oppn parties Troubles At Oyo: Growth Versus Profits

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  • Neha Bora was subsequently released and Dipke is to appear before a magistrate today at noon
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  • The Reserve Bank of India is considering further monetary tightening to counter capital outflows and increase the cost of betting against the rupee, according to bankers and analysts cited by Reuters. The measures follow recent rate increases and steps to drain liquidity as pressure on the currency and inflation concerns persist
  • India directed oil marketing companies to stop diverting sugar-based feedstocks for ethanol production in the 2026–27 supply year, according to a new tender issued on Friday. The companies have invited bids for 11 billion litres of ethanol made from alternatives including corn and broken rice, amid concerns about domestic sugar supplies and prices
  • Finance Minister Nirmala Sitharaman said India's trade imbalance with China was growing sharply and attributed the problem partly to restrictions on Indian goods and services entering the Chinese market. China subsequently said it was ready to work with India to address mutual economic and trade concerns; India's trade deficit with China reached $69 billion in the first half of FY2026–27, up 27% year-on-year
  • Indian equity benchmarks extended their recovery on Friday, with the Sensex rising 413.66 points to close at 74,729.27 and the Nifty 50 gaining 148.80 points to settle at 23,146.15. Information technology shares, including Tech Mahindra, Infosys and TCS, helped lift the indices
  • India defeated Zimbabwe by four wickets in the opening women's T20 International in Raipur, taking a 1–0 lead in the three-match series. Deepti Sharma and Niki Prasad combined in an 82-run stand after India's top order collapsed, helping the hosts chase down Zimbabwe's total of 114 for five
  • Indian wrestler Komal won bronze in the women's 59 kg category at the Under-23 World Wrestling Championships in Las Vegas, defeating Kazakhstan's Viktoriia Khusainova 7–2. Fellow Indian Amruta Pujari advanced to the women's 72 kg final after recording two pinfall victories
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  • The Supreme Court issued notices to the Election Commission of India, Delhi Police and opposition leaders, including Rahul Gandhi and Akhilesh Yadav, in separate petitions concerning electoral-roll revision and protests held in Delhi on October 10–12. The court also directed the preservation of CCTV footage linked to allegations of police excesses
  • The Supreme Court ruled that a person converting from Hinduism to Islam cannot automatically claim backward-class reservation benefits in the new religious community solely on the basis of their previous caste status. The judgment upheld the Madras High Court's decision striking down a 2024 Tamil Nadu government order that permitted such certification for specified communities
  • The Election Commission of India ordered a Special Summary Revision of electoral rolls in 14 states and three Union Territories, using January 1, 2027, as the qualifying date for voter eligibility. The draft rolls are scheduled for publication on November 12, claims and objections will be accepted until December 11, and the final rolls are due on January 4, 2027
Delhi HC refuses to ban CJP's Tiranga rally at Central Park in Connaught Place today /////// Police says will control and regulate it /////// NDMC closes the park for the public on Friday and Saturday
oppn parties
Troubles At Oyo: Growth Versus Profits

By Sunil Garodia
First publised on 2020-01-16 07:50:39

About the Author

Sunil Garodia Editor-in-Chief of indiacommentary.com. Current Affairs analyst and political commentator. Author of Cyber Scams in India, Digital Arrest, The Money Trap and The Human Hack

Oyo is facing double trouble. It was being bombarded by desertions from partner hotels in China and India for the last six to nine months on account of alleged unfair business practices. Now it is being pressurized into downsizing by investors. It has already terminated the services of more than 500 staff in China and over 1200 in India. Another 1200 are soon to be given the pink slip in India. Most companies trim 5% of their workforce every year for under-performance, but such large scale lay-offs are signs of trouble in the company.

Why is this happening? There are two big reasons for this. The first is that there has been a change in the global policy of Oyo’s biggest investor, the SoftBank. Rattled by huge losses in companies like Uber and WeWork in its portfolio, the startup investor has changed its global policy. It has started nudging companies to cut the 'fancy' stuff and show profits. Shedding part of the workforce and reassigning tasks to remaining workers is part of this strategy to turn the companies around.

The second reason is that despite, or maybe because of, growing phenomenally, the losses of Oyo have continued to climb. This has forced the company to allegedly impose several undue charges on partner hotels. The hotels allege that this was not part of the contract they signed with Oyo. Many of them have stopped taking bookings from the company and some of them have taken it to court. Oyo has already admitted that there has been a communication gap with its hotel partners and has promised to set it right. But, for now, it has entered turbulent skies.

This once again throws open the growth versus profits debate. Should startups chase growth without giving much thought to profits? Will profits follow if the company reaches certain levels? Who decides what level of growth is optimum? When should a company stop chasing growth and start consolidating? Should investors keep pumping in money even if profits are nowhere to be seen? There are no easy answers to these questions.

Customer acquisition and retention is an extremely costly process. Further, customer loyalty cannot be taken for granted in this age of fierce competition and mouth-watering offers and discounts. Hence, even if growth is important, a period of consolidation, of catching one's breath and setting the house in order, is equally important. If growth is important to keep ahead of the competition, profits are equally, or even more, important in order to keep running the company and make it attractive for investors. Just the expectation of profits can take one thus far and no further. Oyo must be realizing this the hard way. 

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