DreamFolks - Landing Gear Retracted; Charting A Steep Trajectory: Motilal Oswal Initiates Coverage With A Buy

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Motilal Oswal Report

DreamFolks Services Ltd. is India's leading airport services aggregator and tech platform, connecting lounges and premium airport facilities with users of bank credit/debit cards. The company holds a 75% plus volume market share in domestic airport lounges and it is the only player with 100% coverage of airport lounges.

DreamFolks Services is the go-to partner for banks seeking to provide complimentary access to paid airport services lounge and this is a highly profitable and asset light model.

We expect the company to benefit from the rapid growth in the Indian airline industry, driven by competitive fares, rising leisure travel, new airports, and government push.

Further, the increasing adoption of bank card (with lounge access as a key benefit) is boosting the pay-per-use revenue model of DreamFolks. This should help it deliver a strong 20% revenue/28% profit after tax compound annual growth rate over FY24E-26E, despite a high base, near-term setbacks due to revised airport charges, and a shift to the spending-based model.

We see venturing into international markets as a lucrative long-term opportunity carrying significant potential value.

We initiate coverage on the stock with a 'Buy' rating at a target price of Rs 650, implying 34% potential upside.

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Motilal Oswal DreamFolks Initiating Coverage Note.pdf

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