DELTACORPNSEQ3FY2022-23January 18, 2023

Delta Corp Limited

8,513words
125turns
14analyst exchanges
4executives
Management on call
Hardik Dhebar
CHIEF FINANCIAL OFFICER, DELTA CORP LIMITED
Shivanandan Pare
DELTA CORP LIMITED
Pragnesh Shah
DELTA CORP LIMITED
Alpesh Thacker
ANTIQUE STOCK BROKING LIMITED
Key numbers — 40 extracted
51 crore
ut 49 odd crores that we had done in the previous quarter of September 22 we have ended up with a 51 crore so would not call it growth, but still a strong and resilient kind of a growth. The investment th
35 crore
very confident as is clearly visible that in December ‘21 the online gaming business was at about 35 crore for the quarter which has gone up to 51 crores now and we believe that the current run rate is mu
90%
these companies or wants companies like us to follow we are already in compliance with more than 90% of what is required. In fact, I would want to say 100%, but it is a question of we following it a
100%
we are already in compliance with more than 90% of what is required. In fact, I would want to say 100%, but it is a question of we following it at a certain stage and the government wanting us to foll
34%
ss are we talking of? Abhishek Singhal: Sir overall. Hardik Dhebar: We are already at about 34%, 35% kind of EBITDA margins we will only better from here given the fact that there are operation
35%
e we talking of? Abhishek Singhal: Sir overall. Hardik Dhebar: We are already at about 34%, 35% kind of EBITDA margins we will only better from here given the fact that there are operational le
38%
because if you see the casino business or the gaming business per se the average margin is about 38%, 39% and the blended margin is where we are looking at about 34% which we believe can be much hig
39%
use if you see the casino business or the gaming business per se the average margin is about 38%, 39% and the blended margin is where we are looking at about 34% which we believe can be much higher a
225 crore
tion in the coming financial year by the third quarter or so. The total cost is going to be about 225 crores, 250 crores of which we have spent roughly about 120 crore, 150 crore kind of a thing another 10
250 crore
coming financial year by the third quarter or so. The total cost is going to be about 225 crores, 250 crores of which we have spent roughly about 120 crore, 150 crore kind of a thing another 100 crores o
120 crore
. The total cost is going to be about 225 crores, 250 crores of which we have spent roughly about 120 crore, 150 crore kind of a thing another 100 crores odd to go which I do not think is a big number, but
150 crore
cost is going to be about 225 crores, 250 crores of which we have spent roughly about 120 crore, 150 crore kind of a thing another 100 crores odd to go which I do not think is a big number, but that shoul
Advertisement
Guidance — 20 items
Hardik Dhebar
qa
“So, with Delta Corp Limited January 18,2023 regards to the new project the Deltin Entertainment City or the Deltin Town whatever is the name that is being referred to that I think is not a large set of expense has happened as yet like I mentioned earlier we are in the final stages of getting the last bit of approvals.”
Hardik Dhebar
qa
“Once those approvals are in place we will be breaking ground and once we break ground over a next four years is when we are going to be spending a large amount of money, but again there we would be as you know we have generated our 300 plus crores of cash flow in the 9 months and we hope to generate close to 400 crores this year.”
Hardik Dhebar
qa
“That I think I have mentioned in my opening remarks that it is the second quarter which is always the path breaking quarter as far as gaming business is concerned and you know the third quarter obviously will be a mirror image or a reflection of how the second quarter has grown and where we are.”
Hardik Dhebar
qa
“So, given that I think given that we grew 270 crores from the earlier quarters to expect it to keep on growing quarter- on-quarter I do not think that is going to happen and historically also has not happened.”
Niteen S Dharmawat
qa
“So, instead of saying guidance or guidelines how do you see this quarter shaping up compared to the previous quarter that has gone by?”
Dhwanil Desai
qa
“Two questions the first one is so from a commentary that you have given essentially until the next shift comes we will be in a marginal growth phase and probably the ramp up will take couple of quarters though we can expect growth kind of going to again 15%, 20% from FY25 is that a right way to look at it?”
Dhwanil Desai
qa
“And since you are almost more than doubling your existing capacity in the same location and the visitation to Goa will grow at a certain rate, so does it mean that we will have more conversion from visitation and more visitors coming for Casino?”
Dhwanil Desai
qa
“And the last question on the new project the resort project any revision in the project cost or we are still looking at 25,000 crores and even 30,000 crore kind of now?”
Hardik Dhebar
qa
“So, you know it is a dynamic thing 2,500 crore was a number that we spoke about last time obviously that was a total project cost.”
Hardik Dhebar
qa
“So, like I have said all along that we will ensure that we are not stretched and we do not have a leveraged kind of a situation at any point of time is what we will ensure to the best of our ability, but otherwise the overall project obviously spread across the 100 acres we will continue to remain at that number, but we are mindful of the fact and we will ensure that there is no stretch on the balance sheet and there is no stretch on the cash flows.”
