Global hospitality unicorn OYO has reported a 21 per cent jump in revenue from operations in FY22 and an EBITDA positive Q1 FY23, according to the addendum to its draft red herring prospectus (DRHP) filed with SEBI on September 19.
Although the company’s ₹4,781 crore revenue in FY22 is an increase over its FY21 revenue, it is still lower than the ₹13,168 crore recorded in FY20. In Q1 FY23, the company’s revenue was reported as ₹1,459 crore.
According to sources close to the company, who spoke to BusinessLine on the condition of anonymity, OYO plans to launch its IPO by December 2022 or January 2023, depending on the company’s financial performance.
“The motive behind filing an addendum was to let the world know that OYO is EBITDA positive and the path to profitability is there. The upcoming quarter is also expected to be EBITDA positive for OYO,” the source added.
OYO has reported ₹7 crore adjusted EBITDA in Q1 FY23, where adjusted EBITDA does not include ESOP grant expenses. The company’s EBITDA margins have risen to 0.5 per cent in Q1 FY23 from -9.9 per cent in FY22, -44 per cent in FY21, and -62.9 per cent in FY20.
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Further, the company’s marketing and promotional expenses have increased by 27 per cent to ₹692 crore in FY22 as compared to ₹543 crore in FY21.
However, these expenses are significantly lower than nearly ₹1,880 crore spent on marketing and promotions in FY20. In Q1 FY23, this number stood at ₹209 crore.
Overall, the total operational costs as per their reported financials were ₹6,984 crore in FY22 as against ₹6,937 crore in FY21.
General & Administrative (G&A) expenses reduced by 44.4 per cent from ₹927 crore in FY21 to ₹515 crore in FY22.
The employee expenses, net of ESOP based compensation, also reduced by 26.5 per cent to ₹1,117 crore in FY22 from ₹1,520 crore in FY21.
The company’s monthly gross bookings value per hotel shows a 47 per cent growth in Q1 FY23 to ₹3.25 lakh as compared to ₹2.21 lakh for FY22. The filing attributes this to the recovery in travel demand due to the easing of travel and domestic movement restrictions in the markets where it operates.
The company also saw growth in storefronts to 1.68 lakh at the end of Q1 FY23 from 1.57 lakh at the end of FY21. This includes both organic and inorganic growth in storefronts across geographies.
An indicator of unit economies, the company’s Adjusted Gross Profit Margin has seen a steady uptick from 33.2 per cent in FY21 to 40.1 per cent in FY22 to 41.3 per cent in Q1 FY23.
Amid the ongoing funding crunch and market downturn, start-ups across the world are focusing on reducing costs and becoming profitable. In 2022, majors like Byju’s, Unacademy, and Flipkart have rationalised costs and intensified focus on profitability.