Any current/future new fundraising through debt or equity?

Delta Corp is planning a fresh fundraising via an IPO for its gaming business. The IPO will consist of a mix of fresh issuance and offer for sale. Fresh issuance amount is INR 300 crores; offer for sale is INR 250 crores. The total issue size is INR 550 crores. The minimum required dilution is 25%, with expected dilution being around 25% to 30% depending on pricing. The IPO was on hold due to regulatory ambiguities but is now ready to be launched soon. Approvals for the IPO are valid until October 2023. No explicit mention of new debt fundraising in the provided transcript.

Any current/future capex/capital investment/strategic investment?

New vessel capex: Total capex around INR 250 crores; ~70% spent (INR 140-160 crores), ~30-40% (INR 90-100 crores) remaining. Delay due to operational yard and steel supply issues; vessel expected to boost capacity starting FY'24 with larger impact FY'27 onwards. Entertainment city: Groundbreaking expected around June-August with initial low capex (excavation, groundwork); major capex anticipated late FY'24 or FY'25; operational by FY'27. Real estate: No large-scale real estate investment planned except a one-off sale of Goa land (historically held) for residential flats, expected to comple

Future growth expectations in sales/revenue/volumes?

New vessel expected in Q4 (originally Q3), increasing capacity 2.5 to 3 times, potentially tripling current monthly revenues from INR50-60 crores to significantly higher levels. Current run rate is about INR4 crores/month in Kathmandu and INR2-2.5 crores/month in Sikkim, both markets considered matured and stabilizing with potential for growth as destinations recover post-COVID. Management expects to be 3x current size with no capacity constraints for the next 4-6 years. Increased license fees are fixed costs but expected to be offset by revenue growth. Goa's new airport and increased flight o

Future growth expectations in earnings/operating earnings/profits/EPS?

Hardik Dhebar expects to triple the size of the business in the next 4-6 years without capacity constraints, partly by replacing smaller vessels with larger ones. With the new vessel, capacity is expected to increase 2.5x to 3x, positively impacting revenues and profitability. The payback period for vessel investments is short; for example, Deltin Royale’s INR170 crore investment paid back in less than six months. Online gaming is currently breaking even; earnings from poker are reinvested into multi-gaming platforms to fuel growth. Capex on the entertainment city will ramp up post FY’24, with

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Delta Corp LtdQ1 FY23Leisure Services

Delta Corp Ltd Q1 FY23 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹64.4P/E: 20.8Market Cap: ₹1.9K CrSector: Leisure Services

Management growth scorecard

Revenue

Category 3

Margin

Category 3

Fundraise

Yes

Order

N/A

Capex

Yes

2 of 4 growth signals are positive.

Full analysis

Revenue guidance

Category 3

→New vessel expected in Q4 (originally Q3), increasing capacity 2.5 to 3 times, potentially tripling current monthly revenues from INR50-60 crores to significantly higher levels.
→Current run rate is about INR4 crores/month in Kathmandu and INR2-2.5 crores/month in Sikkim, both markets considered matured and stabilizing with potential for growth as destinations recover post-COVID.
→Management expects to be 3x current size with no capacity constraints for the next 4-6 years.
→Increased license fees are fixed costs but expected to be offset by revenue growth.
→Goa's new airport and increased flight operations are anticipated to improve footfalls and revenue.
→Online gaming is breaking even with marketing reinvestment focused on growth.
→Overall, management is optimistic about multiyear growth driven by capacity expansion, market recovery, and macroeconomic growth toward a projected INR10 trillion economy by 2030.

Margin guidance

Category 3

→Hardik Dhebar expects to triple the size of the business in the next 4-6 years without capacity constraints, partly by replacing smaller vessels with larger ones.
→With the new vessel, capacity is expected to increase 2.5x to 3x, positively impacting revenues and profitability.
→The payback period for vessel investments is short; for example, Deltin Royale’s INR170 crore investment paid back in less than six months.
→Online gaming is currently breaking even; earnings from poker are reinvested into multi-gaming platforms to fuel growth.
→Capex on the entertainment city will ramp up post FY’24, with commercial operations expected by FY’27.
→Strong EBITDA growth was seen recently (over 50% jump YoY adjusted for operations interruptions), with net profit up over 150%.
→Expansion in capacity and market growth aligned with India possibly becoming a $10 trillion economy by 2030 signals sustained multiyear earnings growth.

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Fundraise plans

Yes

→Delta Corp is planning a fresh fundraising via an IPO for its gaming business.
→The IPO will consist of a mix of fresh issuance and offer for sale.
→Fresh issuance amount is INR 300 crores; offer for sale is INR 250 crores.
→The total issue size is INR 550 crores.
→The minimum required dilution is 25%, with expected dilution being around 25% to 30% depending on pricing.
→The IPO was on hold due to regulatory ambiguities but is now ready to be launched soon.
→Approvals for the IPO are valid until October 2023.
→No explicit mention of new debt fundraising in the provided transcript.

Order book

The transcript does not provide specific details on current or expected orderbook or pending orders for Delta Corp Limited. However, related operational and project updates mentioned include: - New vessel/ship commissioning is delayed due to operational yard and steel supply issues. - The vessel business currently generates about INR 50 to 60 crores monthly. - Capex and operating costs for the new ship will be shared offline with interested parties. - Non-core asset sales (such as the Goa project) expected to complete within 18 to 24 months, with expected sale value between INR 250 to 300 crores. - Gaming IPO plans are ongoing but on hold temporarily due to regulatory clarifications; fresh issuance planned for INR 300 crores and offer for sale of around INR 250 crores. No concrete orderbook or pending order amounts or schedules are explicitly stated in the provided transcript excerpts.

Capex plans

Yes

→New vessel capex: Total capex around INR 250 crores; ~70% spent (INR 140-160 crores), ~30-40% (INR 90-100 crores) remaining. Delay due to operational yard and steel supply issues; vessel expected to boost capacity starting FY'24 with larger impact FY'27 onwards.
→Entertainment city: Groundbreaking expected around June-August with initial low capex (excavation, groundwork); major capex anticipated late FY'24 or FY'25; operational by FY'27.
→Real estate: No large-scale real estate investment planned except a one-off sale of Goa land (historically held) for residential flats, expected to complete within 18-24 months with sale value INR 250-300 crores.
→Strategic: No active new real estate investments; focus remains on integrated casino resort.
→Online gaming: No seasonal business fluctuations; growing steadily with no notable capex updates mentioned.

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