DreamFolks Services dominates the airport lounge landscape

Business Overview

DreamFolks Services Ltd is an India-based company, which is a provider of airport service aggregator platform facilitating an enhanced airport experience to passengers leveraging a technology-driven platform.

It primarily integrates global card networks operating in India, card issuers, and corporate clients including airline companies, with various airport lounge operators, transport operators, and other airport service providers on its technology platform.

It acts as a link for banks for their credit & debit card sales and customer engagement programs, and for airlines to manage customer loyalty and retention. It provides lounges, food and beverage, spa, meet and assist, airport transfer, transit hotels /nap room access, and baggage transfer services.

Its lounge operators provide lounge access services across multiple airports in various cities. It also leverages technology and offers the solution through Omni-channels such as app-based access, tracking live benefits on each card.

Credit cards with airport lounge access are a benefit that is often underutilized by credit card users. Airport lounges provide a comfortable and relaxing environment for individuals who arrive at the airport ahead of their flight.

These lounges offer the opportunity to enjoy delicious food. Remarkably, the cost of accessing these lounges can be as low as Rs 2 to Rs 25, depending upon the offer provided by credit card companies.

Financial Overview

If we check the company’s financials, annual revenue experienced a significant jump of 174%, from Rs 282 Crore to Rs 773 Crore. The operating profit of the company stands at Rs 99 Crore, accompanied by an operating profit margin of 13%. Furthermore, the net profit of the company amounts to Rs 73 Crore.

The company’s return on capital employed (ROCE) and return on equity (ROE) are impressive and they are at 79.4% and 60.7%, respectively.

Share Performance

Today, the stock commenced trading at Rs 690.05, down by approximately 1% from the previous day’s closing price of Rs 695.50. While writing this article the shares of the company are trading at Rs 768 on BSE. The stock’s 52-week highs and lows are Rs 809.20 and Rs 348.20, respectively. Currently, its market capitalization stands at Rs 4072.39 Crore.

Over the past three months, the stock has delivered an impressive return of 67%, while in the last one year, it has generated a return of 108%.

In terms of ownership, the promoters hold 66.02% of the company’s shares, while foreign institutional investors (FIIs) and domestic institutional investors (DIIs) hold 11.94% and 8.92%, respectively.

Conclusion

According to the company, the number of domestic passenger traffic saw a major rise of 59.74% and stood at 13.6 Crore as against 8.5 Crore in the previous year in FY23. The growth of air traffic results in an increase in the number of aircraft fleets, which in turn leads to a higher demand for airports. Consequently, this drives the expansion of both the quantity and size of airport lounges.

To expand its premium service offerings company acquired a controlling stake that is 60% in Vidusar Golf and rebranded it to GolfKlik.

The company has an extensive global presence with over 1500 touchpoints spanning 121 countries. In India, the company holds an impressive market share of 95% in card-based lounge access and accounts for 68% of the overall lounge access volume. Additionally, the company provides 100% lounge coverage across all airports in India. Remarkably, with only 70 employees in FY23, the company effectively manages all of its operations.

Given the impressive financials, significant market share, and dominance of this company, it becomes a noteworthy contender that investors should closely monitor.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet, and is subject to changes. Please consult an expert before making related decisions.