OYO’s FY25 Profit Story: Real Growth or Just a Tax Trick?
- September 6, 2025
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Hospitality giant OYO, gearing up for its long-awaited IPO, has once again posted profits in FY25 — but the real numbers tell a more complicated story. The company
Hospitality giant OYO, gearing up for its long-awaited IPO, has once again posted profits in FY25 — but the real numbers tell a more complicated story.
The company reported a net profit of INR 244.8 Cr, up 7% from INR 229.6 Cr in FY24, its first profitable year. But here’s the twist — the profit was largely fueled by a deferred tax gain of INR 765.6 Cr. Without that, OYO would have actually logged a loss of INR 489.3 Cr.
OYO’s “Profit” Explained
- Net Profit (Reported): INR 244.8 Cr in FY25 (vs INR 229.6 Cr in FY24).
- Deferred Tax Gain: INR 765.6 Cr in FY25 (vs INR 51.3 Cr in FY24).
- Loss Before Tax (Excluding Gain): INR 489.3 Cr (vs Profit of INR 235.8 Cr in FY24).
In other words, OYO’s bottom line was propped up by accounting benefits rather than pure business performance.
Ritesh Agarwal’s Spin on the Numbers
Founder and chairman Ritesh Agarwal painted a much rosier picture earlier this year. Addressing employees in May, he claimed:
- Profit Growth: 172% YoY to INR 623 Cr (unaudited).
- EBITDA Jump: 27% to INR 1,132 Cr in FY25 (vs INR 889 Cr in FY24).
Clearly, there’s a gap between internal communications and audited numbers, raising questions about what investors should trust ahead of the IPO.
New Identity: Enter PRISM Life
In a surprise move, OYO also announced a corporate rebrand. Its parent company will now be known as PRISM Life as it looks to diversify beyond hotels and homestays.
The new identity signals OYO’s ambition to expand into new categories, positioning itself as a lifestyle and tech-driven platform rather than just a hospitality player.
IPO Preparations Heat Up
All of this comes as OYO prepares to file its Draft Red Herring Prospectus (DRHP), a crucial step toward its public listing.
But the profitability question looms large. Will investors buy into the OYO growth story, or will they see the FY25 numbers as accounting maneuvering rather than sustainable performance?
The Big Question for Investors
OYO’s FY25 results highlight a company at a crossroads. On paper, it remains profitable. In reality, its core business still struggles with consistent profitability. The new identity under PRISM Life adds intrigue but also risk — will diversification dilute focus or unlock fresh growth?
For IPO watchers, OYO remains one of the most polarising bets in India’s startup ecosystem.
