OYO attributed the turnaround to increased booking across key geographies, especially in Europe, and said it was poised to end the March quarter with a surplus cash flow of INR 90 Cr
OYO expects the positive numbers to continue well into Q1 FY24 on the back of unprecedented advance bookings in Europe
This comes nearly a month after Inc42 reported about the company slashing its IPO size to $400 Mn-$600 Mn from its earlier plan of $1.2 Bn
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In what appears to be the result of post-pandemic growth, hospitality giant OYO told its employees in a recent town hall meeting that it turned cash flow positive in the quarter ended March 2023.
The company attributed the turnaround to increased booking across all key geographies, especially in Europe, and said it was well poised to end the quarter with a surplus cash flow of INR 90 Cr, a source told Inc42.
The source added that the company’s homes business in Europe logged ‘unprecedented’ advance bookings for both the upcoming summer season and the off-season period between November and March. As a result, the positive numbers are expected to continue well into the first quarter of the financial year 2023-24 (FY24).
The company purportedly has a cash corpus of nearly INR 2,700 Cr on its balance sheets.
This comes close on the heels of OYO group chief executive officer (CEO) Ritesh Agarwal recently telling employees during a town hall that the hospitality giant achieved its first financial year of adjusted EBITDA profitability in FY23. He also said that the company was well poised to clock an adjusted EBITDA of nearly INR 800 Cr in FY24.
A Turnaround Of Sorts For OYO
The positive numbers come on the back of post-pandemic growth. This has resulted in OYO reviving its public listing plans which have been in limbo for some time owing to regulatory issues as well as volatile market conditions.
After the Securities and Exchange Board of India (SEBI) flagged certain issues and sought updated financials from OYO, the hospitality major again filed its draft red herring prospectus (DRHP) with the market regulator via confidential pre-filing route.
In its refiled DRHP, the company said its revenue grew 24% year-on-year (YoY) and monthly booking value rose 69% in the first half (H1) of FY23.
OYO projects its adjusted EBITDA to grow 3X to nearly INR 185 Cr in the second half of FY23, driven largely by reduction in costs related to operational efficiencies and surge in hotels business. The startup is also eyeing revenue in excess of INR 5,700 Cr in the recently concluded financial year ended March 2023.
However, the company has re-evaluated its IPO plans and slashed the size of the market offering to $400 Mn-$600 Mn.
Initially, it aimed to raise INR 8,430 Cr ($1.2 Bn) through the public issue when it first filed its DRHP in September 2021.
Meanwhile, the hospitality unicorn has also ramped up its expansion plans and aims to double the number of its premium hotel offerings in India in 2023, adding nearly 1,800 hotels in the process. The company also acquired Danish vacation home company Bornholmske Feriehuse in August last year to bolster its European homes business.
OYO is among the hospitality players that have benefitted from the post-pandemic surge. One of the biggest players in the space, OYO plans to leverage its scale to clinch a bigger pie of the Indian hotel booking market, which is projected to zoom to $7.6 Bn by the end of 2023.
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