Despite poor Q4, Nirmal Bang maintains 'Buy' on Delta Corp

Moneycontrol Bureau

Brokerage house Nirmal Bang has maintained "buy" rating on Delta Corp despite the company posting a loss of Rs 10.37 crore in the fourth quarter of the financial year 2013. The stock was down 6 percent today after losing 10 percent on Friday post results.

The broking firm expects the commencement of Horseshoe vessel and operations at Thunderbird Resorts in Daman, both scheduled during first half of the financial year 2014 which will lead to an exponential growth in earnings. Nirmal Bang has a price target of Rs 100 for the stock.

“The company wrote off Rs 8 crore on account of a vessel owned by a subsidiary of Delta Corp. The company has sold off the vessel at Rs.20 crore as against the book value of Rs 28 crore, since it was not utilized by the subsidiary. Delta Corp is in the process of winding up the real estate business in Kenya as major projects are on the verge of completion. We expect strong numbers from this segment over the next two quarters,” said the Nirmal Bang note.

“With the commencement of Thunderbird Resorts in Daman and Horseshoe in Goa, the gaming segment is expected to get a booster with the addition of 2500 gaming positions getting added to the existing figure of 700. We expect the full benefits of the expanded facilities to be visible from FY’15E onwards.  Owing to its niche business model with strong entry barriers, expansion plans on the verge of completion and a focused management team, we continue to maintain our "Buy" recommendation on the stock with a target price of Rs 100,” said the note.

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