The travel technology giant led by Ritesh Agarwal OYO has reported its first profit after tax (PAT) of Rs 229 crore for the financial year 2024 (FY24).
This marks a significant turnaround from the previous year, when the company posted a loss of Rs 1,286 crore.
The positive turnaround was driven by strict cost-cutting measures and a notable Rs 453 crore increase in exceptional items, which included a Rs 240 crore gain on the acquisition of OYO Hotels Cayman and a Rs 249 crore reversal of financial liabilities.
CEO Ritesh Aggarwal shares a post on X
Announcing development in unknown (formerly Twitter), Aggarwal said, “One of the biggest learnings I have learnt over the years is to under promise and over deliver. Our audited results are published post board adoption. The OYOpreneurs effort has generated a net profit of INR 229 million, which is above my earlier estimate of INR 100 million.”
“Now that we have achieved an EPS of Rs 0.36, we will reach an EPS of Rs 1 and above by FY25. There is still a lot of improvement to be done. I am proud of what we are building together,” Aggarwal added.
One of the great lessons I’ve learned over the years is to under-promise and over-deliver.
Our audited results are published after the adoption by the board of directors. The OYOpreneurs effort has generated a net profit of Rs 229 crore, which is higher than my earlier estimate of Rs 100 crore. Now, with a realized EPS of Rs 0.36, we are now at Rs 1 crore… https://t.co/xoLO8Ir01n— Ritesh Agarwal (@riteshagar) August 14, 2024
Eight quarters of positive adjusted EBITDA
The earnings announcement follows eight consecutive quarters of positive Adjusted EBITDA, which saw a 215% growth to Rs 877 crore in FY24, from Rs 277 crore in the previous year.
The company’s earnings per share (EPS) also reflected this improvement, rising to Rs 0.36 in FY24 from a loss per share of Rs 1.93 in FY23.
Consolidated revenue remained stable at Rs 5,388 crore, slightly lower than Rs 5,463 crore a year ago.
Cost reduction strategies
OYO also reduced its total costs by 13% to Rs 4,500 crore in FY24. This was achieved through a more efficient cost structure, which included reductions in general and administrative expenses as well as optimized marketing spend.
Employee salaries and benefits saw a significant decline of nearly 52%, falling to Rs 744 crore, primarily due to a reduction in ESOP costs.
Global expansion and acquisitions
As part of its global expansion strategy, OYO recently acquired the Paris-based company Check out my guest Group in cash and stock deal.
The acquisition, which includes Studio Prestige and Helpmyguest, aims to strengthen OYO’s presence in Europe, particularly in the premium rental housing market.
According to a company spokesperson, the newly acquired assets are expected to start generating revenue quickly, which will help offset the costs associated with the acquisition. OYO’s inventory also increased from 12,938 at the end of fiscal 2023 to 18,103 at the end of fiscal 2024.
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