Stocks recommendations by Shrikant Chouhan of Kotak Securities
Smartworks Coworking Spaces
Last close: ₹496 Fair Value: ₹630 Resistance: ₹525, ₹550 Support: ₹475-460 Smartworks is India’s leading flexible workspace operator, with an operational portfolio of 1.01 crore sq. ft. as of FY26, making it the largest player in the organized mid-priced flexible office segment, where the average realization stood at approximately ₹7,300 per seat in FY25. The company primarily caters to mid- and large-sized enterprises, serving a diversified client base comprising Indian corporates, multinational companies, GCCs and fast-growing start-ups. The structural outlook for the flexible workspace industry remains favourable, with flex offices accounting for nearly one-third of incremental office leasing in India. Although India has over 500 flexible workspace operators, the market remains concentrated, with the top 10 players controlling nearly 60% of the total flexible office stock, and Smartworks continues to hold the leadership position. Operational execution remained strong in FY26, with the company reporting 83% YoY growth in adjusted EBITDA to ~Rs310 crore, supported by 24% growth in operational area and a 500-bps expansion in EBITDA margin to 17.5%. Smartworks expanded its operational footprint to 1.01 crore sq. ft., while maintaining a healthy development pipeline of 60 lakh sq. ft., comprising 11 lakh sq. ft. under fit-outs, 25 lakh sq. ft. awaiting handover and 24 lakh sq. ft. under signed LOIs. Management has indicated clear supply visibility through FY28 and plans to add 25-30 lakh sq. ft. annually. The company benefits from diversified demand across sectors, reducing client concentration risk. As of March 2026, committed locked-in revenues were 2.1x locked-in rental obligations, providing strong earnings visibility. Smartworks also maintained a net cash position of Rs56 crore, highlighting a healthy balance sheet. The management has guided for 28-30% revenue growth and 19% EBITDA margins in FY27. We expect adjusted EBITDA to grow at a 25% CAGR over FY26-28E, driven by expansion of the operational portfolio to 1.47 crore sq. ft. and blended occupancy of 83.6%. Valuations remain attractive relative to its growth and return profile. We value the company using a DCF-based methodology, arriving at a fair value of Rs630 per share.
Aptus Value Housing
Last close: ₹269 Fair Value: ₹400 Resistance: ₹275-280 Support: ₹260-252 Aptus Value Housing Finance India Limited (APTUS) operates as a high-margin retail housing finance institution. It explicitly targets self-employed, low-to-middle-income individuals. These consumers reside primarily in semi-urban and rural markets across South and Western India. The company avoids aggressive microfinance-style profiles by enforcing strict collateral requirements. Its foundational policy mandates that loans are backed entirely by self-occupied residential properties. Aptus manages a lean operational framework with low cost-of-funds. This structure allows the business to sustain healthy lending spreads of approximately 9%. Aptus maintains a robust financial profile, holding an [ICRA]AA (Stable) rating. The company boasts a stellar Return on Assets (RoA) of 7.9% and a Return on Equity (RoE) of 20.1%. Annual net profit grew 26% year-on-year to ₹943 Crores. This was driven by a 21% expansion in Assets Under Management (AUM), reaching ₹13,107 Crores. GNPA have increased to 1.52% compared to 1.19% in FY25. Whereas, NNPA has rose to 1.15%, up from 0.89% in FY25. The forward-looking runway for Aptus remains strong, supported by low mortgage penetration in India’s Tier-3 and Tier-4 towns. Management targets a consistent annual AUM growth of 20% to 22%. This trajectory is backed by aggressive branch additions beyond its southern stronghold into Odisha and Maharashtra. To insulate its portfolio against credit cycles, Aptus has strategically discontinued small-ticket loan sanctions below ₹7 Lakhs. This structural change shifts its concentration toward more resilient borrowers. Backed by solid capital adequacy, optimized borrowing costs, and stable asset quality, Aptus is well-positioned to maintain its industry-leading profitability metrics. (Disclaimer: This article is by Shrikant Chouhan, head equity research, Kotak Securities. Views expressed are his own.)
