MOSL: DELTA CORP (INITIATING COVERAGE)-Favorable odds-Dominating in ‘brick world’, entering ‘click world’
​Delta Corp (initiating coverage): Favorable odds; Dominating in ‘brick world’, entering ‘click world’
(DELTA IN, Mkt Cap USD0.6b, INR169, TP INR229, 36% Upside, Buy)
- Delta Corp (DELTA) is India’s only listed gaming company, with a dominant presence in Goa’s offshore casino market. It owns three of the six offshore (five operational) gaming licenses in the state of Goa. It has ~1,700 gaming positions in the state across its three offshore casinos, one onshore casino and recently commenced casino in Sikkim. DELTA has an integrated casino resort in Daman, with 1,200 gaming positions which is awaiting regulatory approval. It has also forayed into online gaming, with the acquisition of Adda52.com.
- Delta Corp (DELTA) is the leading player in India's underpenetrated gaming market. Gaming is an emerging industry in India; given its paltry size of ~USD150m (Global size of USD183b), the growth potential is huge.
- Approval of its casino in Daman is a key growth trigger for DELTA, as it would nearly double its gaming capacity (from ~1,700 currently to ~3,000) and further cement its first-mover advantage.
- M&A opportunities in the fast-growing online gaming business in India would allow DELTA to leverage its current strength and open up new avenues for growth. It recently announced the acquisition of Adda52.com, an online poker gaming website.
- We expect 35% revenue CAGR, 45% EBITDA CAGR and 62% PAT CAGR over FY17-19E. EBITDA would be driven by strong operating leverage. We initiate coverage with a Buy rating. Our target price is INR229 (30x FY19E EPS), indicating an upside of ~39%.
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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.