Dreamfolks Services Ltd's Rating upgraded to 'CRISIL BBB/Positive'

CRISIL Ratings has upgraded its rating on the long-term bank facility of Dreamfolks Services Limited (DSL) to 'CRISIL BBB/Positive' from 'CRISIL BBB-/Stable'.

The upgrade reflects the improved business risk profile on the back of healthy recovery in operating income and operating margin in fiscal 2022. Operating income recovered to Rs.282.53 crore in fiscal 2022 (as against Rs.105.67 crore in fiscal 2021 and Rs.365.91 crore in fiscal 2020). Further, in the current fiscal, company has already achieved revenue of Rs.331.5 crore during H1-FY23 and is expected to clock revenue of around Rs 600 crore for full year fiscal 2023. The healthy growth in revenue would be supported by increased air travel post Covid-19, addition of customers and lounges over the years as well as increased customer awareness for availing airport lounge facilities. Operating margin has recovered to 11.9% during H1-FY23 and is expected to be around 11-12% going ahead. Financial risk profile continues to remain strong supported by a strong networth (expected at over Rs.125 crore as on March 31, 2023), a healthy capital structure (gearing expected to be around 0.01 time as on March 31, 2023), and strong debt protection metrics (interest cover and net cash accruals to adjusted debt (NCAAD) expected to be around 50 times and over 50 times, respectively, for fiscal 2023). The positive outlook reflects the expected strong growth in revenue along with recovery in operating margin which will result in generation of strong net cash accruals.

The rating reflects DSL's established position in providing lounge services, backed by healthy relationships with clients and lounge partners, and its healthy financial risk profile and healthy liquidity profile. These strengths are partially offset by risk to timely renewal of contracts with lounge partners and clients, and client concentration risk.

Shares of Dreamfolks Services Limited was last trading in BSE at Rs. 379.70 as compared to the previous close of Rs. 401.50. The total number of shares traded during the day was 15699 in over 1282 trades.

The stock hit an intraday high of Rs. 403.95 and intraday low of 377.05. The net turnover during the day was Rs. 6084870.00.

Source : Equity Bulls

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