WeWork India’s FY25 financials mark a significant milestone—it turned profitable for the first time, reporting a profit after tax (PAT) of ₹128.2 crore, thanks primarily to a substantial deferred tax gain of ₹285.7 crore. Without this tax advantage, the company would have recorded a pre-tax loss of approximately ₹156.7 crore, widening 15% from the previous fiscal year.
Financial Highlights & Context
- Revenue Growth: Operating revenue surged by 17%, growing from ₹1,665.1 crore in FY24 to ₹1,949.2 crore in FY25.
- Profit Drivers: The sharp move into profitability was largely tax-driven, as the deferred tax benefit nearly doubled the earnings impact.
- Half-Year Performance (H1 FY25): WeWork India had earlier reported a net profit of ₹174 crore in H1 FY25, fueled by strong demand for premium co-working spaces.
What This Profit Means
- Milestone Turnaround
After reporting net losses—₹135.7 crore in FY24—WeWork India’s FY25 profitability signals a potential industry rebound. - Tax Accounting Influence
The deferred tax gain played a major role, raising questions about the sustainability of profit margins without such one-time benefits. - IPO Momentum
The financial upswing strengthens its position ahead of the anticipated IPO. Current plans involve a pure Offer-for-Sale (OFS), which won’t raise fresh capital but can offer liquidity and public valuation visibility. - Market Dynamics
WeWork India remains a market leader amid a rising tide of co-working IPOS—Smartworks, Awfis, TableSpace, among others—underscoring investor focus on the sector. Entrackr
Why It’s Important
- Operational Resilience: The company demonstrated adaptability by shifting focus to enterprise clients and optimizing lease operations—key to its financial reinstatement.
- Industry Signal: WeWork India’s turnaround offers hope for an asset-heavy, previously loss-making business model in India, countering the global narrative of WeWork’s struggles.
- Future Strategy Considerations: The company must now navigate sustaining profits, managing long-term leases, and diversifying revenue sources beyond Bengaluru and Mumbai where a majority of earnings converge.
