OYO told its employees recently that its adjusted EBITDA is expected to rise about 3X to INR 185 Cr during the second half of FY23
The IPO-bound hospitality chain reported an adjusted EBITDA of INR 63 Cr in the first half of FY23
The expected jump in adjusted EBITDA can be attributed to reduction in costs, growth in hotels business, and continued operational profitability: OYO
Oravel Stays Ltd, the parent company of hospitality chain OYO, told its employees during a townhall meeting recently that it is likely to be EBITDA positive for the first time in the ongoing financial year FY23, sources told Inc42.
In a presentation, the IPO-bound startup said that its adjusted EBITDA is expected to rise about 3X during the second half of FY23 to INR 185 Cr compared to the first half of the fiscal, the sources said.
As per its draft red herring prospectus (DRHP) filed with the Securities and Exchange Board of India (SEBI), the traveltech startup’s adjusted EBITDA stood at INR 63 Cr in the first half of FY23.
The expected jump in adjusted EBITDA can be attributed to reduction in costs led by operational efficiencies, growth in hotels business, and continued operational profitability, the company told the employees, as per the sources.
OYO also told the employees that it expects its revenue to rise 15% year-on-year to INR 2,800 Cr during October-March 2022-23 period. However, gross profit margins are expected to remain steady at around 41% during FY23.
Recently, OYO said that it would refile its DRHP with SEBI by the middle of February 2023. The company had earlier indicated that the process of refiling the comprehensive document could take 2-3 months.
OYO’s last submission to SEBI was the updated financial results for the first half of FY23. Following this, the markets regulator asked the startup to refile the DRHP by updating all the relevant sections such as risk factors, KPIs, outstanding litigations, basis for offer, among others.
Founded by Ritesh Agarwal in 2013, OYO is backed by marquee investors such as Masayoshi Son’s SoftBank, Airbnb, Lightspeed Venture Partners, Innoven Capital, and Hero Enterprises.
OYO reported a loss of INR 333 Cr during Q2 FY23, down nearly 20% from INR 414 Cr in Q1 FY23. Its loss also narrowed 22.2% to INR 747.1 Cr in the first half of FY23 from INR 959.8 Cr in the corresponding period of the previous fiscal year.
