Oravel Stays Ltd

Oravel Stays Limited is a leading new-age technology platform that operates an online portal ‘oyo rooms.com’. OYO Hotels & Homes is a renowned hospitality company that has revolutionized the hotel industry with its innovative approach to affordable and comfortable accommodations. Founded in 2013 by Ritesh Agarwal. The business offers consumers the option to choose rooms and living areas that best fit their needs at an affordable price. They have been focused on reshaping the short-stay accommodation space since its incorporation in 2012.

Industry Tailwinds:

Within travel and tourism industry short-stay accommodation market is one of the fastest growing segments. The short-stay accommodation markets in India and SouthEast Asia grew at 16.5% and 9.3% CAGR respectively, while the global short-stay accommodation market grew at 7.5% CAGR. Global short-stay accommodation market is projected to reach US$1.9 trn by 2030.

Global Presence:

OYO’s business spans over 10+ countries, 500+ Cities, 18000+ Buildings and over 5,15,000 Rooms with 12,000+ employees globally.

Key points :
  • OYO bought 62- years -old American hotel chain Motel 6 in cash for Rs 4,463 crores.
  • SUNDAY Hotels OYO, plans to increase 25 hotels across key travel destinations in India by March 2025.
  • OYO plans 400 properties at spiritual places, including Ayodhya,Tirupati, and Katra-Vaishno Devi by the end of 2024.
  • OYO's rapid expansion plan has bear fruits for them as almost 75% of the revenue is coming from their overseas operations. Owner holding has increased from 29.97 % to 32.57 %.
  • It has an asset light business model. It does not own the storefronts listed on its platform and has a lean cost structure.
  • Post-Covid, the company implemented several initiatives that have strengthened its unit economics profile while improving the value proposition for owners and customers. It achieved operational profitability in FY23 with adjusted EBITDA of Rs 2.8bn followed by ~Rs8.8bn in FY24.
  • OYO reported its first ever net profit of Rs 229 crore for the financial year ending March 2024. OYO's founder recently shared that the company is aiming to triple its profit after tax to Rs 700 Cr by FY25.
Financial Year EBITDA (in Crores) Investment Period PAT (in Crores)
2023
5,463.9
-373.9
-1,286.5
2024
5,388.8
707.2
229.6
2025
6463
1132
623
Growth Drivers:
  • Promoter Buy Back: As per media reports, Ritesh Agarwal is planning to increase his stake in the company.
  • Debt Refinancing: OYO has withdrawn IPO papers to re-finance its term loan ~Rs. 37.4 bn at a lower interest rate which can lead to annual cost savings of ~Rs 1.3bn
  • In FY24, OYO added about ~5,200 hotels and ~5,800 homes. OYO is scaling its premium brand ‘Sunday’ across key markets in domestic and international markets.
  • It acquired French premium rental homes company ‘Checkmyguest’ which generated a GBV of €82mn in 2023.
  • The company has reduced its total debt to Rs.36bn in FY24 compared to Rs. 50bn in FY23.
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