OYO reports first-ever net profit of Rs 229 crore in FY24; CEO says 'improvements still left to do'

Ritesh Agarwal-led traveltech giant OYO has reported its first-ever 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 recorded a loss of Rs 1,286 crore.

The positive shift was driven by stringent cost-cutting measures and a notable Rs 453 crore boost from exceptional items, which included a Rs 240 crore gain from acquiring OYO Hotels Cayman and a Rs 249 crore reversal of financial liability. 

CEO Ritesh Aggarwal shares a post on X

Announcing the development on X (formerly Twitter), Aggarwal said, "One big learning for me over the years is under promise and over deliver. Our audited results are published post adoption by board. The effort of OYOpreneurs has delivered INR 229 cr net profit, exceeding my earlier estimate of INR 100cr."

"Now with Rs 0.36 EPS done, now to Rs 1 EPS and beyond at FY25. There are still lots of improvements to be made. Proud of what we are building together," Aggarwal added.

One big learning for me over the years is under promise and over deliver.

Our audited results are published post adoption by board. The effort of OYOpreneurs has delivered INR 229 cr net profit, exceeding my earlier estimate of INR 100cr. Now with Rs 0.36 EPS done, now to Rs 1… https://t.co/xoLO8Ir01n

— Ritesh Agarwal (@riteshagar) August 14, 2024

Eight quarters of positive adjusted EBITDA

The profit announcement follows eight consecutive quarters of positive Adjusted EBITDA, which saw a 215% growth to Rs 877 crore in FY24, up 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 down from Rs 5,463 crore in the previous year.

Cost reduction strategies

OYO also reduced its total costs by 13% to Rs 4,500 crore in FY24. This was achieved through a leaner cost structure, which included reductions in general and administrative expenses as well as optimized marketing spends.

Salaries and employee benefits saw a significant decrease of nearly 52%, dropping 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 Checkmyguest Group in a cash and stock deal. 

The acquisition, which includes Studio Prestige and Helpmyguest, is aimed at bolstering OYO's presence in Europe, particularly in the premium rental homes market.

According to a company spokesperson, the newly acquired assets are expected to start generating revenue quickly, helping to offset the costs associated with the acquisition. OYO's inventory also grew from 12,938 at the end of FY23 to 18,103 by the end of FY24.