This marks a 25x jump in adjusted EBITDA in financial year 2024 versus the same quarter last year. Oyo had reported its maiden EBITDA positive quarter in an addendum filed with Sebi for its IPO reporting a Rs 7 crore adjusted EBITDA in quarter one of the last financial year.
Oyo has previously defined adjusted EBITDA as EBITDA being adjusted for transformation expenses made on assets of its hotel partners. EBITDA stands for earnings before interest, taxes, depreciation and amortisation and is a measure of a company’s core profitability.
During the town hall presentation, Oyo founder Ritesh Agarwal said the quarter one adjusted EBIDTA of Rs 175 crore makes it an ‘exciting’ start to the year.
“If you annualize this outcome, it sets us up for Rs 700 crore adjusted EBITDA this financial year, though, in all likelihood, and we will achieve or probably surpass our previously stated target of Rs 800 crore. The quarter one adjusted EBITDA of Rs 175 crore is nearly the same as what we achieved in quarter four last year, which is seasonally the strongest quarter,” he added.
He also said that Oyo added over 1,000 hotels and 3,500 homes to its platform just in the first quarter of financial year 2024, and that he is confident that the company can deliver on its target for this year.
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“Our cost rationalisation measures in Europe and busy summer months have positively impacted our EBITDA in the first quarter. This coupled with our increased focus on customer experience and quality improvement measures will drive our growth this year,” he added.During a town hall presentation to employees in March this year, Agarwal had said that he expects the company to clock adjusted EBITDA of nearly Rs 800 crore in financial year 2024. He had also said the company has a current cash balance of Rs 2,700 crore and it hopes to consume very little of it for existing operations
The hospitality chain had reported an adjusted Ebitda of Rs 63 crore in the first half of the last financial year, as per previous filings to Sebi.
In the presentation, the company also said that it is adding ‘high performing’ storefronts in markets such as Bengaluru, Kolkata, Chennai, Gurgaon and that storefront addition and churn prevention is its ‘core focus area.’
In March this year, Oyo refiled its Draft Red Herring Prospectus (DRHP) with the stock market regulator Sebi under the recently introduced confidential pre-filing route.
The company had filed preliminary documents with Sebi in September 2021 for a Rs 8430 crore IPO.
In May, global ratings agency Moody’s (Moody’s Investors Service) shared that it expects Oyo to remain EBITDA positive for financial year 2024.
Moody’s in its report said that Oyo will generate around $50 -$55 million EBITDA, after shared based payment expenses in fiscal 2024, supported by a strong demand recovery in the hospitality business, increase in the number of storefronts on Oyo’s platform, and cost optimisation measures undertaken by the company.