MOSL: DELTA CORP (Buy)-Upholding dominance-Two strategic investments over ten days
Delta corp: Upholding dominance; Two strategic investments over ten days; Benefits to accrue over the long term
(DELTA IN, Mkt Cap USD1b, CMP INR254, TP INR312, 23% Upside, Buy)
- Delta Corp’s subsidiary — Gaussain Software – has acquired 25% stake in Jalesh Cruises for USD10m. Gaussain Software will be the preferred partner to manage and operate the casinos/gaming centers on the cruises.
- Delta will manage the casino operations for a fixed fee payment to Jalesh Cruises. The first vessel is scheduled to sail in Apr’19 and will have 15-20 tables. In our view, revenue can be scaled up to INR25-30m/month per cruise in the future.
- Delta Corp has made another strategic investment with the acquisition of 15.52% stake in Halaplay (a fantasy sports platform) for INR155m; it also transferred its homegrown fantasy sports platform, Leagueadda.com, to Halaplay for a 4.03% stake. Following this, Delta Corp’s effective holding in Halaplay will stand at 19.55%.
- We believe that both the investments are strategic and will accrue benefits only in the long term, while upholding Delta Corp’s dominant position as a frontrunner in casino operations in the country and a leading player in the online gaming space.
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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