Dreamfolks Services Limited — Investor Meet, 13-11-2024: Analysts/Institutional Investor Meet/Con. Call Updates

**Financial Performance:** Dreamfolks Services Limited reported a solid performance for Q2 FY '25, achieving a revenue of INR 316.9 crores, reflecting a year-on-year growth of 12.2%. Gross profit increased by 11.9% to INR 39.2 crores, with a steady gross margin maintained at 12.4%. For the first half of FY '25, revenue grew 16.2% year-on-year to INR 637.7 crores, and gross profit surged 21% to INR 76.8 crores, improving the gross margin from 11.6% to 12.0%. The adjusted EBITDA for Q2 was INR 25.5 crores, though it contracted slightly compared to the previous year, leading to a margin of 8.1%.

**Future Outlook and Growth Drivers:** Management highlighted a strategic focus on diversifying services beyond airport lounges, with recent launches including highway dining services and excess baggage support. These initiatives aim to tap into the growing travel and tourism sector in India, which is projected to see a 6.9% annual growth rate through to 2028.

**Order Book and Operational Updates:** The company has fully covered all Indian airports, adding three new lounges in Pune and catering to increased passenger demand. They have also expanded their international lounge network, incorporating 38 additional lounges with a significant presence in Asia.

**Analyst Q&A Insights:**

- **Revenue and Profitability:** Clarifications indicated the impact of spend-based program changes by clients that may affect margins and profitability.

- **Market Position:** Analysts inquired about competitive threats, with management expressing confidence in their diversified client base and service expansion aiding resilient growth.

- **Operational Challenges:** Supply chain issues were acknowledged, and management assured that strategies were in place to enhance efficiency and service delivery.

- **Capex and Capital Allocation:** Growing employee expenses are strategic, tied to talent acquisition aimed at long-term value creation.

- **Strategic Priorities:** Management reiterated a commitment to service innovation and strategic collaborations, which include partnerships with enterprises and airlines.

**Strategic Focus Areas:** Themes of diversification, service expansion, and technological integration were echoed throughout the call, reflecting a proactive approach to mitigate industry challenges.

**Investor Insight:** Overall, Dreamfolks appears to be on a positive trajectory with solid revenue growth and diversified service offerings in response to market dynamics. The strategic initiatives undertaken indicate a growth-oriented mindset that may align with a 'buy' position for investors, considering the company's capacity for innovation and adaptability amidst potential headwinds.