OYO Achieves Milestone with First-Ever Annual Profit of Rs 229 Crore in FY24

On August 14, 2024, OYO achieved a notable financial milestone by reporting its first-ever profit after tax (PAT) of Rs 229 crore for the fiscal year 2024. This impressive result signifies a major turnaround for the travel technology company, highlighting a substantial improvement in its financial health. For years, OYO has been focused on scaling its operations and refining its business model to achieve profitability, and this PAT achievement underscores the success of those efforts.

The company’s ability to reach this financial milestone reflects not only effective cost management and operational efficiency but also a growing market presence and enhanced revenue streams. This development is expected to bolster investor confidence and pave the way for future growth and expansion. OYO’s shift from losses to profitability marks a significant turning point, positioning it as a stronger player in the competitive travel and hospitality sector.

Impressive Growth in Adjusted EBITDA

OYO's positive financial performance is underscored by its remarkable growth in Adjusted EBITDA. For FY24, the company's Adjusted EBITDA surged by an impressive 215 percent, reaching Rs 877 crore compared to Rs 277 crore in the previous year. This substantial increase highlights OYO's effective cost management and operational efficiency over the past eight quarters, each of which contributed to the company’s positive EBITDA streak.

Earnings Per Share (EPS) Improvement

Reflecting the company's improved profitability, OYO's earnings per share (EPS) for FY24 stood at approximately Rs 0.36. This marks a significant recovery from the previous year when the EPS was a loss of Rs 1.93 per share. The turnaround in EPS indicates a strong recovery and better financial health, signaling positive outcomes from the company's strategic initiatives and operational improvements.

Stable Revenue and Reduced Costs

Despite facing a challenging economic environment, OYO managed to maintain stable consolidated revenue, recording Rs 5,388 crore for FY24 compared to Rs 5,463 crore in FY23. This stability in revenue is indicative of the company’s robust business model and market positioning.

Additionally, OYO successfully reduced its total costs by about 13 percent, bringing them down to Rs 4,500 crore. The cost reduction was achieved through a leaner cost structure, including significant cuts in general and administrative expenses and optimized marketing spends, all while sustaining topline growth. This strategic cost management has played a crucial role in enhancing OYO’s profitability.

Expansion into the European Market

As part of its strategic growth plans, OYO is making a notable expansion into Europe. The company is set to acquire a French vacation rental firm to bolster its presence in the region. This acquisition involves issuing nearly 8 million preference shares to buy K&J Consulting, the operator of the Paris-based premium rental service, Checkmyguest Group.

Acquisition Details and Benefits

The acquisition deal includes Studio Prestige, a luxury apartment rental service in Paris, and Helpmyguest, a property design and renovation firm. This strategic move is aimed at acquiring premium rental homes in Paris, one of the world’s most popular tourist destinations. While the deal involves some cash payments, the majority of the acquisition cost will be covered through a share swap, according to an OYO spokesperson.

The spokesperson also noted that the newly acquired assets are expected to start generating revenue swiftly, which will help offset the costs associated with the acquisition. This expansion is anticipated to contribute positively to OYO’s overall revenue and market share in the European market.

Growth in Inventory

In addition to its financial and expansion achievements, OYO's inventory has seen significant growth. The company’s inventory increased from 12,938 properties at the end of FY23 to 18,103 properties by the end of FY24. This growth reflects OYO’s continued efforts to expand its network and offer a broader range of accommodation options to its customers, further solidifying its market position.

Conclusion: OYO’s Positive Trajectory

OYO's financial results for FY24 mark a notable milestone in the company's trajectory, reflecting its substantial progress and strategic prowess. The company has achieved a significant milestone by attaining profitability, demonstrating its capability to effectively manage costs while driving revenue growth. OYO's continued expansion and strategic acquisitions have further strengthened its market position, positioning the company favorably for sustained success in the global arena. The introduction of new technologies and innovative solutions, including advancements in operational efficiency and customer experience, underscores OYO's commitment to maintaining a competitive edge. These achievements highlight OYO’s resilience and adaptability, essential traits in a highly competitive industry. As OYO builds on this strong performance, it lays a robust foundation for future growth, aiming to capitalize on emerging opportunities and navigate potential challenges. The company’s ongoing focus on strategic initiatives and market expansion will be crucial in sustaining its upward trajectory and achieving long-term success.