Travel tech company, OYO reported a net loss of Rs 333 crore in the second quarter from Rs 414 crore in the first quarter. The company shared its H1 results with the Securities and Exchange Board of India (SEBI) on Saturday.
Oyo’s adjusted EBITDA grew eight-fold to Rs 56 crore from Rs 7 crore in the first and second quarters, respectively.
The IPO-bound company also mentioned in its addendum that revenue grew by 24 per cent to Rs 2,905 crore in H1 of FY23. OYO reported a 69 per cent growth in its gross booking values (GBV). GBV is the monthly revenue that the company earns per hotel.
Despite the reduction in losses, some of the company’s core expenses continued to rise as per the results. Its marketing and promotional expenditure grew by 19 per cent in H1FY23 from Rs 336 crore in H1FY22 to Rs 400 crore.
Similarly, there has been an increase of 5 per cent in the case of employee benefit expenditure.
Sources close to the company revealed that the current third quarter will be the most important to watch Oyo’s performance as it is the peak season for travel in India and few other geographies Oyo operates in. “The company will need to show another quarter of growing EBITDA for the market to start evaluating whether this performance trajectory is sustainable. This will be the most important parameter if the company decides to launch its IPO in the first quarter of 2023. The overall market will also need to adapt to growth stocks which seem to be out of favor at present,” said the source.
Currently, OYO operates through 157,000 hotels and storefronts across 35 countries in India, Europe and South East Asia.
The results come weeks after the Competition Commission of India (CCI) slapped OYO (which is owned by Oravel Stays Limited) for indulging in unfair business practices in the hotel segment. The CCI, in the 131-page order, said it has carried out an in-depth analysis to delineate the relevant markets and has placed special emphasis on such assessment in the case of platform markets.
The company revived its stock market plans this year, following a tough two years due to the COVID-19 pandemic. Its proposed issue included a fresh issue of equity shares of up to Rs 7,000 crore and an offer for sale of Rs 1,430 crore, according to its DRHP. The unicorn, founded by Agarwal in 2012, is preparing to make its stock market debut in 2023, according to a Bloomberg report.