Over the past month, shares of DreamFolks Services Limited have fallen by more than 38 percent, and nearly 56 percent in the past six months, reflecting a prolonged downturn for the company.
As a monopoly player in its niche, concerns are now mounting over the future of its core business, with recent reports likely contributing to the decline in investor confidence. Could the company’s only revenue stream be at risk? The details are explored further in the article.
With a market cap of Rs. 895 crores, at 10:24 p.m., the shares of Dreamfolks Services Limited were trading in the red at Rs. 168.05 on BSE, down by 5 percent, as against its previous closing price of Rs. 176.9.
What’s Happening with Dreamfolks?
A few days back, senior executives from Adani Airports and DreamFolks Services Limited made significant statements highlighting growing tensions between the two companies.
Arun Bansal, CEO of Adani Airports, stated that lounge access at airports no longer requires “middlemen”, emphasising that only companies willing to disrupt themselves will thrive in a techn ology-driven environment.
Bansal added that passengers can now gain lounge access directly through Adani Airports’ digital platform, enabled by innovations from its in-house digital lab. Citing India’s fintech revolution, he noted that the elimination of middlemen is possible in such ecosystems.
In contrast, Liberatha Peter Kallat, Chairperson and Managing Director of DreamFolks Services Limited, expressed concerns over what she described as a campaign of negative publicity led by certain airport operators.
She stated that DreamFolks had attempted to remain diplomatic, but it is now time to reveal the ongoing challenges the company has been facing. According to Kallat, DreamFolks has been under sustained pressure from two major airport operators for the past two years. This pressure, she claimed, has extended to key clients like ICICI Bank and Axis Bank. She alleged that airport operators have been pressuring clients by warning them that cardholders could be denied lounge access if they choose not to engage in direct business with the operators.
In September 2024, a major disruption affected airport lounge access across India, with at least 49 lounges shut down in 34 airports. The issue stemmed from DreamFolks Services Ltd., a third-party lounge aggregator, suddenly suspending services.
This led to backlash from airport operators like Adani and GMR, who claimed DreamFolks violated service agreements. Travel Food and Services, a food and beverage master franchisee that manages the airport lounge in Kolkata and Chennai, even considered legal action. DreamFolks initially cited a “temporary disruption” and later confirmed that integration issues at Adani airports had been resolved.
Challenges & Guidance
DreamFolks is currently navigating several challenges, as major banks shifted from lounge access to spend-based models. Over 10 banking clients have already adopted this model using DreamFolks’ technology, leading to short-term pressure on volumes and margins. However, the company’s management believes these disruptions are beginning to stabilise.
Despite growth in passenger traffic and card issuance, lounge volumes have remained flat, largely due to higher spend thresholds imposed by banks Lounge services still account for 93 percent of DreamFolks’ revenue, but the company is actively working to reduce this dependence through diversification.
There remains a potential risk of further tightening by banks for spend-based access, but DreamFolks is countering this with a push into pay-and-use options and non-lounge services.
The company’s five-year roadmap aims to more than double revenue and significantly improve margins. Management remains optimistic about medium-term growth, noting “good stability” and “fair sense of visibility” for both lounge and emerging service segments.
Financials & more
Dreamfolks Services reported a marginal growth in its revenue from operations, showing a year-on-year rise of around 12 percent from Rs. 281 crores in Q4 FY24 to Rs. 314 crores in Q4 FY25. In contrast, its net profit decreased during the same period from Rs. 18 crores to Rs. 15 crores, representing a decline of about 17 percent YoY.
DreamFolks Services Limited primarily integrates global card networks operating in India, card issuers, and corporate clients, including airline companies with various airport lounge operators, transport operators and other airport service providers on a unified technology platform.
The company is the leading player in the Indian lounge aggregation industry, with 100 percent coverage in both Airports & Railways. As of Q4 FY25, DreamFolks provides access to 75 airport lounges and 14 railway lounges. In addition, the company has set a long-term goal of expanding its airport lounge network to 295 lounges by 2040.
Written by Shivani Singh
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