DREAMFOLKSNSEMay 28, 2025

Dreamfolks Services Limited

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10analyst exchanges

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Management on call

Liberatha Kallat

CHAIRPERSON AND MANAGING DIRECTOR

Balaji Srinivasan

EXECUTIVE DIRECTOR AND CHIEF TECHNOLOGY OFFICER

Sandeep Sonawane

CHIEF BUSINESS OFFICER

Shekhar Sood

CHIEF FINANCIAL OFFICER

Key numbers — 40 extracted

INR 1,292 crore

folks handled these challenges in an admirable fashion and we finished the year with a revenue of INR 1,292 crores, which is a growth of 14% from the previous fiscal year. Notably, this growth outpaced that of o

14%

mirable fashion and we finished the year with a revenue of INR 1,292 crores, which is a growth of 14% from the previous fiscal year. Notably, this growth outpaced that of our two main revenue drivers

rs,

4% from the previous fiscal year. Notably, this growth outpaced that of our two main revenue drivers, domestic air passenger traffic and number of credit cards issued both of which experienced growth

7.5%

assenger traffic and number of credit cards issued both of which experienced growth rates between 7.5% and 8% in FY '25. For some of you who are checking in to our story, i

traffic and number of credit cards issued both of which experienced growth rates between 7.5% and 8% in FY '25. For some of you who are checking in to our story, it is impo

11.6%

cards and modify the program to focus on spend-based usage has resulted in gross margins to reach 11.6% in FY '25. We ensured we remained within our previous communicated guidance of 11% to 13%. We b

11%

ins to reach 11.6% in FY '25. We ensured we remained within our previous communicated guidance of 11% to 13%. We believe that with the addition of newer services with better margin profile, this coul

13%

reach 11.6% in FY '25. We ensured we remained within our previous communicated guidance of 11% to 13%. We believe that with the addition of newer services with better margin profile, this could see a

the existing lounge services while exponentially adding other new services, which currently form 7% of our revenue. Our aspiration is to scale this contribution up to a third of the revenues in the

12%

this is well supported by strong industry tailwinds. India's travel industry is likely to grow at 12% to 15% annually for the next 5 years, with domestic travel increasing at 12% to 13%, and internat

15%

well supported by strong industry tailwinds. India's travel industry is likely to grow at 12% to 15% annually for the next 5 years, with domestic travel increasing at 12% to 13%, and international t

18%

with domestic travel increasing at 12% to 13%, and international travel at an accelerated rate of 18% to 20% due to the rising short-haul destinations. Also, Visa applications in India rose by 11% in

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Guidance — 20 items

Diwakar Pingle

opening

“This conference call is being recorded, and the transcript along with audio of the same will be made available on the website of the company and exchanges.”

Liberatha Kallat

opening

“We ensured we remained within our previous communicated guidance of 11% to 13%.”

Liberatha Kallat

opening

“We believe that with the addition of newer services with better margin profile, this could see an uptick over the medium term.”

Liberatha Kallat

opening

“We are now at a point where I see good stability coming through and there are several factors which gives me the confidence in our ability to achieve promising and sustainable growth in the medium term.”

Shekhar Sood

opening

“Gross profit increased to INR 150 crores, up from INR 137 crores in FY '24, while achieving gross margin of 11.6% in FY '25, in-line with our given guidance of 11% to 13%.”

Shekhar Sood

opening

“Adjusted EBITDA for FY '25 was INR 102 crores and adjusted EBITDA margin was 7.9%, in-line with the guidance of 7% to 9%.”

Harshit Khadka

“Sir, what would be your top line growth and margins look like for the next year?”

Sandeep Sonawane

“See, I think we cannot give you in terms of the actual number for the next year.”

Sandeep Sonawane

“But I think Liberatha did mention about the guidance that we have given for the next 5 years.”

Balaji Srinivasan

“If we typically would show the name of a client, it will be basically 100% of the portfolio of that particular credit or debit or whatever product we're talking about.”

