DELTACORPNSEQ1FY24July 27, 2023

Delta Corp Limited

5,985words
89turns
12analyst exchanges
4executives
Management on call
Ashish Kapadia
MANAGING DIRECTOR, DELTA CORP LIMITED
Hardik Dhebar
CHIEF FINANCIAL OFFICER, DELTA CORP LIMITED
Manoj Jain
SENIOR VP (COMMERCIAL), DELTA CORP LIMITED
Alpesh Thacker
ANTIQUE STOCK BROKING LIMITED
Key numbers — 37 extracted
335 crore
arter also where for the first time we have reported these kinds of numbers where we have crossed 335 crores, so 338 crores is the revenue that we have reported for the quarter which is the highest ever re
338 crore
e for the first time we have reported these kinds of numbers where we have crossed 335 crores, so 338 crores is the revenue that we have reported for the quarter which is the highest ever revenue for a par
25%
ive you a perspective from a football perspective we have reported and registered roughly about a 25% increase in the visitations year-on-year and almost a 20% increase in visitations quart
20%
reported and registered roughly about a 25% increase in the visitations year-on-year and almost a 20% increase in visitations quarter-on-quarter. So, all the numbers that are there are bein
Rs. 500
ime offer which has been offered to every single walk-in who comes into the casino. So, we charge Rs. 500 and give them Rs. 1,500 worth of non-neg chip which basically comes to around Rs. 4 odd crores per
Rs. 1,500
offered to every single walk-in who comes into the casino. So, we charge Rs. 500 and give them Rs. 1,500 worth of non-neg chip which basically comes to around Rs. 4 odd crores per month which is basicall
Rs. 4
, we charge Rs. 500 and give them Rs. 1,500 worth of non-neg chip which basically comes to around Rs. 4 odd crores per month which is basically Rs. 12 crores in a quarter. That's what basically we do op
Rs. 12 crore
rth of non-neg chip which basically comes to around Rs. 4 odd crores per month which is basically Rs. 12 crores in a quarter. That's what basically we do operational in Goa. And obviously one third of the val
50%
probably missed out on that but I think in one of the calls earlier we had said that we had paid 50% of the amount as directed by the Court, Goa High Court and then subsequently the matter was taken
75%
matter was taken to Supreme Court. Supreme Court has directed us to pay a further 25% of it. So, 75% of that disputed amount for which we were asking a waiver has already been paid physically. As fa
rs,
s because it was a matter pertaining to that particular financial year and those particular quarters, it is not a matter of the current year or the current financial quarter and hence that note has be
100%
r books of account. So how much is the amount of that? Hardik Dhebar: We had debited the entire 100% for whatever was due in March in the financial year ‘20 and ‘21 everything was debited. The amoun
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Guidance — 18 items
Hardik Dhebar
opening
“Like I said not spending too much time on smaller details which I'm sure will be taken up during the question answer session.”
Hardik Dhebar
qa
“So, it will be very difficult to tell you that data at this point of time.”
Ashish Kapadia
qa
“So the new vessel is being built by us in India and I think hopefully in the last quarter of this financial year the vessel should be ready and we are hopeful that we should get a full year of operation next year with the new vessel.”
Ashish Kapadia
qa
“So, we are hopeful on 3rd of August the matter will be heard.”
Hardik Dhebar
qa
“And therefore, our matter the order is also already out that it's been shifted to 3rd August, and we will be on the board.”
Chirag Shah
qa
“Whenever we get clarity on this GST matter, is it possible for you all to have a call for the investors so we don't have to wait for the next quarter to get a clarity because so many rumors fly across.”
Sandeep
qa
“I just wanted to know whether you expect any clarity in the coming 3rd of this meeting, or it may take more time to get clarification?”
Ashish Kapadia
qa
“But we feel that obviously it will be discussed in this meeting and some consensus will come up.”
Arun Selvan
qa
“I think this is regarding the whole further investments in our integrated gambling resort project.”
Arun Selvan
qa
“How much money have we already spent so far on the gambling project resort?”
Risks & concerns — 5 flagged
So it is very difficult for us to now tell you any of this information because honestly speaking that exchange and I used the word exchange yesterday and again I'm saying the exchange of chips for currency is not a sale as far as we are concerned.
— Hardik Dhebar
So, it will be very difficult to tell you that data at this point of time.
— Hardik Dhebar
So, in terms of the impact of that on the financials was never going to be there.
— Hardik Dhebar
But till we really know exactly what the government wants us to do, whether it's on sale of chips or not on sale of chips or what it's very difficult to exactly tell you what all we've thought of.
— Ashish Kapadia
While I think most people are focused on the impact of GST on our casino operations, I was wondering, again I wouldn't want to put it as what would be the impact of the GST loss, but I was just wondering if there is any impact on our IPO plans right now for the online gaming unit.
