Even though OYO has a 333 crore net loss, their EBITDA has increased eight times
- ByStartupStory | November 26, 2022
The international travel technology startup OYO today shared its financials with markets regulator SEBI as part of its pledge to amend its Draft Red Herring Prospectus with the financial performance through the first half of fiscal 2022–2023. Prior to reviewing and ultimately processing OYO’s application for a floating public offering, SEBI had previously given the company permission to submit updated financials. This will start the process of getting SEBI to approve the company’s IPO. A 23% monthly increase in gross booking value per hotel during Q2 to roughly $4 lakh was the main factor in the company’s adjusted EBITDA growing eight times from $7 crore in Q1 to 56 crore.
The company was not net profitable despite the significant increase in EBIDTA. Even though it has decreased from the 414 crore reported in the first quarter of 2022–2023, the company reported a net loss of 333 crore. Additionally, revenues in the first half of FY23 increased by 24% year over year to $2,905 crore. In the most recent half-year report, the adjusted EBITDA increased from a loss of 280 crore in the first half of financial year 22 to a profit of 63 crore. In addition to enhancing operating efficiency, the corporation has $2,785 crore in cash on hand. The strongest component of the performance is the monthly income per hotel, or gross booking value (GBV) per hotel each month. To reach 3.48 lakh, it gained 69% year over year.
In H1 2022–23, the total GBV increased by 33% to 5,028 crore. As travel returns, improved occupancy and higher average room rents are to blame for the monthly increase in GBV per hotel. Only a 4% increase in gross rentals was seen for OYO’s European Houses Division, which remained stable. The hospitality industry also began to be impacted by the high inflation rate. As the number of vacation homes on its platform has continued to rise, the company is probably betting on the upcoming summer season in Europe. For H1 FY23, marketing expenses accounted for 14% of revenues, employee expenses net of share-based payment charges represented 18% of revenues, and general and administrative expenses accounted for 7% of revenues.
The company appears to be at a turning point in its journey, given the decline in losses and ongoing operating profitability. The main thing to watch is whether or not investors will continue to value hospitality stocks at the strong levels they have been receiving recently, or if they will allow other start-up stocks like PayTM and Nykaa to drag down their stock prices.
OYO initially submitted its draft red herring prospectus (DRHP) to the market regulator in October last year in preparation for its about USD 1.2 billion initial public offering. The proceeds from the public issues will be used for general corporate purposes, including funding organic and inorganic growth initiatives, prepayment or partial repayment of certain borrowings obtained by its subsidiaries, and other purposes specified in the then-DRHP document. One of India’s unicorn companies, OYO, was founded in 2012 by young businessman Ritesh Agarwal. It is a prominent new-age technology platform that supports the extensive global hospitality ecosystem. (ANI)
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