Hospitality company Oyo may achieve a positive earnings before interest, taxes, depreciation, and amortization (EBITDA) of $50-55 million in the current fiscal year, according to credit rating agency Moody’s. This would be a significant improvement from the negative EBITDA of $335 million that Oyo reported in the previous fiscal year.
Moody’s noted that Oyo’s recent capital raising and cost-cutting measures, including layoffs and exiting some non-core businesses, have strengthened its liquidity and financial position. The credit rating agency also expects Oyo’s revenue to grow by 20-25% in the current fiscal year, driven by the recovery in the travel industry as pandemic-related restrictions ease.
Oyo’s business was heavily impacted by the pandemic, as travel came to a near standstill for several months. The company had to lay off employees and cut back on expenses to stay afloat. However, with the easing of restrictions, the company has seen a gradual recovery in business. It has also been expanding its footprint in international markets, including the United States and Europe.
Moody’s also noted that Oyo’s profitability would depend on the pace of the travel industry’s recovery and the company’s ability to control costs. The credit rating agency highlighted the competitive nature of the hospitality industry and the potential for regulatory risks as factors that could impact Oyo’s performance.
Oyo’s positive EBITDA projection is a positive sign for the company, which has been facing financial challenges for the past couple of years. Moody’s outlook suggests that the company’s efforts to turn around its business are paying off, and it is on track to achieve sustainable profitability.
In conclusion, Oyo’s projected positive EBITDA of $50-55 million in the current fiscal year is a significant improvement from the negative EBITDA reported in the previous fiscal year. Moody’s expects Oyo’s revenue to grow, driven by the recovery in the travel industry, and notes that profitability will depend on the company’s ability to control costs and navigate regulatory risks.
