New Delhi, September 6, 2025 – In a significant milestone for India’s startup ecosystem, hospitality giant OYO has announced a profit after tax (PAT) exceeding Rs 200 crore for the first quarter of fiscal year 2026 (Q1 FY26, April-June 2025). This impressive financial performance comes alongside a strategic rebranding of its parent entity, Oravel Stays, to PRISM Life. The move signals OYO’s evolution from a budget hotel aggregator to a diversified global player in the travel and hospitality sector, with eyes firmly set on sustainable growth and an impending initial public offering (IPO).
Founded in 2013 by the young entrepreneur Ritesh Agarwal, OYO began as a simple platform to standardize and book affordable hotel rooms across India. Agarwal, who dropped out of college to pursue his vision, bootstrapped the company with a modest investment and quickly scaled it into one of the world’s largest hotel chains by room count. From its early days in Gurgaon, OYO expanded aggressively, entering markets in Southeast Asia, Europe, and the Middle East. However, the journey wasn’t without turbulence. The COVID-19 pandemic hit the hospitality industry hard, leading to massive layoffs, revenue dips, and investor scrutiny. OYO faced criticism for its rapid expansion model, which some analysts dubbed as “growth at all costs,” resulting in operational inefficiencies and legal battles with hotel partners over unpaid dues.
Yet, the past few years have marked a dramatic turnaround for OYO. After reporting its first-ever annual profit in FY25 – a PAT of Rs 229 crore on revenues of Rs 5,463 crore – the company has maintained momentum into FY26. This Q1 FY26 profit of over Rs 200 crore represents more than a doubling from the Rs 87 crore PAT recorded in the same quarter last year. Revenue for the quarter surged 47% year-on-year to Rs 2,019 crore, driven by robust demand in key markets like India and Southeast Asia. Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) also skyrocketed by 231% to Rs 550 crore, underscoring improved operational efficiency and cost controls.
Analysts attribute this profitability streak to several strategic shifts. OYO has focused on premiumizing its offerings, moving beyond budget hotels to include mid-scale and luxury properties under brands like OYO Townhouse and Collection O. The company has also invested heavily in technology, using AI-driven pricing algorithms and data analytics to optimize occupancy rates and reduce overheads. International expansion has paid off, with contributions from markets like Indonesia, Malaysia, and the UK bolstering the bottom line. In FY25, OYO’s EBITDA crossed Rs 1,083 crore on revenues of Rs 6,252.8 crore, a 16% increase from the previous year. This consistent performance has silenced doubters who once questioned the sustainability of OYO’s business model.
The rebranding of the parent company to PRISM Life is perhaps the most intriguing aspect of this announcement. PRISM, which stands for “Platform for Real Estate, Infrastructure, Services, and Mobility,” reflects OYO’s ambition to broaden its scope beyond traditional hospitality. According to company insiders, the new identity encapsulates a multifaceted approach to lifestyle services, including vacation homes, co-working spaces through its Innov8 brand, and even potential forays into real estate management and mobility solutions. Ritesh Agarwal, in a statement, emphasized that PRISM Life represents “a prism that refracts opportunities across diverse sectors, creating value for stakeholders worldwide.” This rebranding aligns with OYO’s global aspirations, as it now operates in over 80 countries with more than 1.5 lakh properties.
The timing of these developments is no coincidence. OYO has been gearing up for an IPO since 2021, when it first filed draft papers with the Securities and Exchange Board of India (SEBI). However, market volatility and regulatory hurdles delayed the listing. With two consecutive years of profitability and a strengthened balance sheet, OYO is now in a stronger position to revive its IPO plans. Sources close to the company indicate that the listing could happen as early as late 2025 or early 2026, potentially valuing the firm at $9-10 billion. To sweeten the deal for employees and investors, OYO recently approved an 11:1 bonus issue, effectively multiplying shareholdings and boosting morale.
Industry experts hail this as a watershed moment for Indian startups. “OYO’s profitability in a post-pandemic world demonstrates resilience and adaptability,” says Arvind Singh, a venture capital analyst at Mumbai-based RedFort Capital. “The rebranding to PRISM Life positions it as a tech-enabled lifestyle conglomerate, much like how Airbnb evolved from room rentals to experiences.” However, challenges remain. Competition from players like MakeMyTrip, Booking.com, and domestic rivals such as FabHotels is intensifying. Regulatory scrutiny in markets like Europe over data privacy and labor practices could pose risks. Additionally, OYO’s debt levels, though reduced, still stand at around Rs 1,200 crore, requiring careful management.
On the domestic front, OYO’s growth has been fueled by India’s booming travel sector. With domestic tourism rebounding strongly – thanks to improved infrastructure like new airports and highways – OYO added over 3,500 corporate clients in FY25 alone. The company’s focus on underserved tier-2 and tier-3 cities has paid dividends, capturing a market where affordability meets quality. In Q1 FY26, India and Southeast Asia accounted for the bulk of revenue growth, with occupancy rates averaging 75-80%.
Looking ahead, OYO has set ambitious targets. For FY26, the company aims for an EBITDA of Rs 2,000 crore, bolstered by recent acquisitions like Motel 6 in the US. This deal, completed in late 2024, adds thousands of properties to OYO’s portfolio and is expected to contribute significantly to international revenues. Agarwal has also outlined plans to invest in sustainable practices, such as eco-friendly hotels and carbon-neutral operations, aligning with global trends.
OYO’s story is emblematic of India’s startup renaissance. From a valuation dip during the pandemic to becoming one of the most profitable unicorns, it showcases the power of innovation and perseverance. As PRISM Life, OYO is not just renting rooms; it’s building an ecosystem that touches real estate, travel, and beyond. Investors and entrepreneurs alike will watch closely as this homegrown giant steps onto the global stage.
In conclusion, OYO’s Q1 FY26 results and rebranding mark a new chapter of maturity and ambition. With profits soaring and a fresh identity, the company is poised to redefine hospitality in the digital age. As India Inc. cheers this success, it serves as a reminder that even in volatile times, strategic pivots can lead to extraordinary outcomes.
Last Updated on Saturday, September 6, 2025 3:55 pm by Entrepreneur Guild Team
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