Delta Corp at a new high

Delta Corp (formerly Arrow Webtex Limited) has been engaged in the business of casino gaming and hospitality. The stock is currently the top gainer on the BSE, hitting a new 52-week high today at Rs.106.80 with a big 3.5 times surge in volumes.

Two reasons for this. Firstly, the company’s financial performance for Q1FY17 has been good. Its consolidated net profit came in at Rs.20 crore, which is a turnaround vis-a-vis a loss of Rs.1 crore in previous Q1. This was on a 35% (YoY) jump up in total income at Rs.109 crore. EBITDA for the quarter came in at Rs.42 crore, up by a very good 86% with margins jumping up from 27.6% to 38.3%. Its gaming and entertainment tax outgo rose 22% (YoY) while licensing and registration charges have risen 33%. Interest outgo, though high at Rs.9 crore, is down 27% (YoY). Exceptional income of Rs.4.5 crore also helped the net profit surge.  The main earner is the casino unit while the hospitality unit is loss making.

Company’s equity is pretty heavy at Rs.23.07 crore and the EPS (FV of Re.1) is at 0.87 paise.

And the second reason is that it has signed a leave and license agreement for premises in the Denzong Regency Hotel, Gangtok, Sikkim, to operate a casino. The company is in the process of refurbishing and getting the premises casino ready, which should be completed in the next three months. This will be an addition to its three offshore and one onshore casino in Goa.