Fitch upgrades OYO parent outlook on deleveraging prospects

Fitch Ratings has revised the outlook on OYO parent PRISM's long-term foreign and local-currency issuer default ratings to 'positive' from 'stable', reflecting expectations that the hospitality major will deleverage through earnings growth and stricter capital management.

The parent entity, previously known as Oravel Stays, has been renamed to PRISM. Fitch simultaneously affirmed the 'B' rating on an USD 830 million senior secured term loan issued by OYO's fully owned subsidiary, Oravel Stays Singapore Pte Limited, maintaining a Recovery Rating of 'RR4'. The loan carries unconditional guarantees from OYO and select group subsidiaries.

"The outlook revision reflects our view that OYO will de-leverage, driven by EBITDA growth and management's commitment to a more conservative capital structure," the ratings agency said in a statement.

Fitch expects OYO's revenue trajectory to accelerate in the coming years, projecting growth of 9-14 per cent in fiscal 2027-28, following a robust 50 per cent expansion in the preceding period. The improved outlook suggests the hospitality operator is gaining traction in stabilizing its financial position after aggressive expansion phases.