Release Date: November 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Dreamfolks Services Ltd (BOM:543591, Financial) reported a revenue growth of 16.2% year-on-year for the first half of FY25, indicating strong business performance.
- The company has successfully diversified its service offerings beyond airport lounges, including highway dining services and excess baggage services.
- Dreamfolks Services Ltd (BOM:543591) has expanded its client base by onboarding seven new enterprise clients from various sectors.
- The company has maintained 100% coverage at all Indian airports and expanded its lounge network both domestically and internationally.
- Dreamfolks Services Ltd (BOM:543591) has a strong balance sheet with net worth up by 35.8% compared to the same time last year.
Negative Points
- The company's adjusted EBITA margin decreased to 8.1% in Q2 FY25 from 9.4% in Q2 FY24, indicating a decline in profitability.
- Profit after tax declined to INR16 crore in Q2 FY25 from INR17.7 crore in the same quarter last year, with a margin drop to 5.1% from 6.3%.
- There has been an increase in trade receivables due to delays in client payments, affecting the working capital cycle.
- The company faces challenges in maintaining its projected 20% revenue growth due to changes in credit card spend limits and benefits.
- Employee expenses have increased significantly, impacting the company's cost structure without immediate corresponding revenue growth.
Q & A Highlights
Q: How does Dreamfolks' highway dining service differ from traditional restaurant businesses, and what marketing strategies are being employed to attract visitors?
A: Sandeep Sonawane, Chief Business Officer, explained that the highway dining service offers benefits tied to cardholder privileges, such as free meals or discounts, which are sponsored by issuers. Marketing efforts include communication through issuers and participating outlets to inform consumers about these benefits.
Q: Is the asset-light model managed by third parties or internally?
A: Giya Diwaan, Chief Financial Officer, clarified that the model is similar to their airport operations, partnering with existing food and beverage outlets on highways, with no direct investment from Dreamfolks.
Q: What is the current footfall and average ticket size in airport lounges?
A: Giya Diwaan stated that the footfall for the quarter was 2.59 million, but there isn't a specific per-passenger rate due to varied fee structures.
Q: How are changes in credit card spend limits affecting lounge access and revenue projections?
A: Liberatha Peter Kallat, Chairperson and Managing Director, noted that while changes are ongoing, it's too early to predict their full impact. The company is monitoring trends and cannot currently commit to previous revenue growth projections.
Q: What is the contribution of non-lounge segments to revenue, and what is the future outlook?
A: Sandeep Sonawane mentioned that non-lounge services currently contribute around 6.7% to revenue, with a goal to increase this to 20% over the next 4-5 years.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
