OYO Retains Profitability In FY25 On Deferred Tax Gain, Changes Corporate Identity

Hospitality major OYO, which is making preparations for filing its DRHP, posted a net profit of INR 244.8 Cr in FY25, up 7% from INR 229.6 Cr in its maiden profitable year in FY24. 

However, OYO’s profitability came on the back of a deferred tax gain of INR 765.6 Cr in FY25. This number stood at INR 51.3 Cr in the previous fiscal.

Excluding this, OYO posted a loss before tax of INR 489.3 Cr in FY25 as against a profit before tax of INR 235.8 Cr in the previous year. 

It is pertinent to mention that founder and chairman Ritesh Agarwal told the company’s employees in May that OYO’s profit grew 172% YoY to INR 623 Cr in FY25, as per unaudited numbers. Agarwal also told employees that the OYO’s EBITDA rose 27% to INR 1,132 Cr in FY25 from INR 889 Cr in the previous year. 

According to OYO’s annual report for FY25, its EBITDA for the year under review grew 22% to INR 1,083.5 Cr from INR 887.8 Cr in FY24

Important to mention that the company also saw its bottom line get impacted by an exceptional item loss of INR 167 Cr in the fiscal. In the prior fiscal, OYO gained INR 409.9 Cr from an exceptional item.

The exceptional item loss included a penalty of INR 116.8 Cr that OYO paid for the prepayment of its $660 Mn term loan B. While the company repaid the entirety of the $660 Mn loan taken in FY22, it took a fresh term loan of $830 Mn and revolving credit facility of $30 Mn from various lenders in FY25.

This loan was taken to finance its $525 Mn acquisition of G6 Hospitality, the parent entity of Motel 6 and Studio 6 brands, back in September.

How Did OYO Generate Revenue? 

The company’s operating revenue registered a 16% growth to INR 6,252.8 Cr in FY25 from INR 5,388.8 Cr in the previous year.

Sale of accommodation services raked in a revenue of INR 3,824.8 Cr, up 11% from INR 3,441.5 Cr in FY24. Booking commissions and royalty income grew 16% YoY to INR 1,562 Cr.

Meanwhile, the food and beverages business witnessed the highest growth, albeit on a negligible base. OYO earned INR 30.3 Cr from the segment as against INR 1.9 Cr in FY24. Rental income zoomed 77% YoY to INR 156.9 Cr. 

Additional operating revenue increased 62% YoY to INR 528.4 Cr during the year under review. It included cleaning and damage cover fee of INR 294.5 Cr and management fee of INR 69 Cr. 

Including other income of INR 73.1 Cr, OYO’s total income rose 14% YoY to INR 6,325.9 Cr in FY25. 

Breaking Down OYO’s Expenses 

In line with the top line, the unicorn’s total expenses jumped 16% to INR 6,659.5 Cr from INR 5,725.8 Cr in FY24. Here’s a detailed breakdown of its spending: 

Operating Expenses: OYO spent INR 3,129.6 Cr on its operations in FY25, up 8% YoY.

The service component of lease accounted for INR 1,426.5 Cr of these expenses, while lease rentals contributed INR 1,325.7 Cr. 

Employee Expenses: The IPO-bound company’s employee costs declined 17% to INR 616.1 Cr from INR 744.4 Cr spent in the previous fiscal. OYO’s salary costs saw a marginal 0.5% decline to INR 529.1 Cr. However, it saw the biggest cut in share based payment expenses, which declined over 74% to INR 47.5 Cr during the year under review from INR 180.6 Cr in FY24.

Commission & Brokerage Fees: The spending under this head grew 12% to INR 738.7 Cr from INR 660.7 Cr in FY24.

Advertising Expenses: OYO spent INR 169.8 Cr on advertising and marketing, a jump of 155% from INR 66.5 Cr in the previous year. 

OYO’s New Corporate Identity 

More than four months after seeking public suggestions, OYO said its new corporate identity would be ‘PRISM Life’. In the annual report, Agarwal said that PRISM would be the parent brand for the company as it looks to expand into new categories.

“The transition to PRISM marks the establishment of a clearer and more future-ready corporate architecture, designed to align the company’s expanding portfolio with its strategic vision. Our OYO brand will continue to serve as the highly recognisable, consumer-facing identity for budget and midscale travel, a space it has defined and clearly marked its solid impression globally,” Agarwal said. 

In line with its bid to expand its business, OYO has also launched a new premium hotels brand, CheckIn Hotels. The brand would house OYO-owned SUNDAY Hotels, Townhouse, DanCenter, and Palette, while OYO and other economy brands will be available on the OYO app.

For this, OYO acquired US-based G6 Hospitality, the parent entity of Motel 6 and Studio 6 brands, from Blackstone Real Estate for $525 Mn during the fiscal year. OYO said that the acquisition is showing early success through “rapid integration and synergies in technology, operations and marketing”.

OYO Expects INR 200 Cr PAT In Q1 FY26 

Agarwal said that OYO has had a strong start to FY26, and as per provisional numbers, it is estimated to post a profit of over INR 200 Cr in Q1 FY26. Revenue is seen rising 47% YoY to INR 2,019 Cr in the first quarter. 

“Additionally, our Gross Booking Value (GBV) reached INR 7,227 Cr, a significant 144% increase year-on-year,” the CEO said. 

Earlier this year, he said that the company was eyeing a net profit of INR 1,100 Cr in the full fiscal year FY26.

OYO expects G6 Hospitality to contribute an EBITDA of INR 630 Cr in the upcoming financial year. This contribution is anticipated to push OYO’s combined EBITDA to over INR 2,000 Cr in FY26.

This comes at a time when OYO is preparing for its third attempt at a public listing. Last month, it was reported that the company is planning to file its draft red herring prospectus (DRHP) in November. It is said to be targeting a valuation of $7 Bn to $8 Bn for its IPO.

Ahead of filing the DRHP, OYO is also planning to issue bonus shares in a 1:1 ratio to its shareholders. This would be one of the items on agenda when the company holds its annual general meeting on September 26, as per a separate regulatory filing.

(Edited by: Vinaykumar Rai)

Note: The story has been edited to include OYO’s exceptional item loss in FY25.