🔷️ DELTA CORP GAVE SMART RECOVER OF ALMOST 40% FROM LAST MONTH LOWS OF 139 ON 5th AUG’19 TO HIGH OF 200 ON 24th SEPT’19 ?
🔷️ STOCK TO CONSOLIDATE BETWEEN 175 TO 196/202 ZONE AND ANY BREAKOUT ABOVE 204 LEVELS WHICH IS EXPECTED TO HAPPEN SOONER.
🔷️ CLOSE ABOVE BREAKOUT LEVELS STOCK CAN TEST 225/240 LEVELS BY DEC’19 OR EVEN BEFORE THAT AND CAN EVEN TEST 255/270/290+ LEVELS BY JUNE OR SEPT 2020
🔷️ DELTA CORP CAN EVEN GIVE 100% RETURNS AND CAN EVEN CROSS ITS ALL TIME HIGH OF 401 IN NEXT FEW YEARS.
Old Link :
🔷️ Delta Corp Limited was incorporated in the year 1990. It is the only listed company in India engaged in the casino and gaming industry. The company is primarily engaged in gaming and hospitality segment.
🔷️ The company operates its gaming and hospitality segment under the name of Deltin. Delta Corp is the leading Gaming and casino company capturing the market through its 5 casinos located in Goa, Sikkim and an integrated casino resort in Daman.
🔷️ The company operates 1,800 gaming positions. Its subsidiaries include Delta Pan Africa Limited and Atled Technologies Private Limited. Further, they have ventured into fast-growing online gaming segment by acquiring Gauss Networks which operates an online poker site called Adda52.com, Rummy site as well as an online fantasy sports site
🔷️ In March’19 Delta Corp acquired 15.52% stake (31,994 equity shares) in HalaPlay for Rs. 15.5 Crores. Further, as a part of the deal Gaussian Software (Delta Corp’s subsidiary) will transfer their fantasy sports division for additional 4.03% shares of Halaplay.
🔷️ Halaplay is the second largest fantasy sports game after Dream 11, they have a turnover of Rs.3.5 crores with 2.2 million users at present. With the new investment in Halaplay and the craze for cricket play in India this deal can generate significant growth for Halaplay as well as Delta Corp.
🔷️ Sikkim Casino is one of the growth drivers after the opening of Pakyong Airport which has led to an increase in tourism in the state.
🔷️ The casino segment reported an Ebitda margin of 43 per cent, which is flat YoY despite the revenue loss and should report 48-50 per cent margins on a steady-state basis.
🔷️ Delta corp earnings should expand at a healthy 28% CAGR From FY20-22E, driven by a revenue CAGR of 17% to 18% and margin expansion.
REVENUE SHARE :
87% of revenue generated by Delta Corp comes from Gaming vertical.
In FY19, 89% of the gross revenue came from gaming and the rest 11% of gross revenue was from hospitality. Hospitality is a capital intensive industry which is why its share to the revenue is on the lower side and can increase gradually.
GAMING INDUSTRY IN INDIA :
🔷️ In India, the whole gaming industry, which includes lottery, horse racing, casinos, online gaming, is worth US$60 Bn. But the industry is still scattered with very less organizing.
🔷️ Delta Corp Ltd has taken the early mover advantage in the organizing the gaming industry. No one has given any focus towards gaming. There is not a single company in India, which is listed in gaming apart from Delta Corp Ltd. This is a very great advantage the company has. There is a possibility that there may be more players in the unlisted space, as for listed space there’s only Delta Corp available for investors to invest in.
🔷️ In the whole gaming industry in India, from start and till now as well, the lottery business has had a majority share. Lottery has a market of $12-$14 Bn. Horse racing has market of $250-$400 Mn. And Casinos have a market of $100-$125 Mn.
🔷️ The Casinos business has a lot of scope to grow. Entries of new players in casino business might be slow because of rules & regulations. Even after getting all the permissions and then making investments in infrastructure and the gaming equipments, it can be a lengthy process. Thus, Delta Corp has a very big advantage or has a very big opportunity and is in a nice position to grab that opportunity.
FUTURE GROWTH DRIVERS :
1️⃣ The Casino operation by Delta Corp In Hotel Marriot in Kathmandu in Naxal Region at Fair Field has Started adding revenue and FY20 would add good Growth to numbers.Also Revenue from Deltin Denzong sikkim getting added.
2️⃣ Delta also has casino in Jalesh Cruises which is doing very well and company expects to Generate revenue of Rs. 25cr to 30cr by the end of FY20 & Can Expect 15% To 20% Growth for next few years.
3️⃣ Delta corp is Generating Free cash flow and is Leader in Gaming and Casino bussiness in India.Its revenue is mainly Generated from 3 verticals Mainly – Hospitality, Online Gaming and Casino Gaming.
4️⃣ Delta Corp Performs well when Economy is doing Well or on path of Recevery.From 2016 To 2018 Stock had given superb returns of almost 300% that too in just 2 years.In Dec 2016 Stock was struggling at sub 100 levels coz of Demonetization and In Jan 2018 Stock Had Hit All time High of 401.
5️⃣ We can see such kind of Rally in stock in next 2 to 4 years as economy is expected to do well going forward.Stock can give Multibagger returns going forward.It has bigger role in Generating Revenue for Goa Tourism
6️⃣ In last 20 Months stock had corrected almost 65% from highs of 401 to make new recent Low of 139.10 and stock has Bounced back by almost 40% To 200. And currently Trading & consolidating in zone of 175-200.
7️⃣ There is definitely a lot of scope to the company as it is involved in an under penetrated industry.
8️⃣ The gaming industry has a mere 1% penetration in India. So, the company will definitely has an early mover advantage.
The financial numbers of the company look very strong. YoY growth is good.
🔷️BIGGEST RISK – GOVERNMENT POLICIES FOR CASINO & GAMING SECTOR.
🔷️ BIG BULL RAKESH JUNJUNWALA & WIFE HAS 7.38% STAKE IN COMPANY.
DISC – All views expressed are personal and for Educational and study purpose only. Consult your financial advisor before investing or taking any position based on above article.