OYO (Oravel Stays) Deep-Dive Report

Executive Summary

Oravel Stays Ltd (OYO) has transformed from a fast-growth hospitality aggregator to a profitable, tech-enabled global hotel platform. According to Altius Investech, OYO now operates in over 35 countries with more than 157,000 listings. Its FY25 financial metrics show a dramatic improvement, with adjusted EBITDA turning strongly positive and a sharp jump in PAT. For unlisted investors, OYO presents a compelling opportunity — a near-IPO, high-growth firm that’s finally proving its business model can scale profitably.

Company Overview & Business Model

OYO, incorporated in 2012, is a hospitality-tech company that started by standardizing budget hotel rooms and has evolved into a managed and franchised ecosystem. Its business model has shifted significantly:

• Earlier: OYO acted largely as an aggregator — buying room inventory at a discount and reselling it, making margin on the spread.

• Now: It has moved toward a fuller control model — managing or locking in inventory under its brand, and taking a commission (reported around 22%) from hotel partners instead of simply reselling.

This evolution allows OYO to drive higher efficiency, standardize quality, and increase its control over pricing and inventory. Its platform brings technology to property owners (OYO calls them “patrons”), offering tools for pricing, operations, and occupancy management.

Geographically, OYO has a strong presence in India, but also operates in Malaysia, China, UAE, Nepal, Indonesia, and more according to its Altius profile. Its global expansion is a core part of its long-term growth story.

Financial Performance & Growth Trajectory

As per Altius Investech data, OYO has made a strong financial comeback:

• FY25 Revenue: ~₹6,463 crore (growth from ~₹5,389 crore in FY24)

• Adjusted EBITDA: ~₹1,132 crore in FY25, a meaningful increase year-on-year

• PAT (Profit After Tax): ~₹623 crore in FY25, representing a 172% increase from FY24’s PAT of ~₹230 crore

• EPS: ~₹0.93, up significantly from the prior year’s ~₹0.36

These numbers reflect not just recovery but a business that has scaled into profitability. OYO’s ability to generate positive EBITDA consistently (10 consecutive quarters, per Altius) signals operational discipline and strong cash-flow generation.

On the demand side, OYO’s Q4 FY25 data (from Altius) shows strong Gross Booking Value (GBV) growth: the business is leveraging its global network, brand strength, and operational leverage.

Strategic Strengths & Growth Drivers

1. Global Reach & Scale

OYO’s presence across 35+ countries gives it both scale and reach. This geographic diversification supports higher growth potential and hedges against regional downturns.

2. Asset-Light Model

While OYO has shifted toward managing its inventory, it still leans heavily on the asset-light model. This helps keep capital expenditure (CAPEX) manageable and improves return on capital compared to traditional hotel chains.

3. Technology Infrastructure

Its technology platform provides real-time pricing, yield optimization, and operational tools to partner hotels. This not only improves guest experience but also strengthens OYO’s value-add to its partners.

4. Profitability Inflection

With FY25 showing a steep rise in EBITDA and PAT, OYO has proven its unit economics at scale. If it sustains this trajectory, it becomes not just a growth story, but a profitable one.

5. IPO & Liquidity Roadmap

OYO has previously attempted an IPO. While it withdrew its DRHP in May 2024, it’s now reportedly focused on private placements and has raised fresh capital. This suggests that management is steering toward improving financial metrics before re-attempting a public listing. According to Altius, OYO’s unlisted share market remains active, and investor sentiment is increasingly optimistic.

Risks & Challenges

1. High Valuation Risk

Even as the business turns profitable, unlisted shares may be priced aggressively. Future IPO or dilution risk could impact returns for early unlisted investors.

2. Execution Risk

Global operations require effective execution across geographies, each with its local regulations, property norms, and competitive dynamics.

3. Partner / Quality Risk

OYO’s model depends significantly on partner-run hotels. Ensuring consistent service quality and occupancy across its portfolio is a constant challenge.

4. Macro & Travel Risk

The hospitality industry is highly sensitive to macroeconomic cycles, travel restrictions, and economic downturns.

5. Regulatory & ESG Risk

Hospitality companies may face regulatory scrutiny, property compliance issues, or ESG (environment, social, governance) pressures, particularly in global jurisdictions.

Investment Thesis & Recommendation

Long-term Growth + Value Play

For unlisted investors, OYO offers a compelling mix: high growth, improving profitability, and a clear path to liquidity via IPO. If the company continues its momentum, the return potential could be significant.

Event-driven Investors

Those looking for liquidity events should watch for IPO re-filing, large private placement rounds, or potential M&A. A successful IPO could unlock value for early investors.

Risk-Averse Investors

While the numbers look strong, investors should be cautious and wait for consistent profitability, clear IPO timelines, or credible lock-in mechanisms. Entry at high unlisted prices carries meaningful risk if growth slows or valuation compresses post-listing.

Catalysts to Watch

• Re-filing or fresh filing for IPO / DRHP

• Sustained profitability in subsequent quarters

• Geographical expansion, especially in key international markets

• Strategic partnerships or acquisitions in hospitality

• Continued improvement in Gross Booking Value and EBITDA margin

Conclusion: OYO as a Modern Hospitality Bet

OYO’s journey from a budget hotel aggregator to a global, profitable hospitality-tech platform is far from over. With strong revenue growth, improving margins, and an ambitious IPO roadmap, the company stands at a critical inflection point. For unlisted investors, this could be one of the most compelling hospitality and tech plays — provided they are ready to navigate execution risk and remain patient.

OYO is no longer just about scale — it's now about sustainable profitability. If it delivers, early unlisted investors could be well rewarded.