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IPO-bound OYO posts 8x jump in EBITDA in Q2, trims losses

Ahead of IPO, hospitality major OYO has reported a net loss of ₹333 crore in Q2 FY23, even as its adjusted EBITDA grew eight times over Q1 to ₹56 crore, according to the company’s second addendum to DRHP filed with SEBI on November 26.

SEBI had given OYO permission to submit updated financial performance till the first half of FY23 before it examined and processed the company’s IPO application which was submitted in 2021. This addendum sets in motion the process of SEBI approval of OYO IPO.

The company’s revenue during Q2 FY23 was ₹1,445 crore compared with ₹1,459.3 crore reported in Q1 FY23. Overall, the company’s revenue for H1 FY23 was ₹2,905 crore (₹2,336 crore). OYO’s net loss reduced from ₹414 crore in Q1 FY23 to ₹333 crore in Q2. 

Further, OYO’s monthly revenue per hotel or Gross Booking Value (GBV) per hotel per month has increased by 69 per cent year-on-year to ₹3.48 lakh. According to a source aware of the development, “the monthly increase in GBV per hotel is due to improved occupancy and higher average room rents as travel returns.”

Dip in storefronts

While the overall number of storefronts was at a similar level as reported on June 30, the latest filing noted a decrease in hotels compared with last year. Storefronts are the number of hotels, homes, and listings available for booking by customers on OYO.

“The decrease in the number of storefronts for our hotels business from 17,994 storefronts as of March 31, 2022 to 12,546 storefronts as of September 30, 2022, was largely due to measures that we took to improve our GBV per storefront per month, including temporary pausing operations for storefronts that were operating at subpar GBV per storefront per month levels and delivering an unsatisfactory customer experience,” the company said in the addendum.

Despite the drop in hotels count, gross booking value for the hotels business grew by 44 per cent YoY to ₹3,006 crore in H1 FY23.

Employee expenses net of share-based payment expenses were the largest cost component making 18 per cent of the revenues, followed by marketing expenses amounting to 14 per cent and general and admin expenses at 7 per cent of the revenues for H1 FY23. 

While the company did not comment on its IPO timeline, a source close to the company said, “the company will need to show another quarter of growing EBITDA for the market to start judging if this performance trajectory is sustainable. This will be the most important parameter if the company does decide to launch its IPO in the first quarter of 2023. The overall market will also need to be conducive towards growth stocks which seem to be out of favour currently.”

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