Motilal Oswal Remains Bullish On Delta Corp; Ups Earnings Estimates
Motilal Oswal Maintains ‘Buy’ Rating with a target price of Rs 243.
Brokerage Motilal Oswal increased its earnings estimate for casino and hotel operator Delta Corp Ltd. on the back of significant growth in its core business.
The broking firm maintained a ‘Buy’ rating on the stock, with a target price of Rs 243, a potential upside of 25 percent from the current market price
The company is expected to witness significant growth from the online gaming business as it ramps it up, Motilal Oswal said in a report. The casino policy change in Goa and the commencement of airport in Sikkim, where it operates a casino, would put the company in a sweet spot to benefit from a manifold increase in a number of visitations, it added.
Motilal Oswal increased its earnings estimate for the financial year 2017-18 and FY19 by 5 percent and 3 percent, respectively. The brokerage also expects the Delta Corp to deliver sales and net profit CAGR of 38 percent and 75 percent respectively over FY17-19.
To sharpen its focus on retail footfall, the company has converted a floor dedicated to club members of Deltin Royale to mass access to accommodate growing incremental visitors. This, in turn, significantly increases the prospects of doubling retail revenue from Deltin Royale.Motilal Oswal Research Report
Besides, the Sikkim casino, which operates at revenue of about Rs 1.1 crore every month, is expected to nearly double its annual turnover to Rs 22.5 crore by this financial year, the report said.
The company also hinted that it is exploring opportunities in Nepal and might set up operations in FY19 if its deems suitable and that will capitalise on increasing tourist arrivals in that country, the report said.
Shares of Delta Corp extended gains for the second day and rose as much as 3.5 percent to Rs 194.80 on the NSE.