Investors of Dreamfolks Services have every reason to celebrate their decision to invest in the company's IPO. Since its listing, the company's stock has consistently maintained an upward trajectory, never falling below its IPO price.
Dreamfolks Services is the country's largest airport service aggregator platform and has no listed peers at the bourses. The company facilitates consumers' access to airport-related services like lounges, food and beverages, spas, meet-and-assist airport transfers, transit hotels or nap room access, and baggage transfer services.
Its asset-light business model integrates global card networks operating in India, credit card and debit card issuers, and other corporate clients in India, including airline companies with various airport lounge operators and other airport-related service providers, on a unified technology platform.
On September 6, 2022, the company's shares made their debut on Indian stock exchanges at a price of ₹508 per share, a 56% premium compared to the IPO price of ₹326. Finally, the stock finished the first day with a listing gain of 41.8% at ₹462.4.
In the last three months, the stock has zoomed by 79%, growing from ₹435 to ₹775.95. Moreover, investors who bought shares during the IPO and remain invested to date have witnessed a stellar gain of 138%.
According to projections made by Equity 99, a leading equity research and portfolio advisory firm, the stock still holds significant potential for further growth.
"The company has entered into a strategic collaboration with Plaza Premium Group to include more than 340 Plaza Premium Lounges in more than 70 major international airports into the DreamFolks global lounge network, offering an enhanced travel experience to its members worldwide starting July 24, 2023."
This collaboration will facilitate extensive coverage of Plaza Premium Lounges across four continents, including key travel hubs such as Australia, Canada, the United Kingdom, Hong Kong, Florida, Brazil, Italy, Indonesia, Malaysia, Singapore, Dubai, Saudi Arabia, Jordan, and more," said Equity 99.
The company has received an approval from board of directors for the acquisition of 60% equity shares of Vidsur Gols (Vidsir), which will subsequently become a subsidiary of the company. The primary objective behind this acquisition is to facilitate business expansion and growth opportunities.
Dreamfolks Services holds a dominant position as the largest airport lounge access provider in India, commanding an estimated market share of over 95% for all India-issued card-based access to domestic lounges.
It has extensive coverage across 54 operational airport lounges, representing 100% of airport lounges in India. Given the monopolistic nature of its business and the promising growth potential in the air travel and credit card segments, the company is expected to perform well in the upcoming quarters, the research firm highlighted.
Equity 99 has given a 'buy' rating on the stock and set a target price of ₹1,000 apiece, which reflects an upside potential of 29% from the stock's current market price.
In terms of financials, the company reported a nearly three-fold jump in its consolidated net profit to ₹25 crore for Q4 FY23, ending FY23 with a total net profit of ₹73 crore, a significant improvement compared to a net profit of ₹16 crore recorded in FY22.
The consolidated revenue from operations surged by 140% YoY to ₹238 crore in Q4FY23. It concluded FY23 with a total revenue of ₹773 crore, reflecting a remarkable 175% YoY increase.
On the financial ratio front, the company has zero debt, Trendlyne data showed, while it had an ROE and RoCE of 46.28% and 59.41%, respectively, in FY23.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.
