DreamFolks Q2 Results Review - Navigating Through Turbulence: Motilal Oswal

Motilal Oswal Report

DreamFolks Services Ltd. posted a revenue growth of 12.2% YoY/down 1.2% QoQ to Rs 3.2 billion below our estimate of Rs 3.5 billion. Gross profit grew 7.1% YoY/4.2% QoQ to Rs 392 million, with a gross margin of 12.4% (flat YoY/up 70bp QoQ).

Ebit margin came in at 7.0%, down 130 bp YoY/up 10 bp QoQ. Consolidated profit after tax was Rs 160 million (down 9.3% / 6.5% YoY/QoQ) below our estimate of Rs 238 million, with a profit after tax margin of 5.1%. The company’s revenue/Ebitda/profit after tax grew 10%/ 13%/14% in H1 FY25 versus H1 FY24.

We expect its revenue/Ebitda/PAT to grow 14%/0.5%/4.0% YoY in H2 FY25. We reiterate our Buy rating on Dreamfolks with a target price of Rs 520, implying a 12% potential upside.

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