Risks & concerns — 2 flagged

But I think now, as I said, we are in a far better position to predict in terms of how the banks are going to respond to the cost pressure.

— Sandeep Sonawane

I mean, decline or maybe the flat growth in pax, which is on account of spend-based program.

— Sandeep Sonawane

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Q&A — 10 exchanges

Sir, what would be your top line growth and margins look like for the next year?

Sandeep Sonawane

See, I think we cannot give you in terms of the actual number for the next year. But I think Liberatha did mention about the guidance that we have given for the next 5 years. I think she did mention about growing the top line by 2.5x in the next 5 years. So I think I would restrict to that number. Sir, I wanted to know how your relationships with the banking partners and how effectively are you able to penetrate into the customers if you can attach a number to it? Okay. Relationship with banks, they remain very, very strong. And the proof of the pudding is, I think Bala did mention that almost

So my first question is, I mean, as you mentioned that probably we are looking at doubling the revenues over the next 5 years, it implies a CAGR growth of 15-odd-percent year-over-year. But if I just see '24 or '25, the domestic air traffic has grown by, say, closer to 8%. Our top line is up by say closer to 11%, 12%, but profit is on a flattish note. How do I take it forward in terms of the profitability over the next 5 years?

Sandeep Sonawane

So Shreyans, see, there are two, three elements which we have been consistently telling. While I understand the traffic growth is almost in the range of 8%, whereas our revenues are not 12%, but growing at 14%. At the same time, we did mention that we were at the inflection point, we wanted to invest a little bit in terms of manpower for capturing the future growth, whether it is global expansion, whether it is going and moving to different types, targeting different type of clients for which we wanted number of people because the GTM doesn't remain the same. The moment when you target the ent

Madam, my question is related to 90% of the income comes from the airport lounges. See, last year, there was no volume growth. It is INR 10.9 million versus the INR 11 million in FY '24. In spite of increasing the air passengers, and it may be due to the change in the excess benefit to cardholders. So in that connection, I would like to know what step company is taking to improve, to increase the volume because the air passenger is increasing, credit card or cardholders are increasing, but the volume is not increasing. So what specific step company is taking to increase the volume?

Sandeep Sonawane

Yes, absolutely, you're right. Volume almost remained same versus last year, that I agree. The reason you are aware that there is a lot of spend based program that is happening. However, there are two, three things that have been done at our end. One is the acquisition or getting the competition client, which Bala just mentioned, we just got and I did mention about the names of the banks who were with competition, we got them here. However, the volumes were comparatively smaller, point number one. In terms of steps, what we are taking is we are adding a lot of other services. And that is where

I have two questions. One is, I am very new to the company. So I just want to know what is the business model of Dreamfolks. How do we make money? That is question number one. And I am hearing about enterprise clients. I know that the company is the lounge operator, but I don't know about the enterprise business. So if you can please throw some light on these two.

Sandeep Sonawane

Okay. So I hope that others have patience to understand this. So how we make money is we are an aggregator. We do a lot of aggregation of all the services. So for example, all the lounges, whether it is in India or global, we aggregate these lounges. We agree on a rate with every single lounge operator. We have the agreement with them. Suppose I agree with an agreement that every single card customer goes into the lounge, I will pay the lounge operator, say, maybe INR 100. And what we do is when the cardholder who has this benefit goes and avail the facility and goes into the lounge, then I ta

My question is regarding the pay-and-use model, which you just mentioned. Can you give a brief about that like how it actually works? How much was the contribution in FY '25 in terms of percentage of revenue of this model?

Balaji Srinivasan

Yes, I think it's a very good model. See, the idea is that there are customers who tend to get limited benefits, let's say, on any of the products from the bank. So opportunity is that because of spend base or any other reason because of, let's say, the card variant that the customer has got, they may not get all the benefits that the customer would ideally like. So the idea really is that using that as an opportunity, giving the ability of the customer to purchase and actually use the benefit is really the pay-and-use model. So we have done and we are doing more and more integrations with our

Yes. So just a quick question. So correct me if I'm wrong, but even before the introduction of pay-and-use model that you discussed recently, I think if you didn't have a credit card benefit, you could pay and use the lounges, right? So can you please clarify what exactly has changed to the pay-and-use model or if I'm understanding things wrong?

