Oyo Rooms might’ve seen its valuation slashed by 75 percent this week, but it’s reached a milestone that’s taken it eleven long years to achieve.
Oyo Rooms has reported a PAT (Profit After Tax) of Rs. 229 crore in FY24. The company had said a few months ago that it would report a profit of Rs. 100 crore in FY24, but was waiting for the official numbers. The official numbers seem to have come in higher than expected, with a Rs. 229 crore profit for the company.
Oyo’s consolidated revenue, however, was down slightly from Rs. 5,463 crore in FY23 to Rs. 5,388 crore in FY24. Its total costs decreased by 13 percent, which included a 52 percent reduction in salary costs, mainly driven by a lowering of ESOP costs, which fell by more than 60 percent. Oyo said its costs were down through “reduction in general and administrative spend and optimising marketing spends while maintaining topline growth”.
The profit is a turnaround for Oyo, which had reported a loss of Rs. 1,286 crore in FY23, and a loss of Rs. 1,941 crore in FY22. Oyo had reported losses for every single year starting from when it was founded in 2013.
But there are some caveats with Oyo’s latest results — Oyo Rooms reported a Rs. 453 crore of gain from exceptional items in FY24, including a Rs. 240 crore fair value gain from acquiring Oyo Hotels Cayman, and a Rs. 249 crore reversal of financial liability. Without these exceptional items, Oyo Rooms would’ve still reported a loss this financial year.
These results have been announced days after it had been reported that Oyo had raised funds at a valuation of $2.4 billion, down from a peak valuation of $10 billion it had attained in 2019. The funding round was worth $173 million, and interestingly, was led by Patient Capital, which is run by Oyo Rooms founder and CEO Ritesh Agarwal himself.
But the reporting of its first ever profit would be a shot in the arm for the firm, which has had an indifferent few years. Oyo Rooms isn’t the only Indian startup that’s reported its first profit in recent times — last year, Zomato had reported its first ever profit, and this year Urban Company and Delhivery were profitable for the first time. It remains to be seen if these profits will sustain, but Oyo seems to have crossed the first hurdle of finishing a year in the black in FY24.