MOSL: DELTA CORP (Buy): Firing on all cylinders
​DELTA CORP: Firing on all cylinders
(DELTA IN, Mkt Cap USD0.8b, CMP INR188, TP INR243, 29% Upside, Buy)
Gaming business stronger than ever despite demonetization
Delta Corp (DELTA) has recovered strongly from the demonetization woes, as evident from overall growth of 18.4% YoY in 1QFY18. This quarter too has so far witnessed phenomenal growth in the number of visitations on account of a relatively high number of holidays in the months of July and August. To sharpen its focus on retail footfall, the company has converted a floor dedicated to club members of DELTIN Royale to mass access to accommodate growing incremental visitors. This, in turn, significantly increases the prospects of doubling retail revenue from Deltin Royale.
The new airport at Sikkim is expected to commence operations from November 2017, post which the number of travellers is expected to increase manifold as commuting becomes less time-consuming and easier. Consequently, visitations at the Sikkim casino should increase markedly, benefiting the gaming business. The Sikkim casino, which operates at revenue of ~INR11m/month, is expected to double its revenue by FY19, reaching turnover of ~INR225m. Furthermore, the company hinted at being at the advanced stage of exploring opportunities in Nepal (may setup operations in FY19 if it deems suitable) to capitalize on increasing tourist arrivals in that country.
Overall, with growth in the Goa casino back on track and visitations in Sikkim set to gain traction, the gaming business is expected to grow at 53% YoY in FY18.
Delta Corp Limited is a holding company engaged in the operation of casino. Its segments include Real Estate, Gaming, Hospitality and Others. The Company operates its gaming and hospitality businesses under the DELTIN brand. It owns approximately three casinos in Goa, including Deltin Royale, Deltin JAQK and Deltin Caravela. It also owns approximately two hotels, including Deltin Suites and Deltin Palms in Goa. Deltin Suites has over 106 rooms, and offers facilities, including approximately two restaurants, lounge bar, spa, gym and swimming pool. Deltin Palms is a boutique hotel with over 27 rooms. It owns a 176 room five star hotel, The Deltin, located in Daman. The Deltin offers banquet facility in the area with approximately three bars; over four specialty restaurants. Its subsidiaries include Atled Technologies Private Limited and Delta Pan Africa Limited. The Company also owns and operates online poker site www.adda52.com.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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