OYO to focus on reducing operational inefficiencies, will become EBIDTA positive for the first time in FY23

IPO-bound travel tech company Oravel Stays, the company which owns OYO announced during a town hall recently that it is focusing on reducing operational inefficiencies which will further push the profitability number up. Moreover, they will become adjusted EBITDA positive in this fiscal year for the first time, Ritesh Agarwal, Founder and CEO of the company announced in the same town hall.

According to a presentation viewed by Business Today, the company is expecting to close its adjusted EBITDA (for second half of FY23) at Rs 185 crore, which is a 3x increase from H1 which was closed at Rs 63 crore. In H1 and H2 of FY22, the adjusted EBITDA was negative, standing at minus Rs 300 crore and minus Rs 200 crore, respectively. 

The Gurugram-based company functions across three revenue models - revenues coming from hotels, homes and subscriptions. While the number of homes listed and its subscriptions have increased, number of hotels on the platform has reduced from 17,994 in FY22 to 14,443 in FY23 (approximately). 

The company is aiming to close FY23 with over Rs 6,000 crore, as per rough estimates. 

BT reached out to the company for an official comment but failed to get one. 

BT earlier reported that OYO is all set to refile and submit its Draft Red Herring Prospectus (DRHP) with the stock market regulator Securities and Exchange Board of India (SEBI) by mid-February. The market watchdog wrote back to the company asking it to update additional sections in its DRHP, such as updated risk factors, key performance indicators (KPIs), outstanding litigations, basis for valuation, etc. This was supposed to delay the initial public offering (IPO) by a quarter or so.  
 
After weathering two tough years owing to the COVID-19 pandemic, the company revived its stock market plans last year. In September 2022, the company filed an addendum to its DRHP which revealed its financials for FY20, FY21, and FY22. Recently, the company also announced its financial results for the ongoing fiscal year, which saw the revenues in H1 of FY23 grew 24 per cent to Rs 2,905 crore and losses stood at Rs 333 crore.

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