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Hospitality major OYO turned cash flow positive for the first time, noted founder Ritesh Agarwal on Thursday. The decacorn managed to achieve this in the fourth quarter of FY 2023 and is slated to end the quarter with a surplus cash flow of ₹90 crores.

Addressing an internal town hall, Agarwal shared the update with OYO employees, according to PTI. As per media reports – which cite other sources – Agarwal noted that the positive cash trajectory is expected to continue into the first quarter of FY24. He added that the hospitality tech firm is also expected to clock an adjusted EBITDA of nearly ₹800 crores for the same period.

This development means that FY23 is the first-ever period of profitability for the hospitality major – which is on track to end the year with adjusted EBITDA of around ₹245 crores during the period – ever since its inception around 2013. OYO’s last reported treasury or cash corpus on the balance sheet amounted to ₹2,700 crores, according to media reports. OYO is also reportedly planning to add another 1,800 hotels in its premium category this year. And if this is not enough, Oyo also expects to close its adjusted EBITDA for the second half of FY23 at ₹185 crores, a growth of three times from its adjusted EBITDA in the first half of the year.

It also comes as the decacorn is aiming to go public via the confidential pre-filing route – last month, it refiled its Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) and reduced the size of its planned IPO by half, and now aims to raise $400-600 million through its IPO.

Oyo’s success in achieving positive cash flow is a positive development for the hospitality industry in India. The industry had been hit hard by the Covid-19 pandemic, and many hotels and resorts have struggled to survive. Oyo’s success shows that it is possible for companies in the sector to achieve profitability, specially after difficult times have passed. Recent times have been slightly favorable to OYO, which noted a rise in bookings across all key geographies, especially in the Europe homes business.

The company’s success may also encourage other startups in the hospitality sector to adopt similar strategies. Oyo’s focus on profitability rather than growth is a model that other companies are following, especially amidst the economic downturn in the market and steep plunges in the valuations of enterprises. This achievement is also likely to boost investor confidence in Oyo. The company has been one of India’s most valuable startups, but its valuation has been hit by a series of setbacks and controversies. The positive cash flow will help to allay concerns about the company’s financial health and could help to attract new investors.