— Arun Selvan
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Q&A — 12 exchanges
Q
I have two questions. So first is what would be the face value of the chips that we have sold in the current quarter and for the full year ’23? Second would be so how much would be our non- negotiable chips that we give as promotion during this Quarter 1 and in full year 23? So these are the two questions.
Hardik Dhebar
Anushree your question as I understand correctly is you want to know what is the face value of the chips sold in the current quarter and what we did last year and what is the non-negotiable chips that we give out? Yes. I think let me first tell you I think your question is stemming out from the fact that the GST council has proposed a certain mechanism on which they want to apply the GST and just like I had said yesterday in my televised interaction with the media as well, it is not very clear as to what methodology exactly are they going to propose. The fine print is yet to be out. What do th
Q
I need to ask one question like is management looking forward to go away with the chips or trying to implement the prepaid method of instruments for the casino?
Hardik Dhebar
Like I said we have to yet wait for the fine print as to what the government wants us to do actually. I don't think that is going to be the end of the story because I am not sure how much have you followed, what actions are being taken and what is being done. There is huge amount of representations. In fact, in our case even the governments of Goa and Sikkim have made the representation. So, we really don't know. And therefore, any prepaid instruments or doing away with chips is nothing on the on wheel at this point of time. I don't think doing away with chips or doing any of those things can
Q
My question is that in earlier quarterly and yearly financials we used to see a note that casino industry had approached to Goa government for considering some waiver of this license fee during this COVID time. So, what happened to that note because nowadays we're not seeing that note anymore. Did we get some refund from the government or the case is gone?
Hardik Dhebar
No I would like to highlight, I don't know you probably missed out on that but I think in one of the calls earlier we had said that we had paid 50% of the amount as directed by the Court, Goa High Court and then subsequently the matter was taken to Supreme Court. Supreme Court has directed us to pay a further 25% of it. So, 75% of that disputed amount for which we were asking a waiver has already been paid physically. As far as the books of accounts are concerned, we have always right from day one accounted for it. So, in terms of the impact of that on the financials was never going to be ther
Q
Do we have any update clearly on the environmental clearance which we might have got for the Goa resort which we are coming up? That is my first question and second question is just wanted to confirm with you again you have mentioned in the past call that probably 100 worth of chips if somebody buys the casino at the end retains 17% to 18%, Rs. 70 to 80, so is that understanding, correct?
Hardik Dhebar
So typically, what happens is the margin of the casino business is effectively anywhere between 19% to 22%. Yes. So, in that sense of the term if you were to put it just simply mathematically on every Rs. 100, Rs. 20 is what the casino earns. That is your understanding which is the correct understanding with regards to the MOEF clearance and everything I think that work is currently on but we are obviously waiting for the air around the whole GST and everything to get clear before trying to commit any more serious capital anywhere.
Q
My first question is can you refresh on your current CAPEX plans and new vessel status? And the next question is dry dock. I suppose I didn't follow it last quarter, I suppose it was supposed to happen last quarter so it's done and what is the next schedule for it?
Hardik Dhebar
The dry dock did happen last quarter and that is why if you see the numbers in the last quarter, we had 214 crores number as against 270 crores in the previous quarter. And I had made a statement saying that because of loss of almost one month of operations is where we lost out on the revenue. So, the dry dock did happen. Now the next schedule is after 5 years for the big vessel which is Deltin Royale. We may have our smaller vessel Deltin Jack which would go for a dry dock in the current financial year. But I think from a revenue perspective the loss of revenue will not be as high or it will
Q
My first question is with respect to the EBITDA margins. Can you broadly indicate what would be the EBITDA margins after the new the tax on full value is applicable?
Hardik Dhebar
I just mentioned to one of the other callers that we are trying to paint a picture on basis of certain hypothesis and it's a hypothetical situation that is being put forth at this point of time. Till there is clarity on rules, till there is clarity on what is expected to paint any picture is going to be a completely wrong thing. Okay no problem. Secondly on the Daman case, any update on Daman case? When is the next hearing? The hearing the matter was up today on board, but it didn't come up. So, the next date of hearing is I think 3rd of August which is there for final hearing. So, we are hope
Q
I had a request. Whenever we get clarity on this GST matter, is it possible for you all to have a call for the investors so we don't have to wait for the next quarter to get a clarity because so many rumors fly across. So, this is just a request that whenever you all have some clarity positive or negative impact….
Hardik Dhebar
Yes, it's not an unfair ask at all and we'll be more than happy to come and clarify whatever the situation is as and when we get that clarity. Great. And sir one question again it's a thought. I understand that like you mentioned to many of the shareholders or the people on the call that you're not exactly sure of the impact but have you all thought of a worst-case scenario and how you all will deal with it? See again you're asking the same question putting it in a slightly different way in a slightly better way so to say. You would have some level of some plan that you all would often surely
Q
Mostly you have already replied about the GST issue. I just wanted to know whether you expect any clarity in the coming 3rd of this meeting, or it may take more time to get clarification?
