May be, but then its a great opportunity for long term believers of this story to enter!
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My two cents on this company
Let’s see the company’s business model to understand a bit more detail.
- Dream Folks has created a platform where it has integrated card providers and lounge players, delivering comprehensive information to end clients – the cardholders – regarding their airport activities and lounge utilization. So the revenue is derived from card providers and corporate clients, structured as a fee per passenger utilizing the services.
- Due to its affiliations with multiple airport lounge operators across India, the card provider enjoys convenient accessibility to these lounges. Likewise, the lounge operators are inclined to partner with the company due to the substantial volume it brings to their establishments.
While this is a network effect model where they bring volume as they have access to 95% of the cardholder who utilize airport services.
But the Concern is:
- The company’s lack of pricing power becomes evident when observing recent results, both from the perspective of lounge operations and card providers.
- They provide nothing unique regarding technology as they act as mediators. Since they are the first mover in this industry, they are enjoying the market, and also the industry size is small as and when the industry becomes lucrative and grows, we will see a new player joining and disrupting the company.
The industry is experiencing growth exceeding 50% due to favorable market conditions. However, it’s important to note that this industry’s growth relies heavily on credit card providers offering incentives to encourage credit card usage. As the growth continues, there will likely be increased pressure on these players to reduce costs, considering this expense is a customer acquisition cost for card providers.
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"Dreamfolks says
Being pressurized from airport operators since last 2 years for lounge biz.
We are small players, Authority will not be supportive of us, hence have not filed any complaint"
So, Adani is pouring cement over their moat?
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“Tough times ahead for Dreamfolks—it’s a make-or-break moment. They’ll either rise as winners or get lost in the competition.”
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Any business which is stuck between a powerful buyer (airport operator) and a powerful seller (banks) will be subjected to such pressures…so I am bit surprised with Company crying about it. They should have seen it coming and should have made plans to counter it (not sure what that can be, in such cases 
). When you are a middleman, you always carry the risk that either of the parties can take away your business by backward/forward integration strategy. If not, they can surely squeeze you with the sword hanging on your head.
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Adani entered the game
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Moat is very very important. It has to be a strong niche moat. Hence investing in real tech is important
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Significant stock price fall earlier indicated something was structurally going wrong. News came few months later. I guess that’s where tecnical analysis play a role for small investors who don’t have access to insider news.
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@Niral_Maru
I got trapped in it and almost lost 60 percent of my investment. What technical tools to follow for exit ? Pls recommend.
Fundamental tool: There was a change more than a year back which large banks (credit card issuers) made to how people can use the credit card, based on some conditions being met.
Technical tool: 12% Stop loss, That way you never lose more than 12% on a position.
10/20/50/ EMA breaks depending upon your time frame and volatility of the market.
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