DreamFolks Services Limited (NSE: DREAMFOLKS), India’s leading travel and lifestyle services aggregator, announced its financial results for the third quarter and nine months ended December 31, 2025. The company reported a period of significant strategic transition, marked by aggressive international acquisitions and a pivot toward direct hospitality operations, even as legacy domestic lounge business dynamics weighed on immediate financial performance.
The company reported revenue from operations of INR 534.5 million for the third quarter of FY26. While the company faced headwinds in its traditional domestic business, management characterized the quarter as a “transformative milestone” focused on building a diversified global platform.
Financial Performance Overview
For the nine-month period (9M FY26), DreamFolks recorded consolidated revenue of INR 6,079 million, a decrease from INR 9,777 million in the corresponding period of the previous fiscal year. Gross profit for the nine months stood at INR 804 million with a margin of 13.2%, compared to INR 1,150 million (11.8% margin) in 9M FY25.
Key financial metrics for the period ended December 31, 2025:
Revenue from Operations (9M FY26): INR 6,079 million
Adjusted EBITDA (9M FY26): INR 384 million, reflecting a margin of 6.3%
Profit After Tax (9M FY26): INR 246 million
Cash and Cash Equivalents: INR 1,295 million
Net Worth: INR 3,262 million, representing a 14.5% year-on-year increase
The company’s Adjusted EBITDA for the third quarter was a loss of INR 76.5 million, which the company attributed to ongoing business transitions and non-cash ESOP expenses.
Strategic Acquisitions and Diversification
During the quarter, DreamFolks executed two pivotal acquisitions intended to broaden its service capabilities and geographic reach. The acquisition of Easy To Travel (ETT) is designed to accelerate international expansion by providing access to a technology-enabled distribution network across 100+ countries and 500+ airports.
Simultaneously, the company moved into direct hospitality operations through the acquisition of Ten11 Hospitality. This marks a shift toward vertical integration, allowing DreamFolks to own and operate premium railway lounge infrastructure. Currently, the company operates lounges in Chennai and Mumbai, with a third location in Vadodara scheduled to launch shortly.
Liberatha Kallat, Chairperson and Managing Director of DreamFolks, stated that these moves provide direct control over service quality and margins while positioning the company to benefit from India’s railway modernization projects, such as the Amrit Bharat Scheme.
Business Outlook and Growth Drivers
Despite the impact of legacy domestic lounge volume shifts, the company reported a 200% year-on-year surge in global lounge transaction volumes. This growth is supported by a diversified service portfolio that now includes 20+ premium offerings such as golf, wellness, airport transfers, and highway dining.
The company also launched DreamFolks Club 2.0, a B2C membership platform aimed at expanding its addressable market beyond its traditional B2B banking and enterprise clients. The platform utilizes a machine learning-driven orchestration system to offer personalized benefit programs.
Industry and Macro Context
DreamFolks is operating against a backdrop of rising premium travel demand. The global airport lounge market is projected to grow at a CAGR of 14.1% from 2026 to 2035, with the Asia-Pacific region currently accounting for 30% of the market. In India, the railway sector is seeing significant investment, with approximately INR 2.8 lakh crore in capital expenditure allocated for FY26-27.
Management highlighted that the average spend per credit card in India continues to rise, which remains a critical driver for lounge access eligibility and the company’s core business model. As of December 2025, credit cards in circulation in India reached 115.8 million, up from 108.1 million a year prior.
Reasons to Pass on DREAMFOLKS
- Nine-month revenue decline: Consolidated revenue fell sharply year over year, highlighting pressure on the core business.
- Loss-making quarter: Q3 adjusted EBITDA turned negative due to transition costs and ESOP expenses.
- Domestic lounge weakness: Legacy India lounge volumes declined, weighing on near-term earnings.
- Earnings volatility during transition: Strategic pivot is creating short-term profitability uncertainty.
- Acquisition execution risk: Recent international and hospitality acquisitions add integration risk.
- Higher fixed-cost exposure: Vertical integration into lounge operations increases operating leverage.
- Expansion-led margin pressure: Near-term margins are impacted by growth investments and restructuring costs.
- Unproven new initiatives: B2C membership platform and global expansion remain early-stage.
- Reliance on card-linked demand: Business performance remains closely tied to credit-card usage trends.