05 August 2024
Profitability: In FY24, the company's consolidated revenue from operations declined by 1%, from Rs. 5,602 cr in FY23 to Rs. 5,542 cr, mainly due to a reduction in accommodation services. However, the company turned profitable, reporting a profit of Rs. 230 cr compared to a loss of Rs. 1,287 cr in FY23, resulting in an EPS growth of 118%, from -1.9 to 0.2 in FY24.
Asset Base: The asset base decreased by 19%, from Rs. 7,932 cr to Rs. 6,444 cr, while total equity increased by 55%, from Rs. 583 cr to Rs. 901 cr, due to positive retained earnings.
Strategic Changes: Additionally, in FY24, OYO focused on company-serviced hotels and saw increased demand in mid-premium and premium segments. As a result, the inventory of the company grew from 12,938 hotels in FY23 to 18,103 hotels in FY24.
The company aimed for sustainable growth and profitability by reducing administrative costs and optimizing marketing spending. However, the company recently withdrew its draft IPO papers for the second time and is now seeking private funding with a 70% reduction in valuation. Considering all these factors, the company's rating remains unchanged at "Sell." However, new investments in the stock are not recommended. Investors who are already invested can hold the stock, as there are chances that the company's performance may improve in the near future.