Balaji Srinivasan

I think the main idea over here is that you are restricted to only those services that bank was giving complementary, and you are correct, some users were aware that you could pay-and-use for vendor complementary services would finish. The new idea over here is that we are taking the entire portfolio of Dreamfolks. And we are allowing the customers to get, first of all, exposure that they have access to such services. And they also are getting a beautiful discount that is not what they will be able to get. So the fact that they happen to be a bank's customer, and the bank is able to negotiate

So I've joined the call a little bit late, so pardon me if you have already answered this question. In this quarter, I see the finance cost is at INR 2.2 crores which was previously at a flatter level at INR 38 lakhs. So what was the reason behind that? Because I see the borrowings are reduced, but the lease liabilities have increased. So is there are reason for increasing the finance cost?

Shekhar Sood

Yes. So, as per the contract, there were few delayed payments that happened. So we have just provided for this cost, and there is no as such actual cost. And we are already in discussion with a few of the vendors to get this resolved. So it is just a provision which is made right now because as Shekhar was mentioning that we have certain clause in the contract in terms of the payment, so in terms of the delay payments kind of a thing. And so it is just a provision which is made. However, we are in discussion, and it's almost closed in terms of setting this off. And my second question is relate

So two questions from my side. Once our non-lounge business portfolio stabilizes, what sort of margins are we targeting. And secondly, our other income to seems to be on a higher side. So any particular reason for it?

Sandeep Sonawane

Yes, Shreyans. So in terms of non-lounge services, they will definitely have higher margins because obviously, these are new services, there is novelty attached to it. And we also want to skim it when we actually go to the client and sell this because this brings a lot of differentiation to the client. So yes, it will be higher. I mean, to what extent, it depends on the service. From the current lounge margins, it can be between 2% higher to as high as 10%, 15% also, higher than the current lounge margin. One is that. So, for the other income, there were a few items. One was redemption of the

I had a few questions on the business model. As I understand, because of our deep integration. We are the only company that enables access to the lounges on credit cards. And because of this, we have the highest volumes in the industry and hence, the best rates. So please correct me if my understanding is correct or wrong. And if my understanding is correct, I just wanted to understand why do some of the credit card companies despite having integration with Dreamfolks still choose to work with our competitors like Priority Pass, etc, like what is the motivation for them?

Liberatha Kallat

So Dreamfolks is actually India's largest, I would say, in terms of providing the lounge benefit or the airport benefit. Banks still giving the priority pass or the competition card is primarily for access for the global lounges, which is lounges outside India market. right? So yes, as we always said that we also now have the aspiration, and we are spread across in 120 countries in terms of network spread. So the reason of we being the market leader in India is because of the technology that we have because of the solution, the service what we rendered and that is the reason that why we are th

Thank you all for joining our earnings conference. We hope your queries have been answered. For any further queries or information, please contact our Investor Relations team at EY. On behalf of the company, I thank you all once again for your time and participation. Do take care of yourselves and goodbye. Thank you.

Management

Speaking time

Moderator

Sandeep Sonawane

Liberatha Kallat

Balaji Srinivasan

Shreyans Mehta

Shekhar Sood

Mehul Panjwani

Harshit Khadka

Niraj

Shrey Gandhi

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Opening remarks

Diwakar Pingle

Thank you. Good evening, everyone. Welcome you all to the Dreamfolks Services Limited Q4 and Full Year FY '25 Earnings Call. Today from the management, we have with us Ms. Liberatha Kallat, the Chairperson and Managing Director; Balaji Srinivasan, Executive Director and Chief Technology Officer; Mr. Sandeep Sonawane, Chief Business Officer; and Mr. Shekhar Sood, Chief Financial Officer. Please note that the company has uploaded the financial results, the investor presentation, the press release in both the stock exchanges and on the company's website. Please do note that anything said on this call, which reflects our outlook towards the future or which can be construed as a forward-looking statement must be viewed in conjunction with the risks the company faces. This conference call is being recorded, and the transcript along with audio of the same will be made available on the website of the company and exchanges. With that said, I'd like to hand over the call to Liberatha for her ope

