Brokerage Highlights Flexible Workspace Leader and Affordable Housing Financier as High-Conviction Picks Backed by Robust Growth Outlook

Kotak Securities has reiterated its positive outlook on Smartworks Coworking Spaces and Aptus Value Housing Finance India, identifying both companies as compelling investment opportunities with significant upside potential. The brokerage believes strong sectoral tailwinds, healthy financial performance and scalable business models position both companies to deliver sustainable earnings growth over the coming years.

Kotak Securities has assigned a fair value of ₹630 to Smartworks Coworking Spaces and ₹400 to Aptus Value Housing Finance, implying considerable upside from their current market prices.

Smartworks Positioned to Benefit from India's Flexible Office Revolution

Kotak Securities remains optimistic about Smartworks Coworking Spaces, India's largest organized operator in the mid-priced flexible workspace segment.

The company has established itself as a leading provider of managed office solutions for large enterprises, multinational corporations, Global Capability Centres (GCCs), Indian corporates and fast-growing startups.

With businesses increasingly adopting hybrid work models and asset-light office strategies, flexible workspaces have become one of the fastest-growing segments within India's commercial real estate market.

Industry estimates suggest that flexible office spaces now account for nearly one-third of incremental office leasing in the country, creating a favourable long-term growth environment for organized operators such as Smartworks.

Strong Expansion Pipeline Supports Future Growth

Smartworks has continued expanding aggressively while maintaining healthy operating metrics.

The company operated more than 1.01 crore square feet of workspace at the end of FY26 and has built a substantial development pipeline comprising properties under fit-outs, projects awaiting handover and facilities under signed Letters of Intent (LOIs).

Management plans to add approximately 25–30 lakh square feet annually over the next few years, providing clear visibility for sustained revenue and earnings growth.

Kotak expects the company's operational portfolio to expand significantly by FY28, supported by rising occupancy levels and increasing demand from enterprise clients.

Healthy Earnings and Balance Sheet Strengthen Investment Case

Smartworks delivered impressive operational performance during FY26.

Adjusted EBITDA increased by approximately 83% year-on-year, while EBITDA margins improved through operating leverage and better capacity utilisation.

The brokerage also highlighted the company's healthy balance sheet, supported by a net cash position and committed long-term customer contracts that provide strong revenue visibility.

Management has guided for revenue growth of nearly 30% and further margin expansion during FY27, reinforcing confidence in the company's long-term earnings trajectory.

Kotak Securities expects adjusted EBITDA to grow at around 25% CAGR over FY26-FY28, making current valuations attractive relative to future growth prospects.

Smartworks Coworking – Kotak Securities Recommendation

• Current Market Price: ₹496

• Fair Value: ₹630

• Resistance Zone: ₹525–550

• Support Zone: ₹460–475

Aptus Value Housing Continues to Benefit from Affordable Housing Demand

Kotak Securities also maintains a constructive outlook on Aptus Value Housing Finance India, which specializes in secured home loans for self-employed customers across semi-urban and rural markets.

The company primarily caters to low- and middle-income borrowers who often remain underserved by traditional banks, creating a large addressable market with significant long-term growth potential.

Its lending model focuses on loans backed by self-occupied residential properties, helping maintain relatively healthy asset quality while generating industry-leading lending spreads.

Robust Financial Performance Reflects Operational Discipline

Aptus has consistently demonstrated strong profitability and disciplined credit underwriting.

During FY26, the company's Assets Under Management (AUM) grew by more than 20%, while annual net profit increased to approximately ₹943 crore.

The company continues to report one of the highest profitability metrics in the housing finance sector, with a Return on Assets (RoA) of nearly 8% and Return on Equity (RoE) exceeding 20%.

Although gross and net non-performing assets increased marginally during the year, overall asset quality remains healthy and well within manageable levels.

Strong capital adequacy, efficient funding costs and disciplined risk management continue to support the company's long-term growth strategy.

Expansion Beyond Southern India

Aptus is now expanding beyond its traditional markets in South India by increasing its presence in states such as Maharashtra and Odisha.

Management is targeting annual AUM growth of 20–22%, supported by branch expansion and deeper penetration into Tier-III and Tier-IV towns where formal housing finance remains underpenetrated.

The company has also refined its lending strategy by reducing exposure to smaller-ticket loans and focusing on customers with stronger repayment capacity, a move expected to improve portfolio quality over time.

The brokerage believes these initiatives will help sustain healthy earnings growth while preserving asset quality.

Aptus Value Housing – Kotak Securities Recommendation

• Current Market Price: ₹269

• Fair Value: ₹400

• Resistance Zone: ₹275–280

• Support Zone: ₹252–260

Long-Term Themes Continue to Drive Both Businesses

Kotak Securities believes both companies are aligned with long-term structural growth trends in the Indian economy.

Smartworks is expected to benefit from increasing office space outsourcing, expansion of Global Capability Centres, rising demand for managed workplaces and continued growth in India's commercial real estate market.

Aptus, meanwhile, stands to gain from rising home ownership, financial inclusion, increasing housing credit penetration and government initiatives supporting affordable housing across smaller cities and towns.

Investment Outlook

The brokerage believes both Smartworks Coworking Spaces and Aptus Value Housing Finance offer attractive long-term investment opportunities supported by scalable business models, improving financial performance and favourable industry dynamics.

While investors should remain mindful of broader market volatility, interest rate movements and economic conditions, Kotak Securities believes the current valuations provide an attractive entry point for investors seeking exposure to India's structural growth themes.

With healthy balance sheets, expanding market opportunities and strong execution capabilities, both companies remain well-positioned to deliver sustainable shareholder value over the medium to long term.