FY14 earnings to be 'way better' than last year: Delta Corp

Below is the transcript of the interview.

Q: You are operating about three casinos in Goa but most analysts or investors are now looking at Daman quite closely. There are reports that the company is planning to launch a five-star hotel in Daman soon, what is the update on that?

A: The New Year has begun on a positive note for us. We have been working on the Daman project for a while and we are now only a couple of weeks away from launching it.

The launch will take place in two phases: the hotel will be operational in stage one, and it will be followed by other operations.

When we started the gaming business five years ago, most people including analysts were skeptical about how well it will be received in India.

But we have clocked numbers that have surprised the market and we believe this is the beginning of a new chapter and that we will witness something that will surpass everyone’s expectations.

Q: What is the earnings situation for FY14 and FY15?

A: To look at the stock and the business with a view of trailing valuations and historical numbers may not be the right way. So also for someone to quote numbers for FY14 and FY15.

But on our current-year numbers, we grew about 70 percent sequentially and about 60 percent year-on-year.

Trends worldwide say that any destination with a 10 million kind of catchment population makes for an excellent destination. Geographically, Daman is two-and-a-half hour drive from Mumbai, and one and half hours from Surat, Baroda and Ahmadabad. The catchment population in these three-four centres itself is about 50 million.

So with Daman coming in, we see an exponential growth.

So we hope that sometime next year when we sit to look at the numbers, they will be way in excess of everybody’s expectations.

Q: Can you give us an indication of how you might close FY14 because you have done sales of about Rs 400 crore in the first half of the year. By the end of FY14 where will the sales and the profits stand?

A: During the first half, we had a real estate business in Kenya that was contributing [to our earnings] in some form or fashion. We took a conscious strategic decision to wind down that business.

We invested close to Rs 70 crore in 2007-08 in that business and exited it after doubling our investment to about Rs 140-145 crore.

But even as contributions from the Kenya operations will not be there anymore, we believe that the gaming business will not only compensate for it but also surpass what we have done in the past. So, we will do way better than what we did in FY13 on a consolidated basis as well.