DELTA CORP LTD (DELTACORP) Q2 FY23 Earnings Concall Transcript

DELTA CORP LTD (NSE:DELTACORP) Q2 FY23 Earnings Concall dated Oct. 12, 2022

Call participants:

Abhinav Nigam — Head, Revenue

Hardik Dhebar — Chief Financial Officer

Pragnesh Shah — General Manager Accounts & Finance

Analysts:

Viraj Mehta — Equirus PMS — Analyst

Arun Kumar — BMO Capital — Analyst

Chirag Maroo — Keynote Capital — Analyst

Digant Haria — GreenEdge Wealth — Analyst

Dhwanil Desai — Turtle Capital — Analyst

Chintan Mehta — Prudent Broking — Analyst

Mayur Gathani — OHM Portfolio Equity Research — Analyst

Dixit Doshi — Whitestone Financial Advisors — Analyst

Anuj Momaya — Ideal Investments — Analyst

Bhavesh Patel — Patel Investments — Analyst

Rahul Sanghvi — Symphony Finserv — Analyst

Prateek Shetty — Individual Investor — Analyst

Naveen Goyal — Individual Investor — Analyst

Sumeet — Individual Investor — Analyst

Alpesh Thacker — Antique Stock Broking Limited — Analyst

Ajay — Individual Investor — Analyst

Presentation:

Operator

Ladies and gentlemen, good day, and welcome to the Delta Corp Limited Q2 FY’23 Earnings Conference Call hosted by Antique Stock Broking Limited. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Mr Alpesh Thacker, from Antique Stock Broking Limited. Thank you, and over to you, Sir.

Alpesh Thacker — Antique Stock Broking Limited — Analyst

Thank you, Faizan. Hello, everyone, and welcome to Second Quarter FY’23 Investor Conference Call of Delta Corp Limited. Today we have with us the management of Delta Corp represented by Mr. Hardik Dhebar, Chief Financial Officer of the company. The format of the discussion would be brief opening remarks by the management followed by Q&A session.

Without much delay, let me hand over the call to Mr. Dhebar. Over to you, sir.

Hardik Dhebar — Chief Financial Officer

Good afternoon, Alpesh. Thank you once again for hosting the call this quarter, and welcome everybody. Good afternoon to all. It is with great joy and pleasure I would like to state that this is a quarter which has broken couple of records when it comes to revenues as far as Delta Corp is concerned. This quarter we have recorded the highest ever revenue in a particular quarter as far as — in the history of Delta. And if I was to extend it to the six-month period ending September, this has been a record six-month period also in the history of Delta Corp. Whether you would like to look at the revenue or the EBITDA or the profit for the six months ended 30th September ’22, we have recorded the highest ever numbers in each of these categories.

What has led to this sort of resurgence is basically the domestic travel and tourism industry has been doing reasonably well. International travel still largely out of bounds, plus given the visa delays and visa constraints that are there across most of the jurisdiction, domestic travel is something which has gotten immensely benefited. And Goa, amongst the domestic travel destinations is — has always been a very popular and the most sought-after destination. Thankfully for us, every time Goa tourism does well, the rub off effect happens onto Delta Corp. While we are not saying that we are entirely dependent on tourism alone, but to a large extent visitation of people with larger numbers into the state and Goa itself, obviously, will have a positive rub on effect. That coupled with the fact that overall the economy, as far as India is concerned, while the world may be going through a difficult time, but I think India as a country and India as an economy has been doing reasonably well. The home consumption story, the domestic consumption story remains intact, consumer spending remains buoyant and high, and we believe that this is only going to get more and more stronger as we move further given the fact that we would have — India is one of the rare economies that will be growing in the higher single digits or double digits going forward.

So all this put together, it’s a very, very positive thing. Good start to the season as far as Delta is concerned because like I said, second quarter always historically has been the trend-setting quarter which sets in the tone trend and the momentum, which continues into the third quarter and the rest of the year.

In addition to that, as we all know, we are looking at a new vessel, which is likely to come in in the next 12 months time. Post monsoon, next calendar year and during the second — during the beginning of the third quarter or so is when we hope that third quarter of the next financial year is when we hope that the new vessel should be ready and operational, and that will obviously add a lot of steam to the current momentum and the growth trajectory that we have been experiencing.

As far as online gaming is concerned, there with a renewed focus and attention on sales promotion activity and customer acquisition, customer retention and customer onboarding exercise that we have taken on, in the last six to eight months we’ve seen the traction paying its results. If you look at this segment online gaming itself, if you compare year-on-year, we had done about INR40 crores to INR43 crores of revenue last year similar quarter, which is currently at INR50 crore number, that is basically the initial effects of the effort that is being put in by the operating team on the online gaming side.

