Delta Corp to Pump ₹1,100 Crore into Offline Sector Over Two Years

26 Mar 2024 , 03:16 PM

Delta Corp, a gaming and hospitality operator, is reevaluating its growth strategies in light of the new 28% GST rate on online gaming and casinos. In order to return to a profit margin of at least 38%, the company intends to invest ₹1,100 Crore in its offline operations over the course of the next two years, Chief Financial Officer Anil Malani told Moneycontrol. The COVID-19 epidemic and increased taxes had a negative impact on the company’s profitability.

Over the next 18 to 30 months, we plan to invest ₹1,100 Crore. By the middle of the 2025–2026 fiscal year, the company’s net margins will return to 36–38%. As Malani stated in the interview, ‘The margins will actually be better than what we were doing earlier.’

Following a raise in the GST rate to 28%, Delta Corp. decided to postpone its intentions to expand into the online gaming market. In the courts, it is also contesting a notice of GST evasion worth ₹24,000 Crore. Due to the new GST structure, the company has also revised its expansion plan for the casino business and opted to take its time developing an integrated resort.

A new hotel with a casino, a theme park in Goa, and an offshore casino ship are all part of the ₹1,100 Crore investment plan for the upcoming years.

‘We plan to invest ₹300 Crore in the new offshore ship, ₹450 Crore in a new 450-room hotel for our players, and an additional ₹350 Crore in a water theme park.’ He declared, ‘This is committed and will occur.’

With these new investments, the company hopes to increase its yearly turnover from ₹1,100-1,200 Crore to ₹1,600-1,700 Crore by 2025–2026.

For its casino operations, Delta Corp. presently operates three offshore vessels in Goa.

‘Typically, our company has set costs. Our margin and bottom line both increase exponentially after our cost-to-income barrier is exceeded by all incremental revenue. By December 2024 or early 2025, the new offshore vessel will begin commercial operations in Goa, and income should begin to flow in quickly, he stated.

To accommodate its gamers, the gaming corporation maintains a 106-room hotel in Goa. According to the CFO, Delta Corp is in talks with a few brands about building a new 450-room hotel. It is anticipated to open in the last quarter of FY 25–26 and will require a capital outlay of ₹450 Crore.

In the first phase, Delta Corp also plans to create a theme park on a 100-acre land in Goa; it already has all the necessary licences to start work. On the same plot, the business intends to build a hotel, a multiplex, a retail complex, and a convention centre in two stages after FY26.

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