Ritesh Agarwal-led OYO made Rs 158 crore profit in Q2FY25, revenue stood at Rs 1,578 crore

Ritesh Agarwal-led hospitality giant OYO has reported a net profit of Rs 158 crore for the second quarter ending September 30, 2024 (Q2FY25), PTI reported.

The performance marks a substantial turnaround from the Rs 50 crore loss recorded during the same quarter last year.

The growth continues the momentum established in Q1FY25, where the Gurugram-based company reported a net profit of Rs 132 crore.

For the first half of FY25, the company's net profit has reached Rs 291 crore, a stark improvement from the Rs 91 crore net loss it posted during the same period in the previous fiscal year. 

Revenue growth and booking volume

The company’s revenue for Q2 FY25 stood at Rs 1,578 crore, reflecting a 12% increase compared to Rs 1,413 crore in the previous quarter.

OYO's gross booking value (GBV) for the September quarter was Rs 3,243 crore, showing a 17% year-on-year increase. This rise in bookings has been attributed to the company's efforts to improve its service offerings and cater to premium markets.

Strategy of premiumisation

Oyo’s profitability is largely credited to its premiumisation strategy, which involves launching company-serviced hotels under various brands, including Townhouse, Collection O, Palette, and Sunday.

According to founder and CEO Ritesh Agarwal, this focus on higher-end, company-operated hotels has played a critical role in boosting both revenue and customer satisfaction.

According to the PTI report, Agarwal emphasized in a recent town hall with employees that the company aims to maintain this premiumisation approach to drive further growth.

Capital investments and market valuation

Earlier this year, OYO raised Rs 1,457 crore in fresh capital from various investors, including domestic family offices and prominent stock market investors.

This fundraising round valued the company at approximately $2.5 billion, a significant decrease from its peak valuation of around $9 billion in 2021.

An entity associated with Agarwal led the round, contributing Rs 830 crore, while additional investments came from notable entities such as the family office of Mankind Pharma promoters, ASK Financial Holdings, and J&A Partners.

Expansion through strategic acquisitions

Last month, OYO made a significant acquisition of G6 Hospitality, which owns and operates the iconic American hotel chain Motel 6 and Studio 6, in an all-cash deal valued at $525 million (approximately Rs 4,400 crore).

In August 2024, the company also acquired Paris-based premium rental homes company CheckMyGuest for Rs 230 crore in a cash and stock deal.