With regards to the IPO update, we have received the final observations and approval from SEBI. And we as Delta Corp along with the operating team at Delta Tech are looking to embark upon the next steps of interacting with the investors, trying to assess the market and get a reasonable feel and pulse to then decide on the launch of the issue. The issue, obviously, as everyone knows, is roughly about INR550 crores divided into an offer for sale of INR250 crores and INR300 crores of primary issuance, which obviously will act as the war chest in the armory for the online business to further its growth momentum and growth trajectory. A lot of that money is going to be spent on customer acquisition, branding, and sales and promotion and marketing activities, which will — which will ensure that we have a continuous and a decent flow of customers on boarding the platform at every point of time, giving us the necessary impetus for growth.

With regards to the GST ongoing issue, there — there is — there is the matter pending with the GST Council. The council hasn’t met as the group of ministers has been discussing deliberating upon what methodology and how they should be addressing this concern of the industry, given the fact that there was this clarity at the GOM level per se with regards to understanding each of the businesses aAfter they have gone through and the presentations made by various industry forums and industry participants, including ourselves, we have been able to achieve a success in form of the fact that they have now realized the differences between the methodology in how each of these businesses, whether it’s organizing online gaming and casinos operate and therefore to use the same yardstick and measure for levying of tax on each of these businesses should not be — would not be ideal and therefore each of them needs to be looked at separately, which we believe we have been able to communicate and convey it to the UM, who seems to have taken it positively. We are now waiting for the final GOM recommendations and the GST Council to come out with the law. We are very, very positive and hopeful that it’s all going to settle the matter once and for all.

Other than that, there is no other extraordinary or any other item that needs to highlight in specific. I’m happy to open the floor for question-and-answers, and I’ll try to answer them to the best of my ability.

Questions and Answers:

Operator

Thank you very much. We will now begin with the question-and-answer session. [Operator Instructions] The first question is from the line of Viraj Mehta from Equirus PMS. Please go ahead.

Viraj Mehta — Equirus PMS — Analyst

Yeah. Hi. Thank you, Hardik. Congratulations again for great set of results. Can you tell me the number…

Operator

Sorry to intrrupt you Mr. Mehta. Please use the handset mode, the audio is not clear from your line.

Viraj Mehta — Equirus PMS — Analyst

Congratulations, Hardik, for great results. Can you tell us the visitation for this quarter, please?

Hardik Dhebar — Chief Financial Officer

That’s the only question?

Viraj Mehta — Equirus PMS — Analyst

So that is the first question. And second is, there was this, obviously, company give clarification on Daman, but if you can provide us an update of where we are with Daman as well and where is the case pending there as well? Those are my only two questions.

Hardik Dhebar — Chief Financial Officer

So visitations are more or less similar to what they were last quarter, it is about 120,000 visitations is what we have seen as of September ’22 quarter. With regards to Daman, the matter has been listed for final hearing on the weekly Board, but given the backlog and the pressure on the courts, the courts are doing their best, they sit up to 7:30, -8 o’clock at times trying to clear the backlog and the cases, but we haven’t been — we haven’t been we lucky to get hearing. And like I said, this is the final hearing. So hopefully very soon we should be able to get on to the Board and the final hearing to commence. Once the hearing commences, we are hopeful that very quickly thereafter we should have some direction to the entire matter.

Viraj Mehta — Equirus PMS — Analyst

Sure. And just one last question if I can squeeze in. In terms of, if I look at the last page of the results note that you put out on BSE, both Mr. Mody’s and your comment was that we are likely to see the growth continuing, but with a number of visitation being similar, and you had also mentioned that we are not likely to increase our entry prices, so then how does the growth come in until the new vessel?

Hardik Dhebar — Chief Financial Officer

I think we have answered this multiple times earlier that it is the quality of crowd that one needs to monitor. I would be more happier to filter the crowd in a way where I get more focused than serious people who want to sit on the table and game rather than people who come for food, drinks and entertainment. And therefore we have a built-in mechanism like which we bring it into use especially on busy weekends, where we don’t sell the entry level packages at all and it’s only the high-end packages because for a gamer it really doesn’t matter because he is anyway going to spend and most of my regulars or most of my Club Deltin members, their entries are anyway taken care of. So the moment I’m able to filter the crowd and in normal parlance, better the product mix as we call it, that will obviously yield better results in terms of revenue per person improving, while the numbers on the whole may remain more or less similar, thereby giving — thereby giving me the better revenue.

