Dreamfolks Services Ltd. is set to expand to 600 outlets in its highway dining business using an asset-light model, according to Chairperson Liberatha Kallat.
The company, which operates travel and lifestyle services aggregator DreamFolks, announced entry into the highway dining business earlier this month. DreamFolks members can avail of restaurant services on 60 key highway routes connecting cities like Delhi, Mumbai, Bengaluru, Hyderabad, Chennai and Kolkata.
"Compared to all our other services, we are very bullish about this product (highway dining business)," the managing director told NDTV Profit. "When we talk about 600 outlets, we have already signed around 400 outlets on the highway. In the next couple of weeks, we will be having around 600 outlets in our portfolio."
She highlighted that with the growing awareness about credit card benefits, the highway dining services segment would grow faster than its airport lounge service did at its launch over a decade ago.
Kallat said that the highway dining business looks set to add around 20% to the company's top line in the next couple of years. "We can say in the next two years, these services will contribute around 20% to our top line."
The top executive revealed that the company would focus on an asset-light model for expansion, focusing on partnerships with existing players.
"The way we have partnered with other operators and brands for our airport lounges, highway dining will be in a similar model. We are not going to invest in having our own outlets, right now, we are focused on building and installing our technology in all these places," she said.
Kallat projected that the company would likely maintain a gross margin of 11–13% and have an earnings before interest, taxes, depreciation and amortisation of 7–9% in the current fiscal.
"Our business model has always been such that we try to ensure that from the immediate effect, it is profitable and there's no loss. The other services we are introducing will be at higher margins compared to our ongoing lounge products," she said.
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