Dreamfolks Services Ltd Q2FY25 earnings call summary:
- Highway dining: Benefits based on consumer cards. Issuer will communicate to consumer about outlets where cards can be used.
- Highway dining service is an asset lite model where it is managed by third party.
- Airport lounge footfall is 5.29 Mn for H1FY25.
- At least a year until banks will lift restrictions from their credit cards to spend more on lounge services. Company management unable to comment to revenue commitments from the past.
- Recent technical glitch: Ongoing international integration with a client due to which there was a glitch. Upgrade cycle issue.
- Increase in trade receivables by 140Cr. This was due to cost increase from client. Client exhausted budget for customer expenses.
- Don’t want to be dependent on one client or one service. Long gestation period to see improving revenue from corporate (4-5 yrs).
- Decline seen in customers using lounge services. One bank increased its spending limit on lounge services from Rs. 35,000 to Rs. 75,000.
- Gross margin guidance will remain unchanged i.e. 20%. Will it be reduced? Here management refused to comment.
- Company is providing benefits to card holders. However, service also depends with airlines, corporate, OTS. However, majority sales are from complimentary card holder. Amazon was also selling cards with 25% discount to access the lounge.
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