(Reuters) -Flexible workspace provider WeWork India Management 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, 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 posted a narrower second-quarter loss. IndiQube Spaces will report later on Monday and Awfis Space Solutions 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)
(Reporting by Urvi Dugar in Bengaluru; Editing by Harikrishnan Nair)
