OYO Turns Profitable With INR 229 Cr PAT In FY24 As Employee Costs Halve

IPO-bound OYO turned profitable in the financial year 2023-24 (FY24) as it managed to control its expenses by trimming its employee costs. The unicorn posted a net profit of INR 229.5 Cr during the year as against a net loss of INR 1,286.5 Cr in the previous financial year. OYO announced last month that it became profitable in FY24.

However, its operating revenue remained almost flat during the year under review. Revenue from operations stood at INR 5,388.7 Cr in FY24, a decline of 1.3% from INR 5,463.9 Cr in the previous fiscal year, as per its filings with the Ministry of Corporate Affairs.

Last month, the startup said that while its hotel count grew to 18,103 at the end of FY24 from 12,938 hotels a year ago, the new hotels will take time to achieve their full potential.

Including other income, OYO’s total revenue declined 1% to INR 5,541.5 Cr from INR 5,601.7 Cr in FY23. 

Founded in 2012 by Ritesh Agarwal, OYO is a hospitality startup and claims to offer over 40 integrated products and solutions to patrons who operate more than 157K hotels and home storefronts in more than 35 countries, including India, Europe, and Southeast Asia.

Where Did OYO Spend?

The startup managed to reduce its total expenditure by 16% to INR 5,725.7 Cr in FY24 from INR 6,799.6 Cr in the previous fiscal year. 

Lease Costs: OYO’s biggest expenditure was its lease costs, which accounted for 46% of the overall costs. This expense included service lease component and lease rentals. However, lease costs dropped 8% to INR 2,629.5 Cr from INR 2,843.3 Cr in FY23.  

Employee Costs: The primary reason behind the decline in total expenditure was the reduction in employee costs. Employee benefit expenses fell 52% to INR 744.3 Cr in FY24 from INR 1,548.8 Cr in the previous fiscal year. This decline was due to a 71.3% fall in employee share based expenses to INR 180.6 Cr in FY24 from INR 630.3 Cr in the previous fiscal year.

Finance Costs: OYO’s finance cost rose 24% to INR 843.8 Cr during the year under review from INR 681.5 Cr in the previous fiscal year. 

Last month, Agarwal said OYO is looking to triple its profit after tax (PAT) to INR 700 Cr in FY25. 

Recently, OYO raised INR 1,457 Cr (around $175 Mn) in a down round led by Agarwal floated Singapore-based entity Patient Capital, along with J&A Partners and ASK Financial Holdings.

The latest funding saw OYO’s valuation fall to $2.37 Bn from $10 Bn at its peak in 2019. The round also included July’s INR 417 Cr investment from InCred in OYO. 

While OYO has been eyeing a public market listing for some time, its IPO has been deferred a couple of times now. Sources told Inc42 that the plans are likely to be pushed back further as the company awaits the terms of the refinancing deal for the $660 Mn Term Loan B availed by founder and CEO Agarwal to buy back shares from investors in 2019. 

As it prepares for its public listing, here’s a deeper look at the executives responsible for the startup’s growth.