Oravel subsidiary Oyo Hotels and Homes reports decline in revenue in FY24
Oyo Hotels and Homes Pvt. Ltd reported a sharp decline in revenue in FY24 which fell by 15% from ₹1,312 crore to ₹1,113 crore for the fiscal year. As per information filed this week, with the Registrar of Companies, the company reported a profit of ₹11.5 crore over a loss of ₹27 crore in FY23, owing primarily to a reduction in total expenses by ₹6 crore and a positive growth in exceptional items from a loss the year before.
Its exceptional items included severance and employee related costs were reversed. It also had an adjustment of share based payment expenses or adjusting costs for stock options given to employees and a reversal of a legal provision which may not have occurred.
According to its financial report accessed through business intelligence platform, Tofler, from 2020 to now, the company has grown in net profit from FY20 from a loss of ₹309 crore in that year to ₹11.4 crore of net profit in FY24. But its operating revenue has also slipped dramatically, falling almost 80% in the last four fiscal years from FY20 when it was ₹5,538 crore to ₹1,113.8 crore in FY24.
Navigating challenges
Oyo Hotels—a wholly-owned subsidiary of Oravel Stays Ltd—is in the business of marketing, managing and operating hotels as well as long term and short term stay homes, guest houses and other accommodations. It provides technical know-how and training in the field of operations and management of hotels, motels, etc. and markets and manages these properties.
Last week, the company drew a lot of social media attention when it altered its hotel policy in Uttar Pradesh to exclude unmarried couples from using its rooms. The new check-in policy instituted in Meerut now disallows any couples from checking in unless they were able to prove they were married. It has also told its hotel and motel partners they may decline any bookings if their guidelines were not followed. In the same week, Oravel’s board authorised the issuance of 12,91,07,982 equity shares at a price of ₹42.6 per share, to raise ₹550 crore (around $65 million), as per a regulatory filing obtained from the Registrar of Companies to raise funds led by its founder Ritesh Agarwal’s other business, Redsprig Innovation Partners.
Oyo has withdrawn its initial public offering (IPO) plans twice in the last two years. In May 2024, on technical grounds, it decided to withdraw its IPO plans in order to refinance its $450 million term loan at a lower interest rate. This move would save the company between $8-10 million in interest expenses in the first year.
