Oravel Stays, the operator of the global hospitality giant OYO, has reported its first net first net profitable year in FY24 (FY24), with a profit after tax (PAT) of nearly Rs 100 crore.

This milestone marks the company's eighth consecutive EBITDA (earnings before interest, taxes, depreciation, and amortisation) positive quarter, highlighting a period of financial stability and growth.

Ritesh Agarwal, the founder of OYO, expressed his gratitude for this achievement in a post on the social media platform X. He said, “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 crores. This was our eighth consecutive quarter of a positive EBITDA and we also have a cash balance of about Rs 1000 crores.”

According to some sources familiar with the matter, Agarwal announced OYO’s maiden net profitable year during a town hall meeting, posting a PAT of Rs 99.6 crore ($12 million) in FY24. However, OYO declined to comment officially on the matter.

OYO Achieves Milestone: Records First Net Profitable Year in FY24

Additionally, global rating agency Fitch recently upgraded OYO’s long-term foreign- and local currency issuer default rating to ‘B’ from ‘B-’. The agency upgraded OYO’s senior secured term loan facility to ‘B’ from ‘B-‘, due to the company's improving financial profile, by sustained EBITDA growth and a recent $195-million debt buyback.

Agarwal highlighted this achievement in his social media post, stating, “The global credit rating firm Fitch has also taken note of our improved performance and strong cash flows, upgrading our credit rating. I see growth ahead not just in India with emerging travel trends such as premiumisation, spiritual travel, business travel and conferences, destination weddings but also in our other key markets of Nordics, South East Asia, US and UK. FY25 will clearly be even more exciting.”

Despite these developments, OYO has faced significant challenges. Oravel Stays Ltd, the parent company of OYO, has withdrawn its draft red herring prospectus (DRHP) from the Securities and Exchange Board of India (Sebi), with plans to refile after refinancing its $450 million loan. The company aims to refile paper for its initial public offering (IPO) once the refinancing is complete, which is expected by the next quarter. The refinancing will be conducted through the sale of dollar bonds, with JP Morgan likely to be the lead banker, and the estimated interest rate for these bonds is reported to be 9-10% per annum.

first net profitable year in FY24
Image Source: Tripadvisor

During the town hall, Agarwal mentioned that OYO recorded an EBITDA of Rs 888 crore ($107 million) for the full fiscal year, up from Rs 274 crore ($33 million) in FY23. The company added about 5,000 hotels and 6,000 homes globally in FY24. The gross booking value (GBV) per storefront per month for hotels was at Rs 3.32 lakh ($4,000), showcasing the company’s performance in the hospitality sector.
OYO’s gross margins improved in FY24, reaching Rs 2,508 crore ($302 million), up from Rs 2,350 crore ($283 million) in FY23. The company also managed to reduce its operating costs, which decreased from 19% of GBV in FY23 to 14% of GBV in FY24. These improvements underscore OYO's effective cost management and operational efficiency.

This comes at a time when the travel and hospitality industry is witnessing a rise, with emerging trends such as premium-isation, spiritual travel, business travel, conferences, and destination weddings driving growth. OYO’s expansion in international markets, in the Nordics, Southeast Asia, the US, and the UK, lays down a path for the company success.

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