Delta Corp revamps post-Covid

The holiday season starts on a positive note for Casino Industry 

With the easing of lockdown of the economy and the easing of travel restrictions, tourism is picking up across the country. As Goa is one of the hottest tourist destinations is doing exceptionally well. The casino industry has also opened up and all the company's casinos (Goa, Sikkim, and Nepal) have started operations and are seeing signs of revival with business performance reaching pre-COVID levels. As we move into the holiday season, 3QFY22 (which is the strongest for the gaming industry) is likely to be strong as per management's guidance, given no further disruption on account of the third wave of COVID. Stock is not rated. 

Operational update 

All the casinos are now operational with Sikkim, Nepal and 
Goa casinos resuming operations from 16th August, 8th September, and 20th September respectively. The company is witnessing strong traction in operational performance across all the casinos which is comparable to pre-COVID levels. Strong performance is expected to continue in 3QFY22.

Casino business

With the opening up of the economy and the onset of the holiday season, the outlook on casino business remains positive. A strong demand uptick was visible last year too after the re-opening of casinos and the same is expected for the remaining part of FY22. 
 
Online Gaming division

Over the last 2 years, the online gaming division has seen business performance volatility. During the peak of the 1st lockdown, the business did well which gradually declined as people started venturing out of their homes resulting in lower screen time. Over the last 18-20 months, the company realigned the business strategy for the online gaming division by developing a strong backed system, Human resource team and launched a multi-gaming platform - addagames.com - to attract users. 

Hospitality division 

The hospitality business is picking up in Goa as well as Daman and the onset of the holiday/festive season is likely to keep the traction intact. 

Daman casino license case

The management has reiterated a positive stance on 
Daman's casino license case is under process with the Mumbai High Court. 

New ship to replace the smallest vessel

The Company is replacing the smallest casino vessel in Goa with a large vessel which is expected to commence operation by the end of FY23. The CAPEX outlay for the project is expected to be in the range of INR2.5-2.7bn. The new ship is expected to have a capacity as high as the total existing capacity of Delta in Goa and will thus take the overall capacity to ~2x of current levels. 

Goa Casino project (Deltin Entertainment City)

The Company has received in-principle approval from the Goa Investment Promotion and Facilitation Board ( final approval awaited) for setting up of an integrated resort consisting of hotels, convention center, multiplex cinema, retail area, electronic casino, waterpark, and other facilities at Pernem, Goa. The company is in the advanced stage of finalizing the design. The CAPEX outlay for the project is expected in the range of INR15-17bn investment spread over a horizon of 4-5 years.