Delta Corp LtdQ4 FY25Leisure Services

Delta Corp Ltd

Q4 FY25 Earnings Call Analysis

Management growth scorecard

Revenue

Category 3

Margin

Category 3

Fundraise

Order

N/A

Capex

Yes

1 of 4 growth signals are positive — mixed outlook.

Revenue guidance

Category 3

→Casino business expected to recover to pre-GST revenue levels within 1-2 quarters.
→New ship arriving will double capacity, driving significant revenue growth over the next 3-5 years.
→Increased hospitality capacity planned (200-250 rooms from current 106) to support expanded casino operations.
→Online business is currently in wait-and-watch mode; consolidation expected, with future growth depending on market shakeout.
→Ongoing projects (new vessel, hotel) will add to revenue and improve profit margins through cost savings.
→Real estate venture with Peninsula Land is a diversification play; initial Rs. 250 crore investment aimed at quick redevelopment projects with 25-30% IRR.
→Integrated resort project temporarily on hold; phased approach starting with a water theme park expected to contribute to growth later.
→Overall management confident about financial health and growth prospects without foreseeable hurdles.

Category 3

→Delta Corp expects growth in its casino business after the new ship, which will double current capacity, comes into operation within the next 1-2 quarters.
→The expansion of vessel capacity will drive revenue growth and margin expansion despite a small GST-related margin hit (6-7%).
→EBITDA margins are projected to stabilize around 35-36%, slightly lower than the previous 41%, but offset by higher revenue from increased capacity.
→The launch of new hospitality capacity (200-250 hotel rooms) to complement the casino business is anticipated to reduce costs and boost profits.
→Real estate investments via Peninsula Land are viewed as a strategic diversification expected to add value, though revenue impact timing is uncertain.
→Online gaming business is currently on hold with potential upside after expected market consolidation.
→Overall, management is confident of returning to pre-GST revenue levels by mid-2024, leading to improved earnings and profitability.

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→Currently, there is no indication of an immediate need for new debt as the company has sufficient cash on its balance sheet and ongoing cash flows from its core business.
→Peak investment in the real estate JV is initially about Rs. 250 crores, funded from existing reserves without requiring additional borrowing.
→The company states it does not currently need any new debt and will only consider further investment if a lucrative opportunity arises.
→There is no mention of upcoming equity fundraising; the previous IPO plans for the online business were put on hold due to regulatory and market conditions.
→Delta Corp is focusing on maintaining profitability, optimizing existing projects, and cautiously evaluating new investments without aggressive fundraising plans at present.

→The new ship project has a total outlay of approximately Rs. 280-290 crores.
→Rs. 175 crores has already been invested in the ship; the remaining balance will be deployed over the coming months of 2024.
→The ship construction is on schedule with expected completion in Q3 FY24, with potential revenue generation starting Q3 or definitely by Q4 FY24.
→No specific mention of additional pending orders beyond the ship and related ongoing new hotel project.
→Cash flow and reserves are healthy, supporting current projects without the need for new debt.
→Real estate JV with Peninsula Land includes an initial investment of about Rs. 250 crores; further investments depend on opportunity and performance.
→Overall, ongoing CapEx primarily revolves around the new ship, new hotel, and real estate JV, with no other major pending orders disclosed.

Yes

→New Ship: Total outlay ₹280-290 crores; ₹175 crores already invested. Completion expected by Q3 FY24, with revenues starting Q3 or Q4. (Page 6-7)
→Hotel in Miramar: Currently ₹190 crores invested (including land cost). Additional ₹175 crores planned to convert it into a five-star deluxe hotel. (Page 7)
→Integrated Resort Project (Goa land): Initially put on hold; now phased. Phase I to start with a water theme park (no casino). Future phases include hotel, retail, multiplex. (Pages 7, 16-17)
→Real Estate JV with Peninsula Land: Initial investment approx. ₹250 crores. Focus on quick redevelopment projects in Mumbai and Goa, targeting IRR of 25-30%. (Pages 13-14)
→No current debt required; investments funded through internal cash flows and reserves (~₹500 crore post Peninsula investment). (Page 10,14)

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