Global rating agency Moody’s has upgraded the corporate family rating of OYO‘s parent, Oravel Stays Limited, to “B2” from “B3” previously.
The rating agency has maintained a stable outlook for the travel tech major, which has shown significant improvement in its financial performance in recent quarters.
According to Sweta Patodia, assistant vice-president and analyst at Moody’s, the upgrade is attributed to OYO’s improved profitability in recent quarters. She added that the positive numbers have significantly strengthened the startup’s credit metrics.
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OYO finalises $825 Mn term loan with five-year tenure
The development comes as OYO is finalizing a new $825 million term loan with a five-year tenure. A significant portion of these funds, along with the $174 million raised by OYO between June and August this year, will be utilized to repay existing loans that mature in June 2026.
Moody’s expects OYO’s earnings to further increase upon the successful integration of G6 Hospitality, a US-based hospitality company. The rating agency also said that OYO’s acquisition of French rental homes company Checkmyguest (CMG) in July this year will pave the way for the improvement in the earnings before interest, tax, depreciation, and amortization (EBITDA) to around $134 million in the fiscal year 2024-25.
Overall, Moody’s reportedly said that “sustained improvement in operating performance” resulted in OYO generating $56 million in EBITDA in the first half of FY25. The upgrade from Moody’s comes at a time when OYO has been aggressively expanding its global footprint, bolstering operations in the country, and launching a spree of new offerings.
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OYO registers profit of INR 229 Cr
Reportedly, the hospitality giant offers integrated solutions to over 1.5 lakh hotel and home storefronts in more than 35 countries, including India, Europe, and Southeast Asia. Boosted by the post-pandemic travel surge, OYO became profitable in FY24, recording a net profit of INR 229.5 Cr compared to a net loss of INR 1,286.5 Cr in FY23. Despite this, their revenue from operations slightly declined by 1.3% to INR 5,388.7 Cr in FY24 from INR 5,463.9 Cr in FY23. Ritesh Agarwal, the founder, recently stated that the company aims to triple its net profit to INR 700 Cr in FY25.
