Oravel Stays Ltd which operates travel tech brand OYO reported that it has doubled its profit after tax (PAT) sequentially in Q3 FY24 to ~INR 30 crore. The company had marked its maiden profitable quarter with a PAT of over ~INR 16 crore in Q2 FY24. OYO’s Founder & CEO, Ritesh Agarwal, during an employee townhall shared the update about this two-fold surge in profit. He said, “In the upcoming quarters, we anticipate a consistent rise in PAT, driven by enhanced patron confidence, improved customer experience (Cx), and favourable market conditions conducive to sustained growth.”
He also shared that the company clocked Adjusted EBITDA of ~INR 750 cr / $90mn in 2023 and expects to clock Adj EBITDA of ~INR 1000 cr / $120 mn in FY24, surpassing its earlier projected Adj EBITDA estimate of INR 800 cr for FY2024.
OYO’s revenue also grew by ~10% Y-o-Y in Q3 FY24. Agarwal also shared that OYO saw a ~27% increase in the number of hotels on its platform to 17K, over the last year. The company optimised its operating cost by 15% in Q3 FY24 vs same period. The company last filed its Annual Accounts for FY2023 and these updates are unaudited.
OYO recently concluded a debt buyback of INR 1620 crores. The back process involved the repurchase of 30% of OYO’s outstanding TLB due June 2026. Sources close to the transaction have indicated that OYO’s decision to retire debt reflects its commitment to reducing financial leverage and underlines the company’s robust financial performance. The company achieved operational profitability in FY2023 with an Adj. EBITDA of ~INR 275 crores, plans to fund future growth and expansion through its earnings.
Global credit rating agencies Fitch & Moody’s have termed OYO’s move to repurchase its outstanding debt as positive. Fitch wrote that this action will improve OYO’s EBITDAleverage and that they may take positive rating action. Moody’s doubled its Adj EBITDA estimate for FY2024 from $50 million (projected in May 2023) to $90- $100 million.
OYO recently announced its expansion plans in major spiritual hotspots across the country, fuelled by a surge in domestic travel and rising interest in spiritual tourism. OYO is gearing up to launch 400 properties in popular destinations like Ayodhya, Puri, Shirdi, Varanasi, Amritsar, Tirupati, Haridwar, Katra-Vaishno Devi, and the Char Dham route by the end of this 2024.