PRISM (Oyo) Reports Rs 748 Crore Profit Ahead of IPO, Boosted by Tax Credit

Oyo IPO: PRISM, formerly Oravel Stays, has reported a Rs 748 crore profit for the nine months ending December 31, 2025, a significant turnaround from previous losses. This profit was boosted by a Rs 559 crore deferred-tax credit. The company also saw a substantial increase in operating cash flow, generating Rs 1,594 crore. A key IPO plan involves using Rs 4,987.5 crore to repay borrowings, aiming to reduce finance costs.

New Delhi: Oravel Stays Limited, now rebranded to PRISM, has reported a profit of Rs 748 crore for the nine months ended December 31, 2025, ahead of its proposed initial public offering.

The company had reported a profit of Rs 245 crore in financial year 2025 and Rs 230 crore in financial year 2024, compared with a loss of Rs 1,287 crore crore in financial year 2023, according to its updated Draft Red Herring Prospectus.

A large part of the latest reported profit came from a deferred-tax credit. For the nine months ended December 31, 2025, PRISM recorded a deferred-tax credit of Rs 559 crore. Its profit before tax for the same period stood at Rs 245 crore.

Deferred-tax credits are accounting entries linked to the expected use of accumulated losses or other tax assets against future taxable income. They improve reported profit but do not represent cash generated during the period.

"Our restated loss in fiscal 2023 was primarily due to elevated operating expenses amounting to Rs 3137 crore and employee benefits expense amounting to Rs 1549 crore (including share based payment expense amounting to Rs 630 crore), finance costs amounting to Rs 681.5 crore and exceptional items amounting to Rs 1,05 crore (primarily comprising severance related costs incurred in connection with workforce optimization initiatives, partially offset by reversal of share based payment expense which pertained to the same employees)," PRISM stated in its IPO filing, and added that a 'significant' increase in its operating expenses and cost base without a corresponding increase in revenue could materially affect its profitability and result in its incurring losses in the future.

At the same time, PRISM’s operating cash flow showed a significant increase. The company generated Rs 1,594 crore crore of cash from operations in the nine months ended December 31, 2025, compared with Rs 321 crore in financial year 2025. Before working-capital changes, cash generated from operations stood at Rs 2,011.5 crore for the nine-month period.

One of the key changes after the IPO could come from lower finance costs. PRISM’s finance cost stood at Rs 1,089 crore for the nine months ended December 31, 2025, substantially higher than its pre-tax profit for the period.

The company proposes to use Rs 4,987.5 crore from the fresh issue proceeds for repayment or prepayment of borrowings. This represents a significant part of the company’s debt reduction plan. The deferred-tax credit remains an important factor in understanding the reported Rs 748-crore profit. Investors are also likely to track the company’s operating cash generation, pre-tax profitability, and the impact of debt repayment on future earnings post its listing.