Revenue increased 27% YoY (our estimate: 28%) to INR2,058m in 3QFY19, primarily driven by the gaming business. EBITDA margin contracted 150bp YoY, but expanded 290bp QoQ to 40.8% (our estimate: 37.2%), driven primarily by a recovery in the online gaming EBIT margin (19% in 3QFY19 v/s 2% in the last quarter). EBITDA of INR840m, too, was higher than our estimate of INR769m. However, higher-than-expected tax restricted PAT growth to 13% YoY (INR505m v/s our estimate of INR497m).
OutlookDELTA is expected to deliver sales/PAT CAGR of 25% over FY18-21. We roll forward our target price to Dec’20E EPS of INR11/share. We continue valuing the stock at 30x P/E to arrive at a target price of INR320/share. Maintain Buy.
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