have been reducing exposure, possibly due to concerns about profitability and valuation. The September quarter alone saw FII holdings drop by 20.21 percentage points, indicating a sharp exit.
Conversely, mutual fund holdings have been rising steadily, increasing from 5.16% in July 2025 to 9.12% in December 2025, with an 0.81 percentage point sequential gain in Q3. This suggests domestic institutional investors are taking a more constructive view, possibly betting on the company's growth trajectory and eventual path to profitability. The presence of eight mutual funds indicates diversified domestic institutional interest.
Non-institutional holdings surged dramatically from 4.48% in July 2025 to 22.99% in December 2025, likely reflecting retail investor participation following the IPO and listing. The absence of promoter pledging (0.0%) provides comfort regarding promoter confidence and financial stability.
Stock Performance: Short-Term Bounce Amid Long-Term Underperformance
Indiqube Spaces has exhibited volatile price action since its recent listing, with the stock currently trading at ₹186.20, registering a 5.29% single-day gain on February 11, 2026. The one-week performance shows a positive 5.50% return, outperforming the Sensex by 4.92 percentage points, suggesting short-term momentum following the Q3 results.
| Period | Stock Return | Sensex Return | Alpha |
|---|---|---|---|
| 1 Day | +5.29% | +0.03% | +5.26% |
| 1 Week | +5.50% | +0.58% | +4.92% |
| 1 Month | -4.54% | +0.87% | -5.41% |
| 3 Months | -14.19% | +0.51% | -14.70% |
| 6 Months | -12.31% | +4.59% | -16.90% |
| YTD (2026) | -9.61% | -1.08% | -8.53% |
However, the medium-term picture reveals significant underperformance. The stock has declined 4.54% over the past month, underperforming the Sensex by 5.41 percentage points. The three-month return of negative 14.19% and six-month return of negative 12.31% highlight sustained selling pressure, with the stock underperforming the benchmark by 14.70 and 16.90 percentage points respectively.
Year-to-date, Indiqube Spaces has declined 9.61% in 2026, underperforming the Sensex's 1.08% decline by 8.53 percentage points. The stock trades below all key moving averages—5-day (₹173.85), 20-day (₹183.83), 50-day (₹195.37), and 100-day (₹209.79)—indicating a bearish technical setup despite the recent bounce.
The technical trend classification remains "N/A" given the stock's recent listing, but the consistent underperformance across timeframes and position below moving averages suggests weak momentum. The delivery volume data shows 66.27% delivery on February 10, 2026, significantly above the five-day average of 54.42%, indicating genuine buying interest rather than speculative trading.
Investment Thesis: Growth Story Undermined by Profitability Concerns
The investment case for Indiqube Spaces presents a classic growth-versus-profitability dilemma. The company operates in an attractive market with strong structural tailwinds—the flexible workspace segment continues to gain traction as enterprises seek agile real estate solutions and start-ups require scalable office infrastructure. Indiqube's consistent revenue growth of 27.50% over five years and impressive operating margins above 60% demonstrate operational competence and market acceptance.
However, the investment thesis is significantly undermined by persistent losses, high debt burden, and questionable valuation. The company has accumulated losses exceeding ₹700 crores over five years, with no clear path to profitability despite scale advantages. Interest costs of ₹112.33 crores quarterly and depreciation of ₹169.19 crores create a structural impediment to earnings generation, requiring either significant deleveraging or a fundamental shift in the business model.
The proprietary Mojo Score of 32 out of 100 places the stock firmly in "SELL" territory, reflecting concerns about valuation, quality, and profitability. The score improved from "STRONG SELL" status in November 2025 at ₹220.35, suggesting some recognition of operational improvements, but remains in cautionary territory.
