Oravel Stays, which operates the travel tech brand OYO, has claimed it is on the verge of reporting its first-ever profit after tax (PAT) in the ongoing quarter.

In an internal email to the employees, founder Ritesh Agarwal shared that Q2 FY24 will mark OYO’s maiden profitable quarter with a projected PAT of over ₹16 crore. It was reviewed by businessline.

“As per the current trajectory in this quarter, Q2 FY24 will mark our maiden profitable quarter with a projected profit after tax (PAT) of over ₹16 crore,” said Agarwal in the email.

In a town hall earlier this year, he shared that OYO expects to clock an adjusted EBITDA of nearly ₹800 cr in FY24.

He said that OYO has also published its annual accounts for FY23 and it had achieved operational profitability in FY23, clocking an adjusted EBITDA of ₹277 crores. In the Annual Report, Agarwal attributed this achievement to OYO’s focus on core markets, centralisation of key functions, cost optimisation initiatives, divestment, and rationalisation of non-core businesses.

The company’s revenue from operations in FY23 was up 14 per cent to ₹5,463 crore in FY23 up from ₹4,781 crore in FY22. It also narrowed its losses to ₹1,286 crore.

The adjusted gross profit margin rose to 43 per cent of revenue and the adjusted gross profit increased by 23 per cent to ₹2,347 crore in FY23 from ₹1,915 crore in FY22.

The company reduced the number of hotels in FY23 to 12,938 from 18,037 in FY22.

“Our intent is to expand the hotel network again since the process of pruning the ones which were incompatible with our tech enabled, monthly revenue optimisation operating model,” Agarwal stated in the email.

“This being said, as of June 2023, we still have the largest footprint in terms of hotels in India and Southeast Asia, as compared to other full stack short-stay accommodation players,” he added.

As per the email, the overall gross booking value (GBV) increased by 25 per cent reaching ₹10,000 crore, of which GBV from the hotels business, stood at ₹6,172 crore, marking a year-on-year growth of 35%.

GBV per storefront on hotels clocked a growth of 82 per cent to ₹3,99,000 in FY23 from ₹2,19,000.

OYO app is the fourth most downloaded travel app globally (as of July 2023) and the most downloaded travel app in ‘key’ Asian markets.

The loyalty programme OYO Wizard retains its position as the ‘largest loyalty programme’ among travel brands with over 13.5 million members, as of June 2023.

He also wrote about some ‘key’ priorities of the company. “We have started thinking of shifting our mindset from offering value first to offering an experience first for our customers,” Agarwal wrote in the email to the leadership team.