Delta Corp June quarter profit beats estimates

Indian gaming giant Delta Corp saw its June quarter net profit rise to Rs 28.6 crore, up 52 percent year-on-year, beating analysts’ expectations.

Net sales / revenue for the gaming company rose 36.7 percent to Rs 109.9 crore, up from Rs 80.4 crore in the prior year period. This was due mainly to a 49 percent rise in income from gaming operations.

Delta Corp is the only listed company in India engaged in live, electronic and online casino gaming in the country. The company owns and operates land-based and offshore casinos in Goa and Sikkim, and also owns Gauss Networks Private Limited, the operator of online poker site Adda52, amongst others.

“Upside to our expectations derived from all major reporting segments: casino gaming operations, online gaming, and hospitality with the biggest delta in absolute dollar terms coming from casino operations upside,” Grant Govertsen, managing director of Union Gaming Asia said in a note. “Simply put, demand for the company’s riverboats in Goa remains very robust and continues to make the case for the transformational land-based move.”

Govertsen said a lot of the upside in gaming activity has come because an estimated 50 percent of small casinos operating in hotels had closed down as a result of higher license fees.

“For Delta, the biggest impediment to growth in the out years will be a lack of physical space to accommodate customers given that riverboat casinos have a finite amount of space,” he said.

The Goa government has been considering legislation that would move the offshore casinos onto land into a special entertainment zone. Analysts have said the move would be transformational, allowing the development of a higher standard of IRs.

The regulation has been delayed due to ill health of the state governor, though he is back on the job and the bill may be published this session, Govertsen says.