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FabHotels gross revenue crosses Rs 550 Cr in FY24, losses widen 23%

Casa2 Stays, the parent firm of FabHotels, reported a 34% increase in gross revenue for the fiscal year ending March 2024. However, its loss rose by 23%, driven by a twofold increase in employee benefit expenses.

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Priyanshu Kamal
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Fabhotels

Casa2 Stays, the parent firm of FabHotels, reported a 34% increase in gross revenue for the fiscal year ending March 2024. However, its loss rose by 23%, driven by a twofold increase in employee benefit expenses.

FabHotels’ gross revenue increased to Rs 552 crore in FY24 from Rs 412 crore in the previous fiscal year (FY23), according to its financial statement sourced from the Registrar of Companies (RoC).

Fabhotels

The revenue for FY23 appears different this year as it marks FabHotels’ first set of financial statements prepared in compliance with Indian Accounting Standards (Ind AS), including Ind AS 101 and the first-time adoption of these standards.

FabHotels, a budget hotel chain with over 600 properties across more than 50 cities in India, generated 99.4% of its gross revenue from accommodation bookings under the “FabHotel” and “TravelPlus” brands. Gross revenue increased by 33.35% to Rs 549 crore in FY24. Meanwhile, other revenue sources contributed Rs 3.3 crore.

The company also recorded an additional income of Rs 11 crore from interest on deposits and liabilities written off (non-operating) which pushed its overall revenue to Rs 563.6 crore in the last fiscal year.

For the hotel chain firm, accommodation expenses remained the largest cost component forming 74% of the overall cost which grew by 32% to Rs 435 crore. FabHotels’ employee costs shot up 2X to Rs 92 crore in FY24. This includes Rs 15 crore as ESOP cost (non-cash).

Its commission expenses rose modestly by 8% to Rs 27 crore, while other costs added Rs 34 crore. Overall, the total expenses grew by 38.5% to Rs 588 crore in FY24 from Rs 424.7 crore in FY23.

The two-fold jump in employee benefits led FabHotel to increase its losses by 23% to Rs 114 crore in FY24, compared to Rs 93 crore in FY23. Its ROCE and EBITDA Margin were recorded at -84.09% and -19.52%, respectively. On a unit basis, the company spent Rs 1.06 to earn a rupee of revenue. At the end of FY24, FabHotel’s current assets stood at Rs 172 crore, including cash and bank balances worth Rs 94 crore.

Fabhotels

FabHotel has raised around $70 million to date including its $15.6 million led by Panthera Growth Partners in October 2023 at a post-money valuation of $141 million. According to the startup data intelligence platform TheKredible, Accel is the largest external stakeholder with 21.39% followed by Goldman Sachs.

FabHotels competes directly with Treebo and Bloom Hotels. In FY24, Treebo surpassed Rs 100 crore in revenue, while Bloom Hotels achieved a 73.6% increase in operational revenue to Rs 250 crore and recorded a profit of Rs 14 crore.

While Bloom Hotels has been the undoubted star when it comes to metrics, FabHotels has done better to weather than many ups and downs it has faced as well in its long journey since 2014. That has included operating in a market where the shadow of OYO’s giant impact loomed large, besides the pandemic of course. With its budget offerings and reach, FabHotels faces a moment of truth finally. To deliver sustainable profitability that can power future growth, or face the prospect of seeking a suitor to consolidate the sector. We believe the sector has a long runway of growth coming up, and the opportunity is immense for budget chains. The question is, will a legacy of struggles and recovery be an asset or a drag for FabHotels? Too many hotels, scarred by previous experiences, have been unable to move faster when new opportunities have emerged in places like Ayodhya or Varanasi, as they seek to avoid repeating past mistakes. But the hospitality sector leaves a very little margin for major misses now.

Fab Hotels, with its singular focus on the largest cities in India besides Goa, has placed its bets, with little leeway to change much now. Judgement awaits in the next few months and year, perhaps.




FabHotels financial fy24
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