Risks & concerns — 3 flagged
I think yes we are going towards the more matured market and a more developed market, but I think to be able to put a finger and say that Yes we are operating at full capacity or optimum capacity the difficult question to answer in a business like us.
— Hardik Dhebar
So, that is what and that is why you are seeing the growth the profitability getting under pressure.
— Hardik Dhebar
Firstly in digital business if I were to paint the 5 year down the line picture is very difficult Delta Corp Limited January 18,2023 because we are living in a very dynamic environment.
— Shivanandan Pare
Advertisement
Q&A — 14 exchanges
Q
We listen to what you said in the opening remarks, but…
Hardik Dhebar
Your voice is echoing can you pick up the phone please. One sec please.
Q
So, regarding this in the previous year December ‘21 quarter there was COVID impact and all that…
Management
Q
Sir my first question what would be the effect on the Company from the rules that government is drafting on the online gaming and what is the update on the IPO debt subsidiary Company was bringing?
Hardik Dhebar
With regards to the rules that the government is framing we have gone through the rules and set of regulations that the government is planning to bring about as far as the online gaming is concerned and we are very happy to note that most of the requirements that the government wants these companies or wants companies like us to follow we are already in compliance with more than 90% of what is required. In fact, I would want to say 100%, but it is a question of we following it at a certain stage and the government wanting us to follow it at a certain stage like say for example they want some t
Q
Sir, could you give some idea on the supply addition in the water-based Casino in Goa in the last one year and in the next one year?
Hardik Dhebar
In the last one year there has been no addition. The last new vessel which came in which added capacity in terms of the industry as a whole was way back in May 19 when Bid Daddy brought in and replaced its vessels other than that the capacities have remained more or less identical they have not changed with regards to in the last next one year obviously our new vessel is going to be coming in and we have gone on record to say that our own capacity would go up about 2.5 to 3 times from our existing capacity so that is the kind of addition we are looking at. Is there any loss of market share in
Q
My question is regarding you mentioned that in December ‘21 Quarter was affected by COVID and December 22 obviously is unaffected quarter, so what I want to understand how is that the hospitality business revenues are down that is my first question?
Hardik Dhebar
So, you are talking of gaming. Hospitality. It is a very relative term when you say they are down it was 16 odd crores it is 14.5 crores you know 1 crore up and down can happen on multiple counts and one of the biggest reason as far as our hospitality business is concerned like I said since one it is not a core area for us so you the Goa hotel operations are more or less unaffected and the numbers are not very different. It is the Daman hotel operations where you would see this 50 lakh, 1 crore up and down happening because we look at a lot of corporate, MICE and weddings that happen at our ho
Q
Sorry I jointed little late so some of the questions can be repetitive also, so wanted to understand what is the fourth quarter guidelines that you have right now?
Hardik Dhebar
We normally do not give any guidance or guidelines for any forward-looking numbers Niteen. So, instead of saying guidance or guidelines how do you see this quarter shaping up compared to the previous quarter that has gone by? So, the second and the third quarters have always been the most robust and the most high- performance quarter as far as Delta is concerned and the momentum of the third quarter carries on into the fourth quarter at least for the first month or month and quarter or so. So, January, February currently the trend is quite strong and robust. However, this year in this particul
Q
So, I just had one question just wanted to know what are your licensing fees for the Nepal and Sikkim Casino?
Hardik Dhebar
If I have not mistaken Sikkim there has been Pragnesh you are there on the call if you can just tell me the exact numbers that we have I think it is a crore or something for Sikkim and Nepal I think is a fixed fee for a longer tenure that we have paved in advance if you can bring in Pragnesh you will have the numbers please. Nepal it is around 1 Cr a year and Sikkim it is a 75 lakh a quarter. And there has been no revision in these licensing fees this year right it is a [Inaudible 28:27]? Sikkim there is a revision from October onwards there is a revision they have increased to 2.5 Cr now. But
Q
Two questions the first one is so from a commentary that you have given essentially until the next shift comes we will be in a marginal growth phase and probably the ramp up will take couple of quarters though we can expect growth kind of going to again 15%, 20% from FY25 is that a right way to look at it? Delta Corp Limited January 18,2023
Hardik Dhebar
Well I would not want to put a number, but given the fact that we are going to be disrupting the market again with a new product, better product, larger capacity, etc., we could probably look at even a large growth number. And since you are almost more than doubling your existing capacity in the same location and the visitation to Goa will grow at a certain rate, so does it mean that we will have more conversion from visitation and more visitors coming for Casino? Just to give you a perspective there are about 1 crore people who visit Goa on an annual basis. The Casino industry currently given
Q
I just have a couple of doubts. I want to understand the economics of the online gaming business, could you throw some light on it just take two minutes? Delta Corp Limited January 18,2023
Hardik Dhebar
So, what is your question? I want to understand the economics of the business because it is still not EBITDA positive? I do know how long have you been following Delta as a Company because online business till a couple of quarters back has always been positive. It was not only EBITDA positive, but also bottom line positive business. It is because we have chosen to grow and grow faster and grow bigger that we have started to spend our monies on to marketing, sales promotion, advertising and other related activities. Exactly what I meant by I want to understand the economic how much are you spen
Q
I am saying regarding the new vessel that you mentioned that is going to increase the capacity by 2.5 times, so two parts to that. One is that how long do you think it will take before you can reach like sort of a good number there and secondly do we need to then significantly increase our market share that is sort of report that post the new airport get opened the all traffic in Goa is going to grow significantly and hence it is just that the increased traffic itself will take care of the incremental supply that you are bringing to the market.
