**Delta Corp **
Story - The company is in casino industry and is the only listed player in this space.
In current year major expansion plans of this company will get completed and their capacity will go up from 700 positions to 3200 positions. Already Deltin royale has become operational and currently capacity is already 2200, the remaining 1000 positions will get added through The Deltin Daman which will soon be operational.
The company in the past has also developed real estate in Kenya through a JV with RIL but now they have exited that business.
**Size and scope - **
Revenues of casino industry in Macau - 37 billion dollars
Revenues of casino industry in Singapore - 6 billion dollars
Betting market in India - 60 billion dollars as per KPMG report
Delta corp market cap - 2000 cr.
Consumer story in india is well known.
**Moat - **
Huge entry barriers in terms of license requirement.Gambling is allowed only in Goa,daman and sikkim in india.
Goa govt has promised not to issue any further license. So atleast for next 3-5 years no competition seems likely.
They hold 3 out of 5 license in Goa, 2 out of 2 license in daman.They also have purchased 11 acres land in sri lanka where they are planning to start a casino.They will have the first mover advantage in sri lanka
Management - Zia and jaydev mody together hold 48% stake.
Zia Mody (born 1956) is a prominent Indian legal consultant and a prominent member of the Bahi’ Faith in India. She is considered an authority on corporate merger and acquisition law, securities law, private equity and project finance.
Business Today listed Mody as one of the 25 most powerful business women in India several times since September 2004 through 2011.She is a recipient of the Financial Express Knowledge Professional of the Year Award. She was also named one of India’s 100 Most Powerful CEOs by The Economic Times in 2004 and 2006.
She is also the recipient of the Economic Times Awards for Corporate Excellence as the Businesswoman of the Year, 2010. The awards are given out every year and are seen as the foremost authority in recognizing excellence in the Indian corporate market.
Apart from that RJ n RD holds 11% and ICICI venture holds 12% stake.
**Risks - **
Their have been a lot of protests against casinos in Goa. Goa CM parrikar has promised to move casinos out of river mandovi in next 2 years.
The question is how far out they will be asked to move into sea. Casino operators have said they can move upto 1 mile in sea but any futher than that will not be practical. Ships will sway a lot in deep sea and people wont be able to play properly.
However, given the mining ban it looks unlikely that Goa government will kill its only cash cow.
**Financials - **
Given the huge capex that has happened the past performance numbers are meaningless. Also past numbers include real estate which they have now exited. Nirmal bang has estimated an eps of RS. 12 for Fy 15. Given the CMP of 90 stock is trading at 7.5 PE.
**Disclosue **)- I own this stock so could be biased.