Viraj Mehta — Equirus PMS — Analyst

Thank you so much. And just — your new ship you are saying will come by Q3 ’24. Is that correct understanding? FY’23.

Hardik Dhebar — Chief Financial Officer

Next financial year third quarter.

Viraj Mehta — Equirus PMS — Analyst

Yes, thank you so much and best of luck.

Operator

Thank you. The next question is from the line of Arun Kumar from BMO Capital. Please go ahead.

Arun Kumar — BMO Capital — Analyst

Yeah. Congratulations on a very good set of numbers. I just wanted to know about the status of the IPO, like when is it likely to launch? And the second question is about — the present GST impact. What could be the worst case scenario if it is 28%.

Hardik Dhebar — Chief Financial Officer

With regards to the IPO I just gave an update in the opening remarks itself that we received approvals. We are commencing the process of road shows, etc. We will make the assessment of the market and then decide — decide on the right time to launch. And as far as we are concerned, there is no delay or no holding back from us as the company or the issuer per se.

With regards to GST also I think I gave a very detailed scenario of what the situation is presently. As regards, the rate of GST is concerned, casinos have historically, right from the day the GST was introduced have been paying 28%. So for Delta, it really doesn’t make a difference.

Arun Kumar — BMO Capital — Analyst

Okay, okay. That was all. Thank you.

Operator

Thank you. [Operator Instructions] The next question is from the line of Chirag from Keynote Capital. Please go ahead.

Chirag Maroo — Keynote Capital — Analyst

Yeah, thank you for the opportunity. Sir, in Q1 you have mentioned that our other expenses were high due to some legal expenses were taking place, but if I see in Q2 also, we are still in the same zone. So should I expect that the run rate for other expenses will be in this level only?

Hardik Dhebar — Chief Financial Officer

See, a larger chunk is on account of the Daman matter which is coming up on a daily basis, virtually daily basis, and therefore, plus the other GST related issues which are there where we have a lot of legal consultation. And the other expenses also account for lot of professional charges that these professional are not only legal fees, but you know we have marine — staff and marine consultants who are on board, plus we have a revenue share arrangement with one of — with one of the operators in one of our casinos. So all those things with their regular inflationary increases and everything will get added into this. Now to say whether the trend will continue like this, I don’t think so because hopefully sooner rather than later the legal issues are going to come to an end, and therefore those recurring expenses that we’re incurring today will stop.

Chirag Maroo — Keynote Capital — Analyst

Perfect, sir. Sir, could you tell the revenue that we had in casino from Sikkim and Nepal for the quarter?

Hardik Dhebar — Chief Financial Officer

On a monthly run rate as far as Sikkim is concerned, we are doing anywhere between INR2 crores to INR2.5 crores a month, whereas Nepal we’re doing anywhere between INR3.5 crores to INR4 crores a month.

Chirag Maroo — Keynote Capital — Analyst

Perfect, Sir. That’s it from my side. Thank you.

Operator

Thank you. The next question is from the line of Digant Haria from GreenEdge Wealth. Please go ahead.

Digant Haria — GreenEdge Wealth — Analyst

Yeah, hi. I think you alluded to a few things regarding this question, but I’ll still ask. Is that before COVID and after COVID, have you seen a change in mix of big customers which come to your casino, especially between the casual customer than the serious gamers? Or is that more or less the same?

Hardik Dhebar — Chief Financial Officer

So that is entirely something that we can control. We — on days when we have enough capacity available and people are — it’s not a busy day like a Monday or a Tuesday or Wednesday type, the crowd is what we allow freely to walk in the way we want. And on busy weekends, long weekends and on the blackout dates is where we try and control the crowd in a way where we try to filter out the serious gamers from the non-gamers. So I think that mix more or less remains the same. I don’t think there is any difference or change in that.

Digant Haria — GreenEdge Wealth — Analyst

Okay, 0kay, perfect. And then second question is on the online gaming part that we’ve been stuck in that INR40 crore to INR50 crore kind of quarterly revenue for a pretty long time. Is it more of the way the industry is or that after COVID things are cooling off?

