Synopsis:
Dreamfolks Services Ltd, slipped 5 percent and hit its lower circuit after announcing the discontinuation of domestic airport lounge services for clients. The company stated that other domestic services and global lounge operations remain unaffected, while discussions with clients on alternative value propositions are ongoing amid rising competition.
Aviation services stock dropped sharply and hit its 5 percent lower circuit on Wednesday after announcing a material development impacting its domestic airport lounge operations. Investor sentiment weakened as the move follows a series of contract terminations in recent weeks, heightening concerns about the company’s business continuity in the domestic segment.
Dreamfolks Services Ltd, with a market capitalization of Rs. 697.84 crore, opened at Rs. 131 compared to its previous close of Rs. 137.85. The stock fell to its intraday low of Rs. 131, locking in the 5 percent lower circuit limit.
What’s the News?
The company informed exchanges that domestic airport lounge services provided to its clients have been discontinued effective immediately, with the impact described as material. However, it clarified that other domestic services and its international lounge business continue as usual.
In a statement, the company reiterated, “Contracts with our clients remain active and the discussions with the clients on alternate customer value propositions are in progress.” The development comes just days after Travel Food Services ended its agreement with Dreamfolks, under which the company acted as an aggregator for banks and networks to facilitate lounge access across multiple locations.
Earlier on August 29, Adani Digital, Semolina Kitchen, and Encalm Hospitality had also indicated their intentions to discontinue certain services with Dreamfolks.
Sources cited company CMD Liberatha Peter Kallat as saying that clients were being pressured by competitors to opt out of existing contracts, while also revealing that Dreamfolks had indirectly received acquisition offers. She further alleged that airport operators were behind such pressures, though without naming them.
Following her remarks, Adani Airports CEO posted on LinkedIn, stressing that airport lounge access no longer requires intermediaries and can be managed directly by operators.
The company currently operates 76 lounges with full coverage in India, maintaining a domestic-to-international mix of 77:23. Its long-term target is to expand to 295 lounges by 2040.
Q1FY26 Operational Highlights
During the quarter, Dreamfolks added 8 enterprise clients, while over the last year it onboarded more than 40 enterprise clients and 8 banking clients. On the global front, 50 new lounges were added, taking the total count to over 850 worldwide.
The company also expanded its services by adding 64 Coffee @ Mall touchpoints and 60 global golf touchpoints in Q1FY26, taking the global total to more than 800. Within India, golf touchpoints now stand at 64.
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Financial Snapshot
On a sequential basis, revenue rose from Rs. 314 crore in Q4FY25 to Rs. 349 crore in Q1FY26, marking an increase of 11.1 percent. Operating profit improved from Rs. 20 crore to Rs. 27 crore, higher by 35 percent. Profit before tax advanced from Rs. 21 crore to Rs. 28 crore, up 33.3 percent, while net profit climbed from Rs. 15 crore to Rs. 21 crore, registering a growth of 40 percent.
On a yearly basis, revenue increased from Rs. 321 crore in Q1FY25 to Rs. 349 crore in Q1FY26, a growth of 8.7 percent. Operating profit rose from Rs. 23 crore to Rs. 27 crore, higher by 17.4 percent. Profit before tax improved from Rs. 23 crore to Rs. 28 crore, advancing 21.7 percent, while net profit grew from Rs. 17 crore to Rs. 21 crore, up 23.5 percent.
About the Company
Dreamfolks Services operates a unified technology platform that connects global card networks, card issuers, and corporate clients—including airlines—with airport lounge operators, transport providers, and other airport service partners, enabling seamless access to travel-related services.
Written By Manan Gangwar
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