KEY STRENGTHS ✓
- Robust Revenue Growth: Consistent 27.50% five-year sales CAGR with 45.56% YoY growth in Q3 FY26 demonstrates strong market demand and execution capability
- Exceptional Operating Margins: Operating margin of 60.85% in Q3 FY26, highest in eight quarters, reflects operational leverage and efficiency as business scales
- Narrowing Losses: Net loss improved 42.85% sequentially from ₹29.87 crores to ₹17.07 crores, showing progress towards breakeven
- Zero Promoter Pledging: No pledged shares (0.0%) indicates promoter confidence and financial stability
- Positive Operating Cash Flow: Cash flow from operations of ₹611 crores in FY25 demonstrates underlying business viability despite accounting losses
- Growing Mutual Fund Interest: MF holdings increased from 5.16% to 9.12% over two quarters, suggesting building domestic institutional confidence
- Market Leadership Position: Established presence in attractive flexible workspace segment with structural growth tailwinds
KEY CONCERNS ⚠️
- Persistent Losses: Cumulative losses exceeding ₹700 crores over five years with no clear path to profitability despite scale
- Heavy Interest Burden: Interest costs of ₹112.33 crores quarterly consume 47% of operating profit, eroding bottom line
- High Debt Levels: Debt-to-EBITDA ratio of 7.18 times and weak interest coverage of 2.11 times indicate financial stress
- Negative Shareholder Funds: Book value of ₹-3.11 crores reflects accumulated losses and weak balance sheet
- Expensive Valuation: P/BV of 6.79x and EV/Sales of 7.57x appear disconnected from loss-making fundamentals
- FII Exodus: Foreign institutional holdings collapsed from 22.88% to 2.30% in two quarters, signalling concern
- Weak Returns: ROE of 0.0% and ROCE of 2.93% indicate poor capital efficiency and shareholder value creation
Outlook: Critical Inflection Point Approaching
Indiqube Spaces stands at a critical juncture. The company has demonstrated its ability to scale revenue and maintain industry-leading operating margins, but must now prove it can convert operational efficiency into sustainable profitability. The narrowing losses in Q3 FY26 provide some optimism, but the trajectory towards breakeven remains uncertain given the structural cost base.
POSITIVE CATALYSTS 📈
- Continued revenue momentum above 10% quarterly growth sustaining margin expansion
- Debt refinancing or deleveraging reducing interest burden below ₹100 crores quarterly
- Achievement of EBITDA-to-interest coverage above 3.0 times indicating improved debt serviceability
- Reaching breakeven profitability within next 2-3 quarters based on current trajectory
- Increased institutional participation, particularly from quality mutual funds and FIIs
RED FLAGS 🚩
- Revenue growth deceleration below 5% quarterly indicating market saturation or competitive pressure
- Operating margin compression below 55% eroding profitability pathway
- Further increase in debt levels or interest costs above current ₹112 crores quarterly
- Continued FII selling or decline in mutual fund holdings below 8%
- Inability to achieve profitability within next 12 months raising sustainability concerns
The flexible workspace market in India continues to exhibit strong growth potential, with increasing adoption by enterprises and start-ups alike. However, the competitive landscape remains intense, with multiple players vying for market share. Indiqube's ability to maintain pricing power whilst scaling operations will determine whether the current business model can generate sustainable returns.
Key monitoring points for investors include quarterly progression towards profitability, debt management and interest cost trends, operating margin sustainability above 60%, and institutional investor sentiment as reflected in shareholding patterns. The company's ability to generate positive earnings within the next four to six quarters will be critical for validating the current valuation and investment thesis.
The Verdict: Avoid Until Profitability Pathway Becomes Clear
Score: 32/100
For Fresh Investors: Avoid initiating positions at current levels. Whilst the revenue growth story appears compelling, the persistent losses, high debt burden, and expensive valuation create unfavourable risk-reward dynamics. Wait for concrete evidence of a sustainable path to profitability, preferably with at least two consecutive quarters of positive net profit, before considering entry. The stock's 23.63% decline from 52-week highs reflects legitimate concerns about the business model's viability.
For Existing Holders: Consider reducing exposure or exiting positions, particularly if acquired near listing prices or 52-week highs. The 42.85% sequential improvement in losses provides a tactical opportunity to exit with limited damage. The substantial FII exodus from 22.88% to 2.30% holdings over two quarters signals institutional concern that retail investors should heed. Only long-term investors with high risk tolerance and conviction in the flexible workspace thesis should maintain positions, accepting potential further downside.
Fair Value Estimate: ₹140-155 (25-30% downside from current levels), based on discounted cash flow analysis assuming profitability achievement within 18-24 months and normalised P/BV multiples of 3-4x for loss-making growth companies. Current valuation of 6.79x P/BV appears unjustified without near-term earnings visibility.
Note: ROCE = (EBIT - Other income)/(Capital Employed - Cash - Current Investments)
⚠️ Investment Disclaimer
This article is for educational and informational purposes only and should not be construed as financial advice. Investors should conduct their own due diligence, consider their risk tolerance and investment objectives, and consult with a qualified financial advisor before making any investment decisions. Past performance is not indicative of future results. Investments in equity markets carry inherent risks, including the potential loss of principal.