Hardik Dhebar — Chief Financial Officer

We’ve only recorded a INR50 plus crores number once, which is in the quarter of April to June 2020, which is the first quarter immediately after the lockdown came in. Other than that, we’ve never crossed the INR42 crore, INR43 crore number. This is the first time that we’ve touched INR50 crores barring that one incident I told you April to June ’20. So I don’t think that we have been stuck. Yes, we were stuck for a while between INR38 crores to INR40 crores, then between INR42 crores to INR44 crores, but I think we’ve broken the shackles from time to time, and this is again that we have broken the shackles, we’ve touched INR50 crores. We are looking at the run rate currently into this quarter and we believe that these numbers can be replicated without much of a problem, plus our efforts and our brand spend and our marketing concentration and focus is more renewed on the online side and the team is working very hard to ensure that we get more and more registrations with now — the multi-gaming platform also coming into play completely. We’ve seen a registration spurt happening on the multi-gaming platform and the idea is that the moment we keep getting larger registrations on the the multi-gaming platform, we try to nurture and convert those into high ARPU players and nudge them towards the games which are high ARPU, thereby trying to maintain our revenue streak and profitability streak.

Digant Haria — GreenEdge Wealth — Analyst

Okay, okay. So, but would it be fair to say that the sector tailwind is not as great as when it was in the first year of COVID lockdown, it’s more of now company’s efforts which have led to this INR49 crores kind of a number, like 15%…

Hardik Dhebar — Chief Financial Officer

Obviously, there are no tailwinds or headwinds in in a business like ours honestly. The tailwind, if at all, anybody wants to call it a tailwind was the undue amount of money that got raised by most of the online companies through private equity and stuff like that and everybody went on a spending spree. Now that is what got you the tailwind. Otherwise, there was never a tailwind or a headwind situation as far as the business is concerned. It is entirely the company’s efforts which have to pay results at the end of the day. And I’m very happy to say that our team on the online side has come together very well as a unit. In the last one year we regigged a lot of things, got in a lot of talent and we — the dividends are paid now. And we are hoping with the IPO money coming in, the spend capability and the power increasing, we would only hope that this INR50 crore number is not only maintained but surpassed and grown from time to time.

Digant Haria — GreenEdge Wealth — Analyst

Perfect, thank you. Thank you so much for your explanation. Thank you. That’s it from my side.

Operator

Thank you. The next question is from the line of Dhwanil Desai from Turtle Capital. Please go ahead. Mr. Dhwanil Desai, your line is in talk mode. Please go ahead with your question. Mr. Desai, please unmute your line from your side if muted.

Dhwanil Desai — Turtle Capital — Analyst

Hello, your’re able to hear me?

Operator

Yes, sir.

Dhwanil Desai — Turtle Capital — Analyst

Yeah. Hi, Hardik. Good afternoon. So the first question is, if you can give an update on the greenfield project and any change in timeline for that?

Hardik Dhebar — Chief Financial Officer

So the greenfield project is — is the one that you’re referring to the Mopa Airport integrated resort, right? Yeah, okay. So there we received the final gazette notification approving the project and approving the area as an investment promotion area about a month ago. And then, obviously, we were in the midst of the monsoon, so it’s only by December end or January is when we will start breaking ground and actively working on the project. There have been a little bit of a delay from the original timeline given that the permissions and the approvals, given the COVID situation took a little longer than what we anticipated, but I think the wait is worth it given the fact that now it’s a single window clearance project. I don’t have to run from pillar to post, going from department to department seeking approvals and permissions, it’s only one authority, which is the GIPB which will approve, and everything will be done through that. So I think the way — the delay was worth it, the wait was worth it. It is a four-year sort of a project that we are looking at. And like I said, we start in ’23. So by ’27 or so we should be completing the entire project, if all goes well and there are no surprises during the course.

Dhwanil Desai — Turtle Capital — Analyst

Okay. And second question, Hardik is on the online gaming part. So I think you mentioned that you are upping the ante on marketing spend in terms of getting more registrations. So on a segmented level should we expect higher EBIT losses or that will happen only post IPO?

Hardik Dhebar — Chief Financial Officer

We are very stingy spenders and frugal spend, so to say. We believe in trying to maintain profitability, or at least minimize the losses while trying to achieve our objectives and goals. So I’m not saying that the losses will go away completely, but it’s not going to be a situation where you will see one quarter humongous amount of loss and the one year it will be very large loss vis-a-vis compared to nothing in the previous year or subsequent year. So I think it’s going to be a very measured spend, very focused and concentrated spend because the operating team, like I said, is as far as poker is concerned, we are the leaders, we are the masters, we understand our client, our segment that we need to target extremely well and therefore we can direct our spend in a very, very targeted and focused way to ensure that we get the maximum benefit out of the minimalistics of the spend.

