Hotel giant led by Ritesh Agarwal OYO has reported a net profit of Rs 158 crore for the second quarter ending September 30, 2024 (Q2FY25), PTI reported.
The performance marks a material turnaround from the Rs 50 crore loss recorded during the same quarter last year.
The growth continues the momentum established in the first quarter of FY25, where the Gurugram-based company reported a net profit of 132 crores.
During the first half of FY25, the company’s net profit reached Rs 291 crore, a marked improvement over the net loss of Rs 91 crore it posted during the same period of the previous fiscal year.
Revenue growth and booking volume
The company’s revenue for Q2FY25 stood at Rs 1,578 crore, reflecting an increase of 12% compared to Rs 1,413 crore in the previous quarter.
OYO’s gross booking value (GBV) for the September quarter was Rs 3,243 crore, showing a year-on-year increase of 17%. This increase in bookings has been attributed to the company’s efforts to improve its service offering and serve premium markets.
Premiumization strategy
Oyo’s profitability is largely attributed to its premiumization strategywhich involves the launch of the company’s serviced hotels under various brands including Townhouse, Collection O, Palette and Sunday.
According to founder and CEO Ritesh Agarwal, this focus on high-end hotels operated by the company has played a critical role in increasing both revenue and customer satisfaction.
According to the PTI report, Agarwal emphasized in a recent public meeting with employees that the company intends to maintain this premiumization approach to drive further growth.
Capital investments and market valuation.
Earlier this year, OYO raised Rs 1,457 crore in fresh capital from various investors, including domestic family offices and prominent stock market investors.
This fundraising round valued the company at approximately $2.5 billion, a significant decline from its peak valuation of around $9 billion in 2021.
An entity associated with Agarwal led the round, contributing Rs 830 crore, while additional investments came from notable entities such as the family office of Mankind Pharma promoters, ASK Financial Holdings and J&A Partners.
Expansion through strategic acquisitions
last month, OYO made major acquisition of G6 Hospitalitywhich owns and operates the iconic American hotel chain Motel 6 and Studio 6, in an all-cash deal valued at $525 million (approximately Rs 4,400 crore).
In August 2024, the company also acquired the Paris-based premium home rental company. VerifyMyGuest for Rs 230 crore in a cash and stock deal.
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