Monopoly businesses have no or little market competition due to a single-player existence. Monopolistic enterprises benefit from economies of scale, resulting in lower average costs. Such companies usually control the market and are solo or large players in the market.
Here is a monopoly stock with more than 90% market dominance.
India’s largest airport service aggregator DreamFolks Services Ltd is engaged in improving airport experiences for travellers by employing a technology-driven platform and offers services like lounges, food and beverage, transit hotels, and many more.
In India, the company has a 68 percent market share in lounges, a 22 percent market share in exclusive airport lounges, and a 95 percent market share in card-based lounge access.
It is a Small-cap company with a market capitalization of Rs 2,979 crore. The company’s shares were trading at Rs 570 apiece on June 23. The company earns 95 percent of its revenue from lounge service charges and 5 percent from fees associated with other airport services such as food and beverages, meet and assist, airport transfers, and so on..
The company operates 1,500 touchpoints in 540 locations and 121 countries as of March 31, 2023. Additionally, the business manages 60 lounges around India. The number of lounges in India is predicted to expand at a 7 percent CAGR between 2022 to 2040. India, the world’s third-largest aviation market, Since 2008, air passengers in India have increased at a CAGR of 11.64 percent.
As the government of India promotes the UDAN plan, which focuses on airports in Tier 2 and Tier 3 cities, it is anticipated that the DreamFolks market growth would improve as passenger traffic and growth are fostered within the air travel business.
To increase revenue growth, the firm has partnered with domestic airports. And the firm has expanded its footprint in the railway industry; it presently has 10 train lounges in its portfolio and expects to add more as Indian Railways modernise. The stock has increased by 58.65 percent in the last six months ranging from Rs 362.15 to present levels.
According to financials, operating revenues increased by 174 percent from Rs 283 crore in FY 21-22 to Rs 776 crore in FY 22-23, while net profit increased by 350 percent over the same period, from Rs 16 crore to Rs 72 crore.
As per the latest shareholding pattern, the company’s promoters own 67 percent, while domestic institutional investors own 9.31 percent and Foreign institutional investors hold 11.16 percent.
Written by Omkar C
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
