Oyo Posts Full Year Profit For The First Time Ever

Budget hotel aggregator Oyo has reported its first full-year net profit in its 12 years history. The news comes as a second shot in the arm for the hospitality tech platform following a vote of confidence from Fitch as the hospitality chain rides a resurgence in domestic and international travel.

The net profit news comes weeks after Oyo withdrew its draft red herring prospectus (DRHP) for an evenutal IPO. For the financial year 2023-24, Oyo made a profit after tax of nearly ₹100 crore. The copany had reported a loss of ₹1,286.5 crore for FY23. Oyo, owned by Oravel Stays Pvt. Ltd, is yet to officially file its results for FY24 and the March quarter.

Earlier this week, ratings firm Fitch upgraded its long-term foreign and local currency issuer default ratings for the SoftBank-backed Oyo to ‘B’ from ‘B-’, with a ‘stable’ outlook.

What Oyo Said

Oyo’s founder Ritesh Agarwal took to social media platform X and said that “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 of Nordics, South East Asia, US and UK,” Agarwal, who’s the group chief executive, said in a post on X on Thursday, signalling optimism for continuing growth in the ongoing financial year as well.

Better Cash Flows

Even better for Oyo was that it posted its eighth consecutive quarter of positive EBITDA in the three months ended March period, Agarwal said on X, without disclosing the numbers. The company has a cash balance amounting to ₹1,000 crore, Agarwal added, stating that while the numbers are provisional the audited financials are likely to be close to these figures.

Fitch has also upgraded its rating on Oyo’s $660 million senior secured term loan facility, with an outstanding $448 million due in 2026, to ‘B’ from ‘B-’, citing the company’s improving financial profile, driven by EBITDA growth and a recent $195 million debt buyback.

The term loan facility was issued by Oyo’s fully owned subsidiary, Oravel Stays Singapore.

“The global credit rating firm Fitch has also taken note of our improved performance and strong cash flows, upgrading our credit rating,” Agarwal said in his post.