Travel tech firm Oyo turned cash flow positive during the fourth quarter of FY23, the company informed its employees in a townhall on Thursday, adding that its next goal is to become profitable.
Industry sources said that the company told the employees that it ended Q4 with nearly Rs 90 crore surplus cash flow. Ritesh Agarwal, founder and CEO, also told the employees that the firm marked its first financial year of adjusted Ebitda profitability in FY23 and is expected to clock adjusted Ebitda of nearly Rs 800 crore in FY24.
Sources said that Oyo‘s shift towards profitability can be attributed to an upsurge in bookings across all key geographies, but especially in the Europe homes business that is witnessing exceptional advance bookings for the upcoming summer season peak and even the relatively off-season period from November to March.
“Cash flows also have a seasonality element. They increase during the European high season when advance bookings peak. Hence, the positive cash trajectory is expected to continue into the first quarter of FY24. Oyo’s last reported treasury or cash corpus on the balance sheet is Rs 2,700 crore,” sources added.
In March, Oyo refiled its draft red herring prospectus (DRHP) with the Securities and Exchange Board of India under the recently introduced pre-filing route. The firm had originally filed preliminary documents with Sebi on September 2021 for a Rs 8,430-crore IPO, including a fresh issue of equity shares aggregating up to Rs 7,000 crore and an offer for sale of Rs 1,430 crore.
Oyo’s last submission to Sebi, in November 2022, was of its updated financial results for the first half of FY23, to make the public aware of the material uptick in its business performance since its initial IPO application in September 2021.
The updated financials showed a bounce back in topline, a sustained increase in gross margins and an overall reduction in losses. It had reported its maiden positive adjusted Ebitda of Rs 63 crore, a 24% year-on-year increase in revenues and a 69% increase in monthly booking value (gross booking value per month) for its hotels in H1FY23.
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The company is also expected to triple its adjusted Ebitda in H2FY23 to Rs 185 crore, this 3X jump was attributed to the reduction in costs led by operational efficiencies and growth in the hotels business.
Oyo is also projecting to clock Rs 5,700 crore plus in revenues in FY23 with a 19% y-o-y growth. Its adjusted gross margin is expected to operate at a steady level of 41% of revenues in FY23.
In the run-up to its IPO, Oyo also trimmed down its employee count last year in December after it fired 600 of its 3,700-strong workforce as it shut down a few products. At that time, Oyo said that the downsizing hit product and engineering teams, corporate headquarter, and the Oyo vacation homes teams.