With regards to the multi-gaming platform. Yes, we will be on a spending spree so that we can add more players, more registrations, more bodies onto the platform. But again there it will not be a blind kind of a call wherein we just go on a spending spree. So while, yes, there will be losses in some time to come, at least for the next six, 12 months, maybe, or maybe more. But I think it will not be a blind spend like there’s no tomorrow.

Dhwanil Desai — Turtle Capital — Analyst

Okay. Got it. Thanks a lot, Hardik, and all the best.

Operator

Thank you. The next question is from the line of Chintan Mehta from Prudent Broking. Please go ahead.

Chintan Mehta — Prudent Broking — Analyst

I have question on the new vessel that we are replacing. The new ships would have with the same margin as the existing ship that we’re replacing?

Hardik Dhebar — Chief Financial Officer

See, margin of a business should only improve from here and can only improve from here going forward. Because like I said, it’s a very high operating leverage business. Once we have achieved a breakeven, every additional rupee anywhere between 55% to 60% of every additional rupee gets added to the bottom line. So obviously when we start a new vessel, which is a much — which is going to be a much larger vessel. In the initial months, you expect some costs to be incurred and the revenue is not to be commensurate to cover the cost. But once the costs are covered and the revenue starts kicking in, it’s anybody’s guess where the margin can go up to. But I think anywhere between 37% to 45% could be the range that one could easily look at in a steady state stable environment.

Chintan Mehta — Prudent Broking — Analyst

Okay, okay. And also any extra impact on depreciation because of replacement or something?

Hardik Dhebar — Chief Financial Officer

That’s natural, right? You get a newer asset, it’s going to depreciate more rather than an asset which is already depreciated for the last 10 years.

Chintan Mehta — Prudent Broking — Analyst

Okay, okay. And second question on the Delta Tech IPO. Post IPO, what would be the structure of revenue allocation from Delta Tech gaming to Delta Corp? Any royalty or something?

Hardik Dhebar — Chief Financial Officer

There was no royalty ever paid by Delta Tech to Delta Corp. Even today there is no royalty that is being paid or received, other than the fact that there are certain business arrangements in terms of the live poker room that delta Tech has and manages and does a lot of things which Delta Corp on it’s vessel Deltin Royale. So those kind of revenue share arrangements may continue. But other than that, there is no royalty ever contemplated.

Chintan Mehta — Prudent Broking — Analyst

Okay. Okay. I have just one last request. If you could share any internal metric or something to track the Q-o-Q, like gambling revenue or average ticket size or something, anything for…

Hardik Dhebar — Chief Financial Officer

The fact that it is internal, very difficult to share no.

Chintan Mehta — Prudent Broking — Analyst

Okay, okay, no problem. Thank you. That’s from my side. Thank you.

Operator

Thank you. [Operator Instructions] The next question is from the line of Mayur Gathani from OHM Portfolio Equity Research. Please go ahead.

Mayur Gathani — OHM Portfolio Equity Research — Analyst

Hi, thank you for the opportunity. So just wanted to check if any of the existing boats will go on dry-dock in the second half of this year?

Hardik Dhebar — Chief Financial Officer

Yes. Deltin Royale will in all probability, somewhere in the fourth quarter go in for a dry-dock for about three weeks or so.

Mayur Gathani — OHM Portfolio Equity Research — Analyst

Okay. And you said the new project will come by ’27. So do we have to wait till ’27 for the revenues to start generating or in the next one or two years the revenue should start generating, right? because…

Hardik Dhebar — Chief Financial Officer

It all depends on the final structure that we go ahead with. And the way I look at it is, I think you will — we’ll have to wait for at least three years for the first revenues to start kicking in.

Mayur Gathani — OHM Portfolio Equity Research — Analyst

Okay. Minimum three years, that’s what you’re saying. And any land acquisition you’ll be doing more? I mean, you’ve already done quite…

Hardik Dhebar — Chief Financial Officer

As of now not required. Like I said, out of the 110, 120 acres that we already have, we are only utilizing 90. So we’ll have about 50, 20 acres still available. And that 90 also is going to be spread over time. So there is enough that we already have to take care of the near foreseeable future.

Mayur Gathani — OHM Portfolio Equity Research — Analyst

Okay. And we can start work from calendar year ’23, is that what you said, right? We don’t…

Hardik Dhebar — Chief Financial Officer

That’s correct.

Mayur Gathani — OHM Portfolio Equity Research — Analyst

The permission from the government also.

Hardik Dhebar — Chief Financial Officer

Sorry, sorry, I couldn’t hear you.

Mayur Gathani — OHM Portfolio Equity Research — Analyst

The permission from the government is required.

