Capitaline

Results 16-Feb-23

Analysis

Dreamfolks Services

Improved profitability

Dreamfolks Services consolidated net sales increased 107.51% to Rs 204 crore in Q3FY23 compared to Q3FY22. Operating profit margin has jumped from 8.75% to 12.78%, leading to 203.14% rise in operating profit to Rs 26.07 crore. Employee cost decreased from 4.33% to 1.90%. Other expenses fell from 86.93% to 85.33%. Other direct service cost fell from 85.47% to 83.65%.

Other income rose 1,525% to Rs 0.65 crore. PBIDT rose 209.26% to Rs 26.72 crore. Provision for interest fell 9.38% to Rs 0.29 crore.

PBDT rose 217.67% to Rs 26.43 crore. Provision for depreciation rose 62.96% to Rs 0.88 crore. Profit before tax grew 228.41% to Rs 25.55 crore. Share of profit/loss were nil in both the periods. Provision for tax was expense of Rs 6.57 crore, compared to Rs 1.62 crore. Effective tax rate was 25.71% compared to 20.82%.

Minority interest was nil in both the periods. Net profit attributable to owners of the company increased 208.12% to Rs 18.98 crore.

Promoters’ stake was 67.00% as of 31 December 2022

Management Commentary by Liberatha Kallat - Chairperson and Managing Director

“Globally, air travel has bounced back like never before and we have surpassed the pre-covid numbers as well in terms of domestic air traffic in India. This growth comes on the back of opening up of borders, growing propensity to travel by air over other modes and constant upgradation of airport infrastructure to meet the growing demand. In line with this growth trajectory, the footfall in airport lounges has also been extremely strong.

With greater awareness around lounges, higher intent to spend on comfort, increasing waiting time at airports and rise in the number and size of lounges, multiple factors have played out as strong tailwinds and helped us scale great heights in a short span of time. We have always ensured that we provide the best-in-class services to our clients and make the end customer experience seamless through omni-channel modes customized to the user’s preferences. Recently launched self check-in kiosks at leading airports are perfect examples of that, with which we aim to declutter airport lounges, reduce queues and elevate the customer’s journey. We also started Web-Access for consumers to check their card benefits, utilization and self-generate lounge access QRs.

Over the course of this quarter, we increased the service offerings to our premium customers with the tie-up with Vidsur Golf, enabling them to access 40+ golf courses in the country and 250+ golf courses across APAC. Additionally, our network of railway lounges is growing at rapid pace with high quality facilities catering to an extremely large number of passengers who travel by this mode.

Coming to our financial performance, we recorded our highest ever revenue for a quarter standing at Rs. 2,040 Mn. The same metric for the nine-month period stood at Rs. 5,355 Mn, indicating a growth of 107.5% and 192% YoY respectively. Our profitability and return ratios have improved over time and our lean organization structure in tandem with our asset light mode of operations put us in a very strong position to further improve upon our margins as we scale. With a deeply integrated tech stack, strong R&D team working on future initiatives and cash generative operations, we stand on a strong footing to stay ahead of the curve and achieve our targets.

For year-to-date (YTD) results analysis

Net sales (including other operating income) of Dreamfolks Services has increased 192.10% to Rs 535.5 crore. Operating profit margin has jumped from 5.65% to 12.21%, leading to 531.18% rise in operating profit to Rs 65.39 crore. Employee cost decreased from 7.17% to 2.30%. Other expenses fell from 87.18% to 85.49%. Other direct service cost fell from 84.88% to 84.05%.

Other income rose 53.60% to Rs 1.92 crore. PBIDT rose 479.76% to Rs 67.31 crore. Provision for interest rose 32.99% to Rs 1.29 crore. PBDT rose 520.49% to Rs 66.02 crore. Provision for depreciation rose 62.26% to Rs 2.58 crore.

Profit before tax grew 600.99% to Rs 63.44 crore. Share of profit/loss were nil in both the periods. Provision for tax was expense of Rs 16.21 crore, compared to Rs 1.79 crore. Effective tax rate was 25.55% compared to 19.78%.

Minority interest was nil in both the periods. Net profit attributable to owners of the company increased 550.55% to Rs 47.23 crore.

Promoters’ stake was 67.00% as of 31 December 2022

Full year results analysis

Net sales (including other operating income) of Dreamfolks Services has increased 167.44% to Rs 282.5 crore. Operating profit margin (OPM) has turned from negative 0.36% to positive 7.98%, Operating profit for the quarter stood at Rs 22.54 crore compared to loss of Rs 0.38 crore. Employee cost decreased from 11.97% to 5.86%. Other expenses fell from 88.40% to 86.16%. Other direct service cost rose from 82.87% to 83.99%.

Other income fell 39.92% to Rs 1.49 crore. PBIDT rose 1,044.29% to Rs 24.03 crore. Provision for interest rose 90.67% to Rs 1.43 crore. Loan funds remained nil.

PBDT rose 1,574.07% to Rs 22.6 crore. Provision for depreciation rose 37.42% to Rs 2.13 crore.

Profit before tax reported profit of Rs 20.47 crore compared to loss of Rs 0.20 crore. Share of profit/loss were nil in both the periods. Provision for tax was expense of Rs 4.22 crore, compared to Rs 1.25 crore. Effective tax rate was 20.62% compared to negative 625.00%. The company reported net profit of Rs 16.25 crore compared to loss of Rs 1.45 crore.

Promoters’ stake was 100.00% as of 31 March 2022

The scrip is currently trading at Rs 386

Dreamfolks Services : Consolidated Results
Particulars	2212 (03)	2112 (03)	Var.(%)	2212 (09)	2112 (09)	Var.(%)	2203 (12)	2103 (12)	Var.(%)
Net Sales	204.0	98.31	108	535.5	183.3	192	282.5	105.63	167
OPM (%)	12.8	8.8		12.2	5.7		8.0	-0.4
OP	26.07	8.6	203	65.39	10.36	531	22.54	-0.38	LP
Other Inc.	0.65	0.04	999	1.92	1.25	54	1.49	2.48	-40
PBIDT	26.72	8.64	209	67.31	11.61	480	24.03	2.1	999
Interest	0.29	0.32	-9	1.29	0.97	33	1.43	0.75	91
PBDT	26.43	8.32	218	66.02	10.64	520	22.6	1.35	999
Depreciation	0.88	0.54	63	2.58	1.59	62	2.13	1.55	37
PBT	25.55	7.78	228	63.44	9.05	601	20.47	-0.2	LP
Share of Profit/(Loss) from Associates	0	0	-	0	0	-	0	0	-
PBT before EO	25.55	7.78	228	63.44	9.05	601	20.47	-0.2	LP
EO Income	0	0	-	0	0	-	0	0	-
PBT after EO	25.55	7.78	228	63.44	9.05	601	20.47	-0.2	LP
Taxation	6.57	1.62	306	16.21	1.79	806	4.22	1.25	238
PAT	18.98	6.16	208	47.23	7.26	551	16.25	-1.45	LP
Minority Interest (MI)	0	0	-	0	0	-	0	0	-
Net profit	18.98	6.16	208	47.23	7.26	551	16.25	-1.45	LP
EPS (Rs)*	#	#		#	#		3.1	-0.3
Notes
* EPS is on current equity of Rs 10.45 crore, Face value of Rs 2, Excluding extraordinary items.
# EPS is not annualised
bps : Basis points
EO : Extraordinary items
Figures in Rs crore
Source: Capitaline Corporate Database

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