Delta Corp – A Long-Term Bet with Asymmetric Risk-Reward
One of the few positives in Delta Corp’s case is its strong base in Goa and Sikkim—especially in Goa, where it operates under a BJP-led state government and is a decent formal-sector job provider. With India aiming to grow tourism significantly, I find it hard to believe that the government would want to completely shut down or cripple a company that plays a major role in that ecosystem.
Yes, the government has already imposed a massive retrospective GST demand (~₹33,500 crore), and that’s currently under review by the Supreme Court. But despite the aggressive stance, I don’t believe the central government actually wants to push Delta into insolvency—especially when it risks creating bad press in a tourism-heavy region like Goa.
Delta holds valuable casino licenses in a highly regulated space where new entrants are rare. The company also has an almost debt-free balance sheet, which I’m personally a fan of. Casinos are generally evergreen businesses that thrive on footfall, and I think there’s still room for growth—especially if Goa improves its infrastructure and cleanliness and the government pushes tourism more seriously.
That said, risks remain. India’s rising prosperity combine with cheap flights might make indian tourists choose exotic places like Bangkok/ KL over Goa. Poor local management, tourist safety issues, or regulatory overreach could dent Goa’s appeal. And international factors—like reduced Russian tourist inflow due to the Ukraine war—are already impacting tourism.
But if these stabilize and India follows through on its tourism plans, Delta could benefit significantly over the next 5–10 years.
To sum it up: yes, this is a gamble—but one with potentially asymmetric upside. If the GST verdict is favorable (or even neutral), the upside could be considerable. If not, I still find it hard to believe that this company becomes a zero where the government is going to be an employment/eco-system destructor in highy sensitive tourism industry where it is looking to attract investments.
Would love to hear others’ views—open to corrections if I’ve missed anything major.
Declaimer: Invested.