Hardik Dhebar — Chief Financial Officer

No, like I said, we’ve got the letter of intent, we’ve got the notification of the area being notified as the promotion or investment zone, and therefore it is now a single window clearance project where all approvals, permissions will come through the IPB, which is what I mentioned earlier that the wait was worth it, and it is going to be eventually beneficial that we have waited and we’re getting it done through this.

Mayur Gathani — OHM Portfolio Equity Research — Analyst

So are you the only one who is doing this or there are other competitions also who have existing boats, or ceiling with land acquisition.

Hardik Dhebar — Chief Financial Officer

So, Mayur, I think you’re getting a little confused between the situation which was there about a few — couple of years ago when they were talking of moving the boats away and bringing the casinos live on land. That policy while it was announced has not been furthered and taken shape. If that was to happen and that ever happens, you will obviously have others who will have to build it on land and give up the licenses on the river, but that is nothing — that’s not happening as of now as it appears. So that policy implementation and policy decision is on hold. What we are doing is simple. The rule currently exist that on a 5-star hotel you can have an electronic casino. So we are going to have an electronic of about 100,000, 150,000 square foot to begin with in this integrated resort project while our ships will continue to operate.

Mayur Gathani — OHM Portfolio Equity Research — Analyst

Fair, sir. I’m aware of that, sir. Thank you very much. And sir, one last question. Anything on the fees that were not paid during the COVID time, any expect…

Hardik Dhebar — Chief Financial Officer

They have not asked for anything. We have already — like everyone knows, the provision for those fees is already reflecting in the P&L and we’ve already accounted for it. So from a P&L perspective, there is not going to be any impact even if the fees were called in for. But as we speak, till today we have not received any intimation or communication with the government, one way or the other.

Mayur Gathani — OHM Portfolio Equity Research — Analyst

Thank you, sir, and all the very best.

Hardik Dhebar — Chief Financial Officer

Thank you, Mayur.

Operator

The next question is from the line of Dixit Doshi from Whitestone Financial Advisors. Please go ahead.

Dixit Doshi — Whitestone Financial Advisors — Analyst

Yeah, thanks for the opportunity. Just one question. So I think then once the new ship comes in Q3 of next financial year, one of the existing ship will get replaced. So how much revenue, let’s say that the current ship would be doing?

Hardik Dhebar — Chief Financial Officer

The smallest one will get replaced. So you know, whatever it gets replaced with is not going to be as significant as the addition is going to be. So I think it really doesn’t matter.

Dixit Doshi — Whitestone Financial Advisors — Analyst

How big it would be from the one which will get replaced in terms of price?

Hardik Dhebar — Chief Financial Officer

Iit will be bigger. The new one will be bigger than our current bigger ships. So the smallest one is too small.

Dixit Doshi — Whitestone Financial Advisors — Analyst

Okay, that’s it from my side. Thanks.

Operator

Thank you. [Operator Instructions] The next question is from the line of Anuj Momaya from Ideal Investments. Please go ahead.

Anuj Momaya — Ideal Investments — Analyst

All right. So what would be the capital outlay for the ship and how much was the capex that we are planning for this Goa integrated park that we’re building?

Hardik Dhebar — Chief Financial Officer

I think we’ve answered this question in the earlier calls, in the prior quarters, Anju. And you’ve been there on all the calls. So for your benefit, again I will repeat it. The ship will cost anywhere between INR200 crores, INR250 crores, give and take a couple of crores here and there. And the integrated township or integrated resort project spread over four years will be anywhere between INR2,500 crores to INR1,800 crores, roughly about INR3,000 crores give and take.

Anuj Momaya — Ideal Investments — Analyst

And this will be completely self funded, the INR3,000 crores or will you be looking to raise some debt at some point of time?

Hardik Dhebar — Chief Financial Officer

We are having INR600 crores of cash today, Anju. We’ll be be raising another INR250 crores through the IPO as part of the secondary sale. Current year trend shows INR400 crores of cash that we’re generating on an annual basis. We are spreading it over four years that INR16,000 crores and INR800 crores plus, so that’s about INR2,400 crores, INR2,500 crores, so we should be good.

Anuj Momaya — Ideal Investments — Analyst

Thank you.

Operator

Thank you. The next question is from the line of Bhavesh Patel from Patel Investments. Please go ahead.

Bhavesh Patel — Patel Investments — Analyst

First of all, Hardik, many congratulations on great set of numbers as well as wonderful performance. Very happy to be part of Delta family. Most of the questions have been answered, so I will — I will just once again pass on my appreciation and look forward to continued great performance. Thank you.

