📌 At a Glance (Excerpt)
Dreamfolks went public as the “MakeMyTrip of airport lounges,” rode the post-COVID travel boom, and even promised cardholders golf games and nap pods. But from ₹522 highs to ₹236 today, investors are realizing — selling peace of mind at airports doesn’t guarantee peace in your portfolio.
1️⃣ Flashback: IPO Dreams at 30,000 Feet
Founded in 2008, Dreamfolks quietly became India’s largest airport service aggregator — giving credit card holders VIP lounge access, spa perks, and more. It wasn’t an airline or an airport — just the middleman between banks and experience vendors.
Then in 2022:
- 🪩 IPO launched at ₹326
- 🌍 Listed at ₹508 — a 56% premium
- 🧋 Business looked light-asset, tech-driven, scalable
- 😎 Investors said: “Finally! A cool B2B2C story.”
But post-IPO, turbulence began.
2️⃣ 5-Year Financials: Lounge Full, Valuation Empty?
| 💼 Metric | FY21 | FY25 | CAGR |
|---|---|---|---|
| Revenue (₹ Cr) | 106 | 1,292 | 88% 🚀 |
| EBITDA (₹ Cr) | -0 | 89 | NA |
| Net Profit (₹ Cr) | -1 | 65 | Healthy |
| EPS (₹) | -3.05 | 12.28 | Turned profitable |
| ROCE | -1% | 33.8% | Best-in-class 💪 |
| OPM | -0% | 7% | Stable, not stellar |
🎯 Revenue boomed due to post-COVID travel demand. But margins peaked at 14% in FY23… and have been falling since.
3️⃣ Quarterly Check-In: Cracks on the Runway
| Quarter | Revenue (₹ Cr) | OPM (%) | PAT (₹ Cr) | EPS |
|---|---|---|---|---|
| Q1 FY24 | 321 | 7% | ₹17 | ₹3.24 |
| Q3 FY24 | 340 | 7% | ₹17 | ₹3.23 |
| Q4 FY25 | 314 | 6% | ₹15 | ₹2.80 |
💡 Despite revenue growth, margins and EPS are down.
📉 TTM PAT fell 5% YoY — first decline post-listing.
Why? Volume growth slowed and banks renegotiated rates.
4️⃣ Business Model: Looks Fab, But…
🛬 Dreamfolks Makes Money By:
- Partnering with banks/credit card companies
- Giving customers access to lounges, spas, F&B, nap rooms
- Earning a commission per transaction
🧾 90%+ of revenue is B2B2C — i.e., banks like HDFC, Axis, ICICI
🧨 What Went Wrong?
- Some banks are now capping lounge access
- Negotiating lower per-user fees
- Dreamfolks has no pricing power over lounges
- Fixed vendor payout, squeezed commissions
📉 That’s why margin dropped from 14% → 7% → 6%.
5️⃣ Promoter Exit + FII Ghosting = Red Flag Season 🎏
| 🧾 Shareholding | FY22 | FY25 |
|---|---|---|
| Promoters | 67% | 65.7% |
| FIIs | 11.8% | 0.98% 👻 |
| DIIs | 9.3% | 3.49% ⬇️ |
| Public | 12% | 29.8% ⬆️ |
🚨 Translation:
- FIIs dumped
- DIIs booked profits
- Public holding ballooned
- Price crashed 51% in 1 year
Retail got left holding the coffee cup.
6️⃣ Valuation: Is ₹236 Still Dreamy?
Current Metrics:
- EPS (FY25): ₹12.28
- P/E: 19.2x
- ROE: 24.2%
- OPM: 7%
- Debt: Minimal
- Book Value: ₹56.5
- Dividend: ₹2.00
Let’s de-hype it.
⚙️ Base Case Valuation
- FY26 EPS = ₹13
- Fair P/E = 20x (growth + low asset model)
- 🎯 FV = ₹260
📉 Bear Case
- EPS = ₹12
- P/E = 15x (margin contraction risk)
- 🎯 FV = ₹180
🚀 Bull Case
- Lounge usage + monetization = EPS ₹15
- P/E = 25x
- 🎯 FV = ₹375
🧮 EduInvesting Fair Value Range = ₹180 – ₹375
Current Price: ₹236 = Mid-zone, but no longer at a discount.
7️⃣ Risk Terminal: Why Stock Crashed
- 💸 Pricing pressure from banks
- 📉 Falling margins despite rising revenue
- 👻 FII exit + promoter trimming = confidence drop
- ✈️ Travel plateauing post revenge-tourism boom
- 🧾 Still reliant on very few clients for bulk of revenue
Green shoots?
- Revenue still growing
- ROCE/ROE strong
- Tech platform is scalable
- No debt = survival assured
🛬 Final Call: Lounge Entry But No Runway for Stock Yet
Dreamfolks isn’t a broken company — but it’s no longer a growth rocket either.
It went public with the promise of being the “tech disruptor” of airport services. But it’s stuck in margin purgatory, client over-dependence, and limited pricing power.
If you bought at ₹500, this feels like a crash landing.
If you’re entering at ₹236, you’re still on a delay-prone tarmac.
☕ Bottomline: Great for airport chill. Not so much for portfolio thrill.
✍️ Written by Prashant | 📅 June 20, 2025
Tags: Dreamfolks, airport services, B2B2C tech, lounge aggregator, post-IPO fall, EduInvesting, Nifty smallcap