Hardik Dhebar
Sachin as far as the traffic is concerned I just explained to this gentlemen before you that today it is 1 crore people coming into Goa. Today what we are servicing is hardly 10 lakh, 15 lakh, 12 lakhs of the 1 crore visitations that are happening into Goa. So, you already have a large amount of untapped potential market already visiting Goa. As you can see 10%, 15% looks reasonably, we cannot expect every visitor to go and visit a casino so if you could give a certain example globally how does it work because see Macau and Las Vegas all I will say that typically casino only destinations? Toda
Q
My majority of question is answered. I just have two questions what is the margin profile difference between land base casino and live casino?
Hardik Dhebar
Not too much of different in fact land base casino if it is of a similar size the cost the margins can be even better given the fact that a lot of marine related cost that we incur and lot of petrol and fuel related cost that we incur on a ship that will not exist, but you have to compare it on a like-to-like basis and effectively the margins can be better on a land casino. And sir if you can throw some light on land based casino competition? Today there is no competition because land based casino’s whatever they are existing including our are all 1,000, 2,000, 3,000 square foot. Small casinos
Q
My first question was in terms of can you share an update in terms of how many club Deltin members we have if I recall it was around 6,000 a year ago, any update on that?
Hardik Dhebar
It is a very dynamic number it changes from day-to-day, but I think we should be in the similar range at this point of time because when I say dynamic a lot of people drop out also. So, if you are a member today and you do not fulfill the criteria you will no longer be a member, but somebody else will come in so it is a dynamic number I do not have the exact number at this point of time, but I think we should be in the range of that 5,000, 6,000. Another update I believe we are exploring a real estate project because your land parcel I think we were not able to sell that land and we are coming
Q
My question is on the upcoming casino the bigger vessel, can you help us understand the incremental fixed cost that would come on our P&L given the fact that we have commissioned a vessel in Q4 this coming year?
Hardik Dhebar
For the new vessel you are talking of. Yes the fixed cost in particular. So, we have to look at the staffing in addition to so basically the biggest cost would be the employee cost. So, once we freeze on the exact number that we want to start recruiting from day one we will be in a position, but we are looking at 1,200, 1,400, 1,500 additional people. So, we will be able to give you a number closer to the operations date. It is a little early in the day to say what is the fixed cost because everything else is going to be variable. And what about the license fees I remember the last time you me
Q
No I think we had a discussion on almost all the topics that are material and sensitive as far as the business is concerned we have been able to cover all areas and I am hopeful and hoping that I have been able to answer most of it to the best of everyone satisfaction. I think like I said we are on the right path, right trajectory and it is only for the time to tell where we are going to be growing and like I said it is a step up growth that we have always seen and we believe and hope that will continue.
Management
Speaking time
Hardik Dhebar
52
Moderator
16
Yash Dantewadia
9
Jiten Parmar
8
Sachin Kasera
6
Anupam Agarwal
6
Pritesh
5
Chintan Mehta
4
Abhishek Singhal
3
Niteen S Dharmawat
3
Advertisement
Opening remarks
Alpesh Thacker
Thank you. Hello everyone and welcome to Third Quarter FY23 Investor Conference Call of Delta Corp Limited. Today we have with us the management of Delta Corp represented by Mr. Hardik Dhebar – Chief Financial Officer of the Company. The format of the discussion would be brief opening remarks by the management followed by a Q&A session. Without much ado, let me hand over the call to Mr. Dhebar. Over to you, Sir.
Hardik Dhebar
Hi, Good afternoon everyone and thank you Alpesh for hosting this call once again. So, not wasting too much time I am sure everyone of you has gone through the results while there have been certain conjunctures and certain confusions in the minds of people with regards to the business and the margins and stuff like that when compared year-on-year. I have during my interaction over the media as well I have tried clarified that December ‘21 was a base which is not comparable as regards to the current period. The fact of the matter is that it was only for part of the year that we were operational in that financial year given the COVID second wave and in the quarter of December ‘21 not all the expenses were at their pre COVID level or the normal operating levels whether it is the salaries, whether it is the license fees or for that matter all other operational expenses as well which obviously in the current period are back to the pre-COVID levels in fact the regular increments which had no
Advertisement
← All transcriptsDELTACORP stock page →