Liberatha Kallat

Good evening, everyone, and thank you for joining us today for the Dreamfolks Services Limited Q4 and FY '25 Earnings Call. We truly appreciate your time and continued interest in our company. Earlier today, we announced our financial results for the quarter and the year ended 31st March 2025. The detailed financials, investor presentation and press release have been made available on the Stock Exchange as well as on our website. We hope you have had the opportunity to review them. Before I begin, I would like to take the pleasure to introduce you to our new CFO, Shekhar Sood. Shekhar brings in two decades of global financial leadership experience across listed entities, multinationals and high-growth companies. He has a stellar track record in strategic planning, IPO, M&A, ESG, Investor Relations and building financial resilience. You will get an opportunity to interact more with him over the coming period. FY '25 for the year of consolidation of Dreamfolks as we saw some structural c

Sandeep Sonawane

Thank you, Liberatha. As we look forward with intent and clarity, I'm pleased to share how Dreamfolks is progressing on its journey of transformation, expanding our global footprint, strengthening our client ecosystem and driving diversification with agility and purpose. Our diversification strategy continues to take shape. A notable initiative this year was the introduction of coffee at malls as a service at almost 83 outlets, like Costa Coffee, Tim Hortons, Barista and others. Given its low ticket nature, this initiative enables partner bank to extend meaningful lifestyle benefits to customers who may not meet the spend ratio required for lounge access. This not only creates a cost-effective alternative for banks while retaining customer satisfaction, but also increase their spends. Further, as these coffee outlets are widely spread across Tier 2 and Tier 3 cities, this move significantly increases Dreamfolks' presence in these geographies, which positions us very well for a sustaina

Balaji Srinivasan

Thank you, Sandeep. I'm pleased to share how our continued investment in cutting-edge technology and strategic innovation is not only enhancing our operational backbone, but is also significantly elevating the client experience across our platform with continuous new updates. Our focus has been on harnessing the power of cloud infrastructure and digital ecosystems to create a more transparent, agile and secure environment for the clients. By leveraging advanced cloud solutions, we've built a robust framework that enables real-time collaboration, seamless scalability and faster feedback integration, which are key attributes for navigating today's dynamic market conditions. In addition to the solutions that we have for the banking industry, we are also seeing good adoption of our enterprise and travel solutions over the last few quarters with multiple clients going live. Our proprietary tech platform has become a strategic tool to increase our clients' ancillary revenue, act as a differe

Shekhar Sood

Thank you, Balaji, and a very good evening to everyone. I will begin with FY '25 financial highlights. The revenue for FY '25 was at INR 1,292 crores showing a 14% increase from INR 1,135 crores in the previous fiscal year, resulting from two of our revenue growth drivers, domestic air travel and credit card volumes, which recorded a growth of 7.5% to 8%. Gross profit increased to INR 150 crores, up from INR 137 crores in FY '24, while achieving gross margin of 11.6% in FY '25, in-line with our given guidance of 11% to 13%. Adjusted EBITDA for FY '25 was INR 102 crores and adjusted EBITDA margin was 7.9%, in-line with the guidance of 7% to 9%. Company's net profit was INR 65 crores, and PAT margin was at 5.0%. The earnings per share for the full fiscal year 2025 stood at INR 12.2 compared to INR 12.6 in FY '24. As of March 31st, 2025, our net worth is INR 301 crores, up from INR 236 crores in FY '24 showing our sound financial health. And cash and cash equivalents, including investment

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