DreamFolks Chairperson Refutes Concerns After Reports Say Major Clients Looking To Part Ways

Amid the reports of DreamFolks' major clients moving away which led to the company's stock taking a major hit, Chairperson and Managing Director Liberatha Kallat has denied receiving any form of communication from the clients.

"This news comes as a surprise to us. These clients have been with us from inception and we have not gotten any such notices or communication from these clients," Kallat told NDTV Profit on Friday.

DreamFolks Services Ltd.'s shares plunged over 6%, before erasing losses to rise on Friday, after reports said major clients including ICICI Bank Ltd., Axis Bank Ltd., and Mastercard were looking to move away from the global travel and lifestyle services aggregator.

The scrip plummeted 6% during trade on Friday, marking the second consecutive day of losses.

Talking about the structure of contracts, she explained that though the company works on long-term contracts, the arrangements for commercial projects are structured differently.

"It's ongoing business that we have with all our clients and the contracts are in the duration of three to five years. However, our commercial arrangements are yearly and in discussion. Everything is going on and its business as usual for us," she said.

When asked about any slowdown that the business might be seeing, the MD cited change in structure, recent incidents and a seasonal dip in traffic as well.

"In terms of change in the programme structure, which is banks giving spend-based programme, the volume has reduced. The business does not depend on lounges alone so we have other services like travel and lifestyle. These services are growing too. The traffic has slowed down but not based on our arrangements with our clients. Recent incidents have affected the overall traffic at the airports so there is a slight slowdown. It's also a seasonal slowdown," she said.

On Sept. 22 last year, DreamFolks — that offers lounge access services at several airports — had witnessed 'a temporary disruption in services' which impacted lounge access of thousands of customers of banks and card networks. Though the issue was resolved the next day, it reportedly sent the banks and card networks to explore other alternatives.

The MD attributed the disruption to purely a technical issue. "Ours is a tech-platform, the earlier disruption was because of the downtime. It was a technical error over the business," she said.

The likely disassociation of major lenders and card networks from DreamFolks, as claimed in the reports, is expected to severely hit the company's earnings. The company's bottomline was under pressure in fiscal year 2025 as well, as the net profit declined by 5% to Rs 65 crore. The revenue, however, had increased by 14% to Rs 1,292 crore.

Talking about the business and the growth numbers the investors could be looking at, she is optimistic.

"Lounges will be the major part of the business, we have grown to over 100 countries. We have other services coming up like travel, coffee, country clubs and more. We are not limited to banks as clients but also enterprises," she said. Kallat expects a 20% topline growth and margin improvement to 14-16% in the coming years.