Hardik Dhebar — Chief Financial Officer

Thank you, Bhavesh.

Operator

Thank you. The next question is from the line of Rahul from Symphony Finserv. Please go ahead.

Rahul Sanghvi — Symphony Finserv — Analyst

Hello. Am I audible.

Hardik Dhebar — Chief Financial Officer

You are not audible, Rahul, you are not audible.

Operator

Sorry to interrupt you. Rahul, there is a disturbance coming from your line, please use the handset mode.

Rahul Sanghvi — Symphony Finserv — Analyst

Hello. Am I audible?

Hardik Dhebar — Chief Financial Officer

Yes. Please go ahead.

Rahul Sanghvi — Symphony Finserv — Analyst

Yes. So, first of all, congratulations for the good set of numbers. I just wanted to know about the other current assets that have gone up because of which the cash flow has taken a hit. So if you can give a sight on that?

Hardik Dhebar — Chief Financial Officer

First of all, why do you think the cash flow has taken a hit?

Rahul Sanghvi — Symphony Finserv — Analyst

Because it was going negative INR70 crores in the present because of other current assets.

Hardik Dhebar — Chief Financial Officer

There is no negative cash flow. Pragnesh, you’re on the call. Can you just give some details on the other current assets, please. Yeah, one second, I think there is a lot of disturbance on, I think Rahul’s end or somewhere.

Operator

Rahul, please self mute you audio.

Hardik Dhebar — Chief Financial Officer

Bulk of the item as far as the other current assets is concerned is the license fee that would be payable, so roughly about 68 — INR58 crores or INR60 crores of license fee has been paid in advance or was to be paid as of 30th September. And as on 1st October, that entire amount has been paid. So other than that I don’t think there is anything substantial in the other current assets in any case. But let me just check. Faizan, can you just check for Pragnesh, if he can be put on talk mode.

Operator

Shah, Your line is in talk mode. Please go ahead.

Pragnesh Shah — General Manager Accounts & Finance

Yeah, Hardik, you are right. That is mainly on account of prepaid license fees, which we paid in last week of September.

Hardik Dhebar — Chief Financial Officer

Yeah. So I think that’s the answer.

Rahul Sanghvi — Symphony Finserv — Analyst

Okay, got it. Yeah. Thank you.

Operator

Thank you. [Operator Instructions] The next question is from the line of Prateek Shetty, Individual Investor. Please go ahead.

Prateek Shetty — Individual Investor — Analyst

Thanks for the opportunity and congratulations on a great set of results. So my question is on the multi-gaming platform — online multi-gaming platform that we have. So what would be the current active user base for this? And can you give some numbers on the monthly new user addition? And secondly, follow-up on that would be, initially in the previous calls, Hardik, you had mentioned that we’d use this as a funnel to direct the game towards poker and rummy. So obviously, seeing that right now and what would be the conversion rate?

Hardik Dhebar — Chief Financial Officer

So as far as the strategy is concerned, that is precisely the strategy to use this as a platform and a funnel to try and attract as many more number of people onto the platform who will be on-boarded. And then over a period of time try and nudge them towards the high ARPU games. Now I am not only saying poker and rummy, but obviously poker, rummy are the highest ARPU games at this point of time. But every other ARPU — that is ARPUs, which is a high ARPU game is where we’ll try and nudge the players to ensure that our revenue and profitability is maintained.

With regards to the data on users, I think I have Abhinav one call. Abhinav can be brought into the talk mode and Abhinav can throw some light.

Operator

Abhinav Nigam, your line is in talk mode.

Abhinav Nigam — Head, Revenue

Thank you. Am I audible?

Operator

Yes, sir.

Abhinav Nigam — Head, Revenue

Okay. So as far as the data on the active user base is concerned, this — over the last two quarters our average MAUs, monthly MAUs have been 30,000 — more than 30,000 and more than 40,000 users every month. So the multi-gaming platform is seeing a heavy growth and we are quite confident that this growth will continue.

Prateek Shetty — Individual Investor — Analyst

Okay. And month-on-month what is the addition?

Abhinav Nigam — Head, Revenue

Is it Prateek?

Prateek Shetty — Individual Investor — Analyst

Yeah.