Ashish Kapadia
No, I think in the last meeting they had clarified on certain aspects. I think there's been a lot of representations from all quarters. I think legally also the GST department needs to carry out a few things and probably this meeting on the 3rd will address online casinos raising issue, though the real agenda has not yet come out. So only when the agenda actually comes out and we get to hear what they're going to be discussing. But we feel that obviously it will be discussed in this meeting and some consensus will come up. But we also genuinely believe that we have a lot of voice that is going
Q
I just had a couple of quick questions. While I think most people are focused on the impact of GST on our casino operations, I was wondering, again I wouldn't want to put it as what would be the impact of the GST loss, but I was just wondering if there is any impact on our IPO plans right now for the online gaming unit.
Hardik Dhebar
Arun, I have already gone on record and clearly said that the investing community obviously would want absolute crystal clarity when it comes to online gaming and they would want full clear picture as to what the way forward is and without which nobody's going to put $1 into any new investment especially in a sector which has this kind of overhang. So, keeping all that in mind the IPO obviously is on hold and we will revisit it once we have full clarity. Okay I understand. Now one more question that I have is actually with respect to a prior answer that a previous investor had asked. I think t
Q
Last week I came across a news article which without naming any company, said that there was around 10,000 crores of GST notice sent to casinos in Goa. Can you just clarify if we have received any kind of notice in the recent past on this?
Ashish Kapadia
No, we've not received anything of this nature. Also, please read the article well. It is talking about somebody claiming wrong input credits and charging 18% instead of 28% and thereby there was some GST mismatch. So that is one. Secondly, please appreciate we are a listed entity. If there is anything of this sort, it would have to be necessarily disclosed to the stock exchange even if I don't want to. So, you have to be rest assured on those fronts. And secondly, please read the article like I said, it is talking of somebody charging 18% and claiming wrong input credits. We have gone on reco
Q
My question is regarding these two expense items. One is this employee expenses. As compared to June 22, year-on-year employee expenses have gone about 20%. So, I think if you are going to go by this, so it is a real dent in the profitability. So, what action we are taking to reduce these employee expenses?
Hardik Dhebar
And what was the other thing, you said two items? Other thing is that the hospitality sector is still in the losses. So, what are we doing to just turn around this hospitality sector? So, as far as the first part is concerned, Priyansh the employee expense, obviously bulk of it is coming from the online segment. Now there was a plan, there was a strategy that we had embarked upon and therefore we had employed people, recruited people and had spent money on that front. Now with the IPO not happening in the near future and with this all uncertainty looming over the sector, obviously all those co
Q
So, I think whatever were the apprehensions, wherever we could give clarity, we have tried and given clarity. We once again believe that a lot of air is being unnecessarily blown on the topic of GST, we should ideally wait for the government to come out with its full and final clarifications, notifications rules, etc., before we jump the gun, or we preempt anything. I think, like Ashish mentioned to one of the participants, that we are making too much out of it at this point of time without knowing what reality is. And wherever else we could give whatever clarifications; I believe all of us to
Management
Speaking time
Hardik Dhebar
30
Moderator
14
Priyansh
12
Ashish Kapadia
11
Arun Selvan
5
Chirag Shah
4
Anushree
3
Nithin Kamath
2
Rishikesh
2
Alpesh Thacker
1
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Opening remarks
Alpesh Thacker
Thank you Seema. Hello everyone and welcome to 1st Quarter FY24 Investor Conference Call of Delta Corp Limited. Today we have with us the Management of Delta Corp, represented by Mr. Ashish Kapadia – Managing Director of the company, Mr. Hardik Dhebar – Chief Financial Officer and Mr. Manoj Jain – Senior VP (Commercial). The format of the discussion would be a brief opening remarks by the Management followed by Q&A session. Without much ado let me hand over the call to Management. Over to you sir.
Hardik Dhebar
Good evening, everybody. Hardik here. Thank you everyone for joining this call. Most of you would have obviously seen the results and the numbers and I am very happy to report that the trend that we had set in the last financial year where we achieved milestones has continued in the first quarter also where for the first time we have reported these kinds of numbers where we have crossed 335 crores, so 338 crores is the revenue that we have reported for the quarter which is the highest ever revenue for a particular quarter ever. And similarly, our EBITDA margins and our net profit numbers as well as the margin stands at almost where we were at the highest at any point of time. Having said that there are no other specifics or out of the ordinary items as far as the numbers are concerned. Yes, we all know there have been developments and I'm sure a lot of people have a lot of questions. So, I'm not going to waste or take much of time on the introduction. The numbers are very good. The num
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