Oyo, the hospitality and travel-tech firm, is expected to witness a significant rise in revenue in FY23, according to its Founder and Group CEO Ritesh Agarwal. The company aims to generate over Rs. 5,700 crore, which marks a 19 percent increase from its FY22 record of Rs. 4,780 crore. At a recent town hall, Agarwal informed the employees that Oyo’s focus in 2023 would be on achieving an adjusted EBITDA of nearly Rs. 800 crore.
Agarwal highlighted that the firm’s steady growth in India, Indonesia, the US, and the UK, along with optimization and synergies in its European vacation homes business, have contributed to better financials. He also stated that Oyo’s revenue for FY23 is anticipated to grow by 19 percent.
In his presentation, Agarwal noted that Oyo’s key focus areas in 2023 would be on improving its profit after tax (PAT), maintaining momentum in EBITDA, achieving cash flow positivity in FY24, enhancing cost efficiency, and improving contribution margins.
The company is projected to conclude FY23 with over 1.72 lakh storefronts, representing a growth of almost 2 percent compared to the previous year.
Agarwal also mentioned that Oyo currently has a cash balance of Rs. 2,700 crore, which he expects the firm to utilize sparingly for its ongoing operations. As cash flow improves, Oyo’s reliance on external funds is expected to decrease gradually.
Oyo reported an adjusted EBITDA of Rs. 63 crore in the first half of FY2023 in its filing with Securities and Exchange Board of India (SEBI) as an update to its Draft Red Herring Prospectus (DRHP).
In September 2021, Oyo had filed preliminary documents with SEBI for a Rs. 8,430 crore IPO. However, the IPO was postponed due to volatile market conditions, forcing the company to target a lower valuation of around $7-8 billion (roughly Rs. 57,700 crore to Rs. 65,900 crore) instead of the initial $11 billion (roughly Rs. 90,600 crore) it had hoped for.