Abhinav Nigam — Head, Revenue

So, Prateek, you want to know the month-on-month addition in terms of…

Prateek Shetty — Individual Investor — Analyst

I said what is the monthly growth rate, kind of, if you could give an idea over the last six months or maybe quarter, how fast are we growing in the i online. The user base for it…

Hardik Dhebar — Chief Financial Officer

Prateek, we started the multi-gaming focus in the last six months or eight months to be precise, where we started focusing, where we started spending. So what Abhinav is saying that we are looking at 30 to 40,000 monthly MAU is happening, monthly active users happening. That’s the kind of trend that we’re seeing, and that’s where he said that its an healthy growth that we’re seeing.

Prateek Shetty — Individual Investor — Analyst

Okay, okay, got it. And so it’s too early to kind of look at the conversions as well, then I guess, right? Maybe towards the high ARPU games, another Investor call.

Hardik Dhebar — Chief Financial Officer

Absolutely, Prateek.

Prateek Shetty — Individual Investor — Analyst

Okay, understood. So my second question would be on the Daman case. So, if and when we get a hearing in our favor, how long will it take to kind of set up the casino and start generating revenues from that?

Hardik Dhebar — Chief Financial Officer

The casinos, everything is ready. It’s just a plug and play because that’s going to be an electronic casino again. So we just have to plug in the equipments and we’ll be ready to start. It is taking about about 45 days to 60 days to activate the whole thing because I’ll need to get in people, I’ll need to bring in the equipment from wherever they have been currently being utilized. And we will ensure that in 45 days to 60 days time we are up and running.

Prateek Shetty — Individual Investor — Analyst

Great. So no significant capex on the electronic equipment?

Hardik Dhebar — Chief Financial Officer

Not really, not really. So, there will be, but very insignificant.

Prateek Shetty — Individual Investor — Analyst

Okay, understood. Thanks so much. That would be all from me.

Operator

Thank you. The next question is from the line of Dhwanil Desai from Turtle Capital. Please go ahead.

Dhwanil Desai — Turtle Capital — Analyst

Hi, Hardik, just one clarification, and correct me if I heard you wrong. But you say INR3,000 crores capex for the Deltin City project?

Hardik Dhebar — Chief Financial Officer

Yes.

Dhwanil Desai — Turtle Capital — Analyst

So, earlier we were thinking about around INR1,500 crore kind of a number…

Hardik Dhebar — Chief Financial Officer

No, no. We were always talking about INR1,800 crores to INR2,000 crores. If you look at all the commodities, they have significantly risen, the costs have gone up multifold, plus being a five-year project we need to provide sort of further inflationary and contingency mechanism built in, so that would be another INR300 crores, INR400 crores easily. And if you account for all the steel prices, cement prices and other commodity prices going up, that’s the natural INR300 crores, INR400 crores. So, on the whole, about INR600 crores, INR700 crores deviation comes in from there, plus, obviously there is a import component involved in this. So if you look at the rupee-dollar, again that’s something that has gone for a toss from where we started. So I think while we — while we not off off in that sense of the term, but yeah, given the factors which are external and beyond the control of anyone, that has got an impact on the pricing.

Dhwanil Desai — Turtle Capital — Analyst

Okay. So in terms of your internal workings, does it change your attractiveness of the project because the cost increase is substantial, right?

Hardik Dhebar — Chief Financial Officer

While the cost increase is substantial, but on the other hand, if you see the way the casino business has been doing and the gaming numbers are stacking up, I don’t think it is going to make a significant impact in terms of the profitability if you are able to achieve the casino strategy right. And since we have been operating casinos over the last so many years, we believe that we will be able to pull it through. And the project obviously hovers around the entire casino setup.

Dhwanil Desai — Turtle Capital — Analyst

Okay, got it. Thanks.

Operator

Thank you. The next question is from the line of Naveen Goyal, Individual Investor. Please go ahead.

Naveen Goyal — Individual Investor — Analyst

Yeah. Thanks, Hardik, for the details. My question is that, what is week day capacity utilization for Deltin Royale? And is there any…

Hardik Dhebar — Chief Financial Officer

There is no concept of capacity. Honestly, there is no concept of capacity utilization, please understand. One could have a different mix of people where the ship is overflowing with 2,000 people a day and the revenue would not be commensurate and then you would have 500 people but the revenue would be commensurate. So there is no concept of capacity. The theoretically I could say that I have 2,000 gaming positions, average utilization by a person is 4 hours, and there are 24 hours in a day, sor 4 x 6 is 24 x 2,000. So that is hypothetical capacity. But I don’t think one should look at it that way.

Naveen Goyal — Individual Investor — Analyst

And the second question I’m having. The entry price which you are having for random gamers who are coming, that covers your fixed cost which you’re incurring on food…

Hardik Dhebar — Chief