Very apt explanation about Dreamfolks business…Though building platform is not that great moat but as you have explained. bringing consumer, 100% lounges and most of the card issuers of the country onboard is certainly a nice moat…
What I observed during latest concall that Ms Kallat’s very mature answers, no over promising and I think she learned lessons from the last rout on the market…one example is she cautioned about revenue growth as banks started differentiating between low and high spending consumers…and my take is that this is a wise move business wise as they can milk more from limited supply of lounges…
One more growth area they have started this quarter is tying up with nationwide salon chain…as personal grooming is catching up, this business will pick up more than golf is what my guess is…card issuers may have one more choice to offer of salon access instead of lounges…that way dreamfolks can add significant no. of touch points…On cnbc interview, Ms. Kallat also desisted from guidance about national and international revenue mix in the future…
Regarding new competitor entering the market, that most of us worried about, my guess is that as most of the lounges already choke a block , getting incremental business is going to be tough and hence not very mouth watering scenario for new entrant…and also pace of coming up of new airports and lounges is going tobe tardy…though great ROE and ROCE, scaling up will be difficult and it may be a moat in itself…competitor like priority pass is already there…
Though Aditya Birla MF and Small cap fund completely exited during this quarter, Mark Mobius has added this stock…
Uncertainity is the name of business and I’m optimistic about
how Dream’s international business and new age business like golf,salon,visa and other businesses fair in the immediate future… I have a tracking position around 550 and I think its going to be unique and exciting business…
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