NewsOYO's Profit Skyrockets to INR 30 Cr

OYO’s Profit Skyrockets to INR 30 Cr

KUALA LUMPUR, February 13, 2024 – Oravel Stays Ltd, the company behind the travel technology brand OYO, has announced a significant increase in its profit after tax (PAT) for the third quarter of fiscal year 2024, reaching approximately INR 30 crore. This marks a doubling of its PAT from the previous quarter, where it reported over INR 16 crore. Founder and CEO of OYO, Ritesh Agarwal, expressed optimism about the future, projecting a consistent growth in PAT in the upcoming quarters. This growth is expected to be driven by a boost in customer confidence, enhanced customer experience, and favorable market conditions conducive to sustained expansion.

Revenue for OYO also experienced a year-on-year growth of around 10% in Q3 FY24. Additionally, the number of hotels on OYO’s platform increased by approximately 27% to 17,000 over the past year. The company also managed to optimize its operating costs by 15% in Q3 FY24 compared to the same period, showcasing efficiency in management.

OYO recently completed a debt buyback of INR 1620 crores, involving the repurchase of 30% of its outstanding Term Loan B (TLB) due in June 2026. This move reflects OYO’s commitment to reducing financial leverage and highlights the company’s strong financial performance. With operational profitability achieved in FY2023 and an Adjusted EBITDA of around INR 275 crores, OYO aims to fund its future growth and expansion through its earnings.

Global credit rating agencies Fitch and Moody’s have reacted positively to OYO’s debt repurchase, with Fitch stating that it will improve OYO’s EBITDA leverage and may result in a positive rating action. Moody’s has also revised its Adj EBITDA estimate for FY2024 from $50 million to a range between $90-100 million, indicating confidence in OYO’s financial outlook.

In line with its growth strategy, OYO has announced plans to expand into major spiritual destinations across the country to capitalize on the increasing interest in spiritual tourism and domestic travel. The company intends to launch 400 properties in popular locations such as Ayodhya, Puri, Shirdi, Varanasi, Amritsar, Tirupati, Haridwar, Katra-Vaishno Devi, and the Char Dham route by the end of 2024.

###Financial Performance and Growth

OYO’s financial performance has seen a significant boost, with a two-fold increase in profit after tax in Q3 FY24, reaching approximately INR 30 crore. The company’s revenue also showed a healthy growth of around 10% year-on-year, reflecting a positive trend in its operations. OYO’s strategic focus on enhancing customer experience and optimizing operating costs has resulted in improved efficiency and profitability.

###Debt Management and Market Response

The recent debt buyback by OYO, amounting to INR 1620 crores, has garnered positive reactions from global credit rating agencies such as Fitch and Moody’s. This move is seen as a step towards reducing financial leverage and strengthening OYO’s financial position. Moody’s revised estimate for OYO’s Adjusted EBITDA for FY2024 further indicates confidence in the company’s ability to manage its debt and drive growth through operational profitability.

###Expansion into Spiritual Tourism

OYO’s expansion plans into major spiritual hotspots across India align with the growing trend of spiritual tourism and domestic travel. By launching 400 properties in popular spiritual destinations, OYO aims to tap into this market segment and cater to the increasing demand for unique travel experiences. This strategic move reflects OYO’s commitment to diversifying its offerings and capturing new customer segments.

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