Dreamfolks Services Limited — Q3 FY26 earnings call

Call held 9 Feb 2026

Management summary

Dreamfolks Services reported a challenging Q3 FY26 with revenue declining to INR 53.4 crores and Adjusted EBITDA turning negative INR 7.6 crores, primarily due to the recalibration of its domestic lounge business. Despite near-term headwinds, the company highlighted strategic acquisitions of Ten11 Hospitality and Easy To Travel, along with the launch of DreamFolks Club 2.0, as pivotal steps towards long-term growth and diversification. Management expressed confidence in future growth from railway lounges and global expansion, projecting significant revenue potential and positive cash flow within 2-3 quarters.

Highlights

  • Global lounge transaction volumes increased by approximately 80% quarter-on-quarter and nearly 200% year-on-year.

  • Net Worth as of December 31, 2025, stood at a healthy INR 326 crores, up 14.5% compared to the same time last year.

  • Cash in hand was INR 129 crores, providing significant financial flexibility for strategic initiatives.

  • Railway lounge business potential is projected at INR 500 crores in the next 5 years with an EBITDA margin of 9-10%.

  • Global business opportunity is projected at INR 500-550 crores in the next 2 years with an EBITDA margin of 9-10%.

Concerns

  • Revenue for Q3 FY26 was INR 53.4 crores, a significant decline of -84.29% YoY from INR 340 crores in Q3 FY25.

  • Adjusted EBITDA for Q3 FY26 was negative INR 7.6 crores, compared to INR 25.8 crores in Q3 FY25, primarily due to domestic lounge business recalibration.

  • PAT for Q3 FY26 was negative INR 7.9 crores, a decline of -146.15% YoY from INR 16.9 crores profit in Q3 FY25.

  • 9 Months FY26 Revenue was INR 608 crores, down -37.83% YoY from INR 978 crores in 9M FY25.

Key financials

3 periods

Headline

  • Net Worth (Dec 31, 2025)
    ₹326 Cr
    YoY +14.5%
  • Cash in Hand (Dec 31, 2025)
    ₹129 Cr

Q3 FY26

  • Revenue
    ₹53.4 Cr
    YoY -84.3%
  • Gross Profit
    ₹4.6 Cr
  • Gross Margin
    8.6%
  • Adjusted EBITDA
    ₹-7.6 Cr
    YoY -129.4%
  • PAT
    ₹-7.9 Cr
    YoY -146.2%

9M FY26

  • Revenue
    ₹608 Cr
    YoY -37.8%
  • Gross Profit
    ₹80.4 Cr
  • Adjusted EBITDA
    ₹38.4 Cr
    YoY -50.1%
  • PAT
    ₹24.6 Cr
    YoY -50.9%

What they filed

Q1 FY27: revenue down 88.8%, net profit down 166.7% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue317 340 314 349 206 −35%53 −84%53 −83%39 −89%
EBITDA23 23 20 27 12 −48%-14 −161%-22 −210%-21 −178%
Net profit16 17 15 21 11 −31%-8 −147%-13 −187%-14 −167%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Global Lounge Business
    68% Contribution to Revenue (Q3 FY26)

Capital allocation

high confidence
  • Capex Capex disclosed
    • Railway lounge setup cost (furniture, fixtures, office equipment) ₹1 Cr
    So if you talk about in terms of cost, so then it is nearly INR 1 crores to INR 2 crores. That is the -- depending on the size of the lounge. So that is the range that is there.
  • M&A Ten11 Hospitality Acquisition · Integrated

    Secured direct ownership and operational control of premium railway lounge infrastructure at strategic locations including Chennai, Mumbai, and Vadodara.

    Our inorganic growth strategy, anchored by the acquisitions of Ten11 Hospitality and Easy To Travel, represents a pivotal step in DreamFolks' evolution into a fully integrated travel and lifestyle experiences platform.
  • M&A Easy To Travel (ETT) Acquisition · Integrated

    Accelerating international expansion and advancing vision of creating a seamless, globally integrated mobility ecosystem, adding well-established international footprint and technology-led distribution platform.

    Our inorganic growth strategy, anchored by the acquisitions of Ten11 Hospitality and Easy To Travel, represents a pivotal step in DreamFolks' evolution into a fully integrated travel and lifestyle experiences platform.
  • Liquidity Cash ₹129 Cr Providing significant financial flexibility to execute strategic initiatives.
    We closed the quarter with cash in hand of INR 129 crores, providing us with significant financial flexibility to execute our strategic initiatives.

Guidance & targets

Revenue

  • Railway Lounge Business Potential Revenue · next 5 years · Medium confidence INR 500 crores
    I would say that the business potential in railways would be somewhere around, I would say, INR500 crores in next 5 years' time.

    — Liberatha Kallat

  • DreamFolks Club Revenue Revenue · next 2 to 3 years · Medium confidence INR 100 crores
    somewhere it would be maybe around INR100 crores in next 2 to 3 years.

    — Liberatha Kallat

Margin

  • Railway Lounge EBITDA Margin Margin · implied with revenue potential · Medium confidence 9-10%
    I would say that the EBITDA would be somewhere between 9 to 10 for railway.

    — Liberatha Kallat

Cash Flow

  • Cash Burn Cessation Cash Flow · a couple of quarters · High confidence Stop
    in a couple of quarters, yes, the cash burn will stop, and we will actually be positive -- cash positive in 2 to 3 quarters.

    — Liberatha Kallat

  • Cash Positive Status Cash Flow · 2 to 3 quarters · High confidence Cash Positive

    — Liberatha Kallat

Profitability

  • Railway Lounge ROE Profitability · Medium confidence 15-18%
    Yes. So like it -- again, it depends on different, different lounges. But yes, between 15% to 18%, this is what we expect.

    — Shekhar Sood

Market context

  • Global Business Opportunity Revenue · next 2 years · Medium confidence INR 500-550 crores
    I would say that in next 2 years, I would say, I would say the business opportunity would be somewhere around INR500 crores to INR550 crores.

    — Liberatha Kallat

  • Global Business EBITDA Margin Margin · implied with revenue potential · Medium confidence 9-10%
    same around 9% to 10% EBITDA for the global as well.

    — Liberatha Kallat

What to watch in Q4 FY26

Cash Flow Status

2-3 quarters
Current Cash burn, negative EBITDA
Target Cash positive

Why it matters

Achieving cash flow positivity is essential for financial stability and funding growth initiatives without external capital.

in a couple of quarters, yes, the cash burn will stop, and we will actually be positive -- cash positive in 2 to 3 quarters.

Risks & concerns

  • Recalibration of domestic lounge business

    high

    The ongoing recalibration of the domestic lounge business primarily impacted Q3 FY26 Adjusted EBITDA and PAT, leading to negative figures.

    Management acknowledged

  • Temporary decline in top line

    high

    Profitability was impacted due to a temporary decline in top line, though the company asserts its balance sheet remains strong.

    Management acknowledged

  • Near-term headwinds

    medium

    Despite near-term challenges, management expressed confidence in the company's ability to adapt and convert challenges into long-term opportunities.

    Management acknowledged

Q&A highlights

3 direct, 2 evasive
Combined revenue and EBITDA outlook for railway and global businesses Partial
If I really understood clearly that in 2 to 3 years' time, putting global and the slow growth of railways will be somewhere we will be top line about INR500 crores with a 9% to 10% EBITDA that is about INR45 crores to INR50 crores. Is that the right thing that I understood correctly? ... 4 to 5 years, yes.

Analyst attempted to consolidate management's individual guidance for railway and global segments, and management corrected the timeline for this combined projection, indicating a longer horizon for the combined INR 500 crore target.

Asked by Muralidhara Reddy

Promoter confidence and potential increase in shareholding Evasive
Right now, I can't comment on that. But yes, there is some discussions going on.

Analyst probed a high-signal topic regarding promoter confidence and potential shareholding increase given the current valuation, to which management gave a non-committal response, indicating ongoing internal discussions.

Asked by Vijay Kumar S.

Global lounge business contribution to revenue and competitive landscape Direct
So for the current quarter, it stands at 68%. ... So the 2 players are Priority Pass, which is Collinson Group and the other one is Dragonpass.

Management clarified the significant contribution of global lounge business (68%) to current revenue and identified key competitors, providing context for the company's international expansion strategy.

Asked by Priyadarshan Banjan

Capex and Return on Equity (ROE) for railway lounge business Direct
So if you talk about in terms of cost, so then it is nearly INR 1 crores to INR 2 crores. ... Yes. So like it -- again, it depends on different, different lounges. But yes, between 15% to 18%, this is what we expect.

Management provided specific financial details for the new railway lounge vertical, including the per-lounge capex and expected ROE, which are crucial for assessing the profitability of this strategic expansion.

Asked by Marutinandan Sarda

Cash burn and timeline to become cash positive Direct
in a couple of quarters, yes, the cash burn will stop, and we will actually be positive -- cash positive in 2 to 3 quarters.

Management provided a clear timeline for achieving cash flow positivity, addressing concerns about the current negative EBITDA and PAT, which is a key indicator for financial health.

Asked by Marutinandan Sarda

Overall revenue and EBITDA projection for FY28 Evasive
I will not be able to give you the exact figures right now. But for sure, if you give us some time, we will actually give you the right outlook maybe in -- maybe by next quarter.

Analyst sought a long-term consolidated financial outlook, but management deferred, indicating that a more comprehensive outlook might be provided in the next quarter, leaving investors to await further clarity.

Asked by Muralidhara Reddy

2 min read 5 chapters

Detailed narrative

Strategic Acquisitions for Ecosystem Expansion

Dreamfolks completed two significant acquisitions: Ten11 Hospitality and Easy To Travel (ETT). Ten11 provides direct ownership and operational control of premium railway lounge infrastructure, with Chennai already operational and Mumbai commencing operations. ETT is aimed at accelerating international expansion, adding a global footprint and technology-led distribution platform to build a seamless mobility ecosystem.

Railway Lounge Business as a New Growth Vertical

The company is strategically expanding into the Indian Railways ecosystem, aligning with the government's Amrit Bharat Scheme for station redevelopment and a significant capex outlay of 2.78 lakh crore rupees. Management projects a business potential of INR 500 crores in the railway segment over the next 5 years, with an expected EBITDA margin of 9-10%. Each new railway lounge is estimated to require INR 1-2 crores in capex and yield an ROE of 15-18%.

Global Business Driving Transaction Volumes

Dreamfolks reported a substantial increase in global lounge transaction volumes, up approximately 80% quarter-on-quarter and 200% year-on-year. The global business contributed 68% to the current quarter's revenue. Management anticipates this segment to generate INR 500-550 crores in revenue over the next 2 years, maintaining an EBITDA margin of 9-10%, with a strategic focus on the Middle East and Southeast Asia markets.

DreamFolks Club 2.0 and Lifestyle Offerings

The company launched DreamFolks Club 2.0, evolving its B2C offering into a comprehensive lifestyle access platform that includes global lounge access, private social clubs, golf, and wellness. These lifestyle offerings are gaining client traction and have gone live with major banking and enterprise clients, with a projected revenue potential of INR 100 crores in the next 2-3 years.

Q3 FY26 Financial Performance and Outlook

Dreamfolks reported Q3 FY26 revenue of INR 53.4 crores, a significant decline from INR 340 crores in Q3 FY25, primarily due to the ongoing recalibration of its domestic lounge business. The quarter saw a negative Adjusted EBITDA of INR 7.6 crores and a net loss of INR 7.9 crores. Despite these near-term headwinds, the company maintains a strong balance sheet with INR 129 crores cash in hand and a net worth of INR 326 crores, and expects to stop cash burn and become cash positive within 2-3 quarters.

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