OYO posts first annual profit of nearly ₹100 crore in FY24

Oyo, the Indian budget friendly hotel aggregator upstart, has finally swung into the green, after being years in the financial red. The company has achieved a major milestone, its first-ever profitable financial year. This news was announced by founder Ritesh Agarwal on social media platform X.

According to Agarwal, Oravel Stays, the parent company of the hospitality giant, achieved a profit after tax (PAT) of nearly ₹100 crore for the fiscal year 2023-24. This achievement was preceded by a crucial eight consecutive quarters of positive EBITDA (earnings before interest, taxes, depreciation, and amortization). Agarwal’s post also mentioned that the company’s cash reserves stand at approximately ₹1,000 crore, providing the company with greater flexibility and resources for future endeavors.

This financial performance represents a significant turnaround for OYO, which reported a net loss of ₹1,287 crore in the previous fiscal year, 2022-23. The company’s revenue from operations for that year was ₹5,464 crore. In contrast, for 2023-24, OYO’s revenue is reported to be around $700 million (approximately ₹5,800 crore). “I see growth ahead not just in India with emerging travel trends such as premiumization, spiritual travel, business travel and conferences, destination weddings but also in our other key markets of Nordics, South East Asia, US and UK,” Agarwal wrote in his post on X. He added that the numbers

This development comes even as Oyo withdrew its draft papers for an initial public offering (IPO) for the second time in three years. However, OYO is actively seeking to raise $350 million to $450 million through bond issuance as part of its refinancing plan. Additionally, the company is looking to attract private investors for equity funding at a valuation of $3 billion to $4 billion, significantly lower than its peak valuation of $10 billion in 2019.

In FY24, OYO expanded its portfolio significantly, adding approximately 5,000 hotels and 6,000 homes globally. This expansion is part of OYO’s broader strategy to enhance its market presence and cater to a diverse range of customer needs. The gross booking value (GBV) per storefront per month for hotels was Rs 3.32 lakh (approximately $4,000). This improved financial performance has been recognized by global credit rating agency Fitch, which recently upgraded Oravel Stays Limited’s long-term foreign- and local-currency issuer default ratings from ‘B-‘ to ‘B’. Fitch also upgraded OYO’s senior secured term loan facility to ‘B’ from ‘B-‘, citing the company’s improved financial profile, sustained EBITDA growth, and a recent $195 million debt buyback.

For FY24, OYO reported an adjusted EBITDA of ₹888 crore (approximately $107 million), a significant increase from ₹274 crore (around $33 million) in FY23. Furthermore, OYO’s gross margins improved to ₹2,508 crore (around $302 million) from ₹2,350 crore (approximately $283 million) in FY23. Operating costs also saw a reduction, decreasing from 19% of GBV in FY23 to 14% in FY24.