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During the financial year 2023-24 (FY24), hospitality major Oyo reported its first-ever profit after tax (PAT) of Rs 229 crore, according to the company's annual report.
This comes on the back of eight consecutive quarters of positive-adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda).
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The company's adjusted Ebitda grew by 215 per cent to Rs 877 crore during the year from Rs 277 crore in FY23.
Revenue for FY24 came in at Rs 5,388 crore, a decline of 1.37 per cent from Rs 5,463 crore during FY23.
The company’s reported profits in FY24 are significantly higher than chief executive officer (CEO) Ritesh Agarwal’s previous estimates of Rs 100 crore, which Business Standard had reported in May.
“One big learning for me over the years is under promise and over deliver. Our audited results are published post adoption by the board. The effort of Oyo-preneurs has delivered Rs 229 crore in net profit, exceeding my earlier estimate of Rs 100 crore…Lots of improvements left to do. Proud of what we are building together,” said Agarwal, in a post on X on Wednesday.
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Oyo's earnings per share (EPS) stood at around Rs 0.36 in FY24, up from a loss per share of Rs 1.93 in FY23.
The company’s total costs decreased by about 13 per cent to Rs 4,500 crore in FY24 from Rs 5,207 crore in FY23.
This was attributed to a leaner cost structure, “by reduction of general and administrative spend and optimising marketing spends while maintaining top-line growth,” the company’s annual report said.
Oyo added several hotels in FY24, on the back of sound business performance, an increase in demand and improved market sentiment. As a result, its inventory grew from 12,938 as in FY23 to 18,103 in FY24.
“The new additions will require time to achieve full revenue potential, with financial returns expected to become evident, going forward. Hence, the company’s consolidated revenue from operations remained stable at Rs 5,388 crore against Rs 5,463 crore during the financial year 2022-23,” the report read.
This comes days after Agarwal invested Rs 830 crore in the company through his wholly-owned entity, Patient Capital, bringing Oyo’s total funding for the latest round to Rs 1,457 crore at a $2.4 billion valuation.
As a result, the CEO’s stake in the company rose from 29.97 per cent to 32.57 per cent. Other than its India business, Oyo has seen growth across Europe, the US, Southeast Asia and the Middle East.
“Europe, being the largest market for vacation rentals, presents a significant opportunity for Oyo's homes business, OVH,” the company said.
The company is, hence, issuing 79.2 million ‘Series G Fully and Compulsory Convertible Cumulative Preference Shares’ for the acquisition of K&J Consulting, which operates premium rental homes’ company Checkmyguest group from Paris.
“Checkmyguest has a dense presence in Paris, which is one of the most-visited cities in the world. Oyo gets to acquire premium homes inventory primarily through a share swap over a period of time, in addition to some cash outgo for the acquisition. This gets quickly offset since it's a cash generating business,” said an Oyo spokesperson.
In addition, Checkmyguest’s two affiliated companies Studio Prestige, a Paris-based luxury apartment rental service, and Helpmyguest, a property design and renovation company, are a part of the deal. This will provide them with the ability of upgrading or transforming the home interiors for “a more premium appeal.”
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