Dreamfolks Services Shares Jump Over 7% As Motilal Oswal Initiates Coverage With 'Buy'

Shares of Dreamfolks Services Ltd. jumped over 7% on Wednesday after Motilal Oswal Financial Services Ltd. initiated coverage with a 'buy' rating.

The brokerage also set a target price of Rs 650 per share as it is expected to benefit from the rapid growth in the Indian airline industry, driven by competitive fares, rising leisure travel, new airports, and government pushes.

"Further, the increasing adoption of bank cards (with lounge access as a key benefit) is boosting the pay-per-use revenue model of DFS," the brokerage said.

This will help the airport services aggregator and tech platform deliver a strong revenue growth of 20% and an annual profit growth of 28% over FY24–26, "despite a high base, near-term setbacks due to revised airport charges, and a shift to the spending-based model," the brokerage said.

It also sees the company venturing into international markets as a lucrative long-term opportunity carrying significant potential value.

Shares of Dreamfolks Services rose as much as 7.33%, the highest level since Feb. 9, before paring gains to trade 3.6% higher at 10:12 a.m. This compares to a 0.1% advance in the NSE Nifty 50.

It has risen 14.94% in the last 12 months. Total traded volume so far in the day stood at 4.18 times its 30-day average. The relative strength index was at 44.09.

The three analysts tracking the company maintain a 'buy' rating, according to Bloomberg data. The average 12-month analysts' price target implies an upside of 27.9%.