The shares of WeWork India Management jumped nearly 8 percent in the morning trading hours of November 18 after international brokerage Jefferies initiated a ‘Buy’ call on the stock, with a target price implying strong upside potential from current levels.
The shares of the company hit an intraday high of Rs 662.80 apiece. The stock then pared some gains to trade around 5 percent higher in the green at Rs 644.45 apiece, as seen at 10.20 am.
Jefferies initiates ‘Buy’ on WeWork India:
Jefferies has initiated coverage on the newly-listed stock with a ‘Buy’ call and a target price of Rs 790 apiece. This implies an upside potential of nearly 28.5 percent from the stock’s previous closing price of Rs 614.8 apiece.
The international brokerage said that the company is the largest flexible workspace operator by revenue in India. It added that higher returns than office landlords and faster growth makes WeWork India an attractive play on India's office market. The segment too is growing at around 17 percent CAGR, which is 2 times the pace of office stock. However, Jefferies cautions that a sharp downturn in office demand remains key risk to the firm’s growth potential.
It added that WeWork India is expected to add approximately 15,000-20,000 seats annually over the next 3 years and that the company’s presence in top-8 cities enables it to target high-end member base, supporting average revenue per user roughly twice that of listed peers.
Jefferies noted that WeWork India's premium positioning is evident in its peer-leading FY25 revenue-to-rent ratio of 2.7, a critical driver of profitability. It added that the premium positioning of the company supports higher ARPM and margin. It expects the company to post 22 percent/28 percent IGAAP revenue/EBITDA CAGR over FY25–28.
WeWork India share price history:
WeWork India shares had made a muted market debut earlier this year, listing almost flat with marginal premium over the IPO price at Rs 650 apiece on NSE. The stock then fell 8 percent since listing to hit a low of Rs 598 apiece last week on November 12.
The stock has now recovered nearly 11 percent since then, and is around 2 percent higher than its listing price.
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(With inputs from agencies)
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