OYO, the travel tech platform, has reported its first profitable financial year (2023-24), achieving a net profit of nearly ₹100 crore. Founder and CEO Ritesh Agarwal made the announcement on Twitter, expressing his gratitude and optimism.
In his post, Agarwal highlighted the company’s strong financial health, marked by eight consecutive quarters of positive EBITDA and a cash balance of around ₹1000 crore. “While a delighted customer or a hotel partner brings the biggest smile on my face, our first cut financials of FY24 have me humbled as well,” Agarwal stated.
While a delighted customer or a hotel partner brings the biggest smile on my face, our first cut financials of FY24 have me humbled as well.
We had our maiden net profitable financial year at nearly Rs 100 cr. This was our eighth consecutive quarter of a positive EBITDA and we…
— Ritesh Agarwal (@riteshagar) May 30, 2024
Fitch Ratings
Earlier this week, Fitch Ratings upgraded the rating of OYO’s parent firm, Oravel Stays, citing the company’s improved financial profile. Fitch upgraded Oravel Stay’s long-term foreign and local currency issuer default ratings from B- to B with a stable outlook. The rating on OYO’s $660 million senior secured term loan facility due in 2026 was also upgraded from B- to B. The rating agency acknowledged OYO’s strong cash flows and improving financial health, driven by EBITDA growth and a recent $195 million debt buyback.
OYO’s Financial Performance
OYO’s financial performance for FY24 was marked by significant milestones:
- Net Profit: ₹99.6 crore ($12 million)
- Adjusted EBITDA: ₹888 crore ($107 million) (up from ₹274 crore ($33 million) in FY23)
In FY24, OYO added about 5000 hotels and 6000 homes globally. The company’s gross margins improved to ₹2508 crore ($302 million) (up from ₹2,350 crore ($283 million) in FY23). Additionally, operating costs decreased from 19% of gross booking value (GBV) in FY23 to 14% in FY24.
Future Growth
Agarwal expressed optimism about OYO’s future, emphasizing growth not only in India but also in international markets such as the Nordics, Southeast Asia, the USA and the UK. “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,” he stated.
IPO and Refinancing Plans
Considering its improved financial performance, OYO is eyeing a public listing after completing the refinancing of its $450 million Term Loan B (TLB) through the issuance of dollar bonds. JP Morgan is expected to be the lead banker for the refinancing, which is expected to carry an annual interest rate of 9%-10%. This move is expected to save OYO $8 to 10 million in the first year and $15 to 17 million in subsequent years.
