IPO-bound Oyo reports EBITDA of Rs 56 crore in Q2 as per financials submitted to Sebi

Oyo has filed its second addendum to update its Draft Red Herring Prospectus with the financial performance till the first half of FY2022-23.

SEBI had given Oyo the permission to submit updated financials before it examined and finally processed the company’s IPO application.

As per the addendum, its revenues in H1 of FY23 grew by 24% year on year to Rs 2,905 crore. The adjusted EBITDA improved from a loss of Rs 280 crore in the first half of financial year 2022, to a profit of Rs 63 crore in H1FY23.
As per the results, its EBITDA in Q2 grew eight fold from Rs 7 crore in quarter one to Rs 56 crore driven by a 23% quarter on quarter rise in gross booking value per hotel during quarter two to around Rs 4 lakh. It reported revenues of Rs 1445 crore during the second quarter.

But, the uptick in EBIDTA wasn’t enough to make the company profitable at a net level. The company logged in a net loss of Rs 333 crore, down from the Rs 414 crore reported in the first quarter of FY23.

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The monthly revenue per hotel, called the Gross Booking Value (GBV) per hotel increased by 69% year on year to Rs 3.48 lakh. The total GBV grew 33% to Rs 5,028 crore in H1 FY23 as per the addendum.

The gross rentals for Oyo’s European homes business stayed almost stagnant showing just a 4% increase. As of Sept 30, 2022, it had close to 80,000 vacation homes versus 74,000 as of same day last year.

While the company was able to maintain hotel storefronts at similar level as of June 30 2022 as per the previous filings, the decrease in hotels versus last year shows up as a concern.The H1 FY23 closing shows the number of hotels as 12,546. The number was 17994 as of Mar 31, 2022.

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

The gross booking value for Oyo’s hotels business grew by 44% year on year to Rs 3,006 crore in H1 FY23.

Employee expenses constituted the largest component on the cost side, at 18% of the revenues, followed by marketing expenses at 14% and general and administrative expenses at 7% of the revenues for H1 FY23.

A person familiar with matters at the company said it 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 start up stocks which seem to be out of favour currently,” the person added.

In September, Oyo had reported losses of Rs 2,140 crore from continuing operations for 2021-22, down 48% from Rs 4,103 crore in the previous year, as per an addendum filed with Sebi.

The company said the first quarter of 2022-23 was its first EBITDA positive quarter, even as its losses were Rs 414 crore. Its revenue from operations was Rs 1,459.3 crore for quarter one.