OYO, the renowned travel tech unicorn, has marked a significant milestone by reporting its first full year of profitability in the financial year 2023-24 (FY24), with a net profit of approximately INR 100 Cr. This achievement was proudly announced by the founder and CEO, Ritesh Agarwal.
Financial Success and Stability
Agarwal shared on social media platform X that OYO has maintained a positive trend, registering its eighth consecutive quarter of positive EBITDA in Q4 FY24. He further disclosed that the company’s cash reserves stood strong at around INR 1,000 Cr by the end of the fiscal year. While these figures are provisional estimates, Agarwal assured that the audited numbers will closely align with these projections.
Global Expansion and Recognition
Expressing his optimism, Agarwal emphasized OYO’s growth trajectory not only within India but also in key international markets such as the Scandinavian region, Southeast Asia, the US, and the UK. He highlighted the recent endorsement from global credit firm Fitch, which upgraded OYO’s credit rating due to the company’s enhanced performance and robust cash flows.
Fitch Rating Upgrade
Fitch’s recent upgrade of OYO parent Oravel Stays’ long-term foreign and local currency issuer default ratings from ‘B-‘ to ‘B’, with a ‘stable’ outlook, reflects several positive indicators. These include OYO’s strengthened EBITDA, reduced leverage, sufficient liquidity, and the recovery of demand in the travel and tourism sector across its major markets in FY24.
Strategic Financial Moves
OYO’s latest achievements coincide with strategic financial moves. The company is in the process of refinancing its high-cost Term Loan B through the issuance of fresh dollar bonds, aiming to enhance its financial flexibility. Additionally, reports indicate discussions with family offices to secure funding in the range of $80-90 Mn, valuing the company at $2.3 Bn, reflecting a shift from its previous peak valuation of $10 Bn in 2019.
Diverse Offerings and Expansion Plans
Since its inception in 2012, OYO has diversified its offerings to include vacation homes, casino hotels, coworking spaces, budget hotels, and corporate stays. With nearly $3.5 Bn in funding from prominent investors such as Microsoft, Red Lions Capital, JP Morgan Chase, and Qatar Insurance Company, OYO continues to strengthen its position in the market.
Future Initiatives
Looking ahead, OYO is poised for further growth and innovation. In March, the company announced plans to introduce 13 self-operated hotels under its premium brand ‘Palette’ by the end of 2024, reflecting its commitment to expanding its portfolio and enhancing customer experience.
In conclusion, OYO’s achievement of profitability in FY24 underscores its resilience and adaptability in navigating the challenges of the travel and tourism industry. With a strong financial foundation and strategic initiatives in place, OYO is well-positioned to capitalize on emerging opportunities and drive continued growth in the years to come.
