OYO achieves first-ever annual profit of Rs 229 Crore in FY24
Travel technology firm OYO has announced its first-ever annual profit, recording a profit after tax (PAT) of Rs 229 crore for the fiscal year 2024. This marks a significant turnaround from the Rs 1,286 crore loss reported in FY23, according to a recent company filing.
OYO's revenue remained relatively stable at Rs. 5,388 crore, a slight decrease from Rs 5,463 crore the previous year. Despite the dip in revenue, OYO's cost-cutting measures and exceptional items played a crucial role in the turnaround. Notably, the company benefitted from a Rs 453 crore boost through various exceptional items, including a Rs 240 crore fair value gain from the acquisition of Oyo Hotels Cayman and a Rs 249 crore reversal of financial liabilities.
OYO's financial improvements were underscored by a substantial 215 percent increase in Adjusted EBITDA, which soared to Rs 877 crore in FY24 from Rs 277 crore the year before. The company's earnings per share (EPS) also rose to Rs 0.36 in FY24 against a loss per share of Rs 1.93 in the previous year.
The company also reported a 13 percent reduction in total costs, bringing them down to Rs 4,500 crore. This reduction was achieved through a leaner cost structure, including cuts in general and administrative expenses and optimized marketing spend, while still maintaining revenue growth.
Salaries and employee benefits saw a nearly 52 percent decrease to Rs 744 crore, largely due to a reduction in employee stock option plan (ESOP) costs, which dropped from Rs 363 crore to Rs 107 crore, according to TheKredible data. Additionally, OYO incurred Rs 844 crore in interest payments on a $660 million term loan secured in 2022.
In a bid to expand its European presence, OYO is acquiring K&J Consulting, a French vacation rental company operating the premium rental service Checkmyguest Group. The acquisition includes Studio Prestige, a luxury apartment rental service in Paris, and Helpmyguest, a property design an renovation firm. The deal will involve issuing nearly 8 million preference shares, with the majority of the transaction being conducted through a share swap. This strategic move aims to enhance OYO's market presence in Paris - one of the world's top tourist destinations.
OYO's inventory also saw significant growth, increasing from 12,938 at the end of FY23 to 18,103 by the end of FY24.
The announcement follows a recent investment of Rs 830 crore from OYO founder Ritesh Agarwal, through his wholly owned entity, Patient Capital. This investment boosts the total funding for the latest Series G round to Rs 1,457 crore. Despite this influx, OYO's valuation has dropped to $2.4 billion from its peak of $10 billion in 2019.
This development comes amid OYO's withdrawal of its draft red herring prospectus for an initial public offering (IPO) for the second time this year. Originally filed in 2021, the IPO aimed to raise approximately $1.2 billion at a valuation of $12 billion.
OYO's financial turnaround turnaround and strategic moves signal a new chapter for the company as it navigates its expansion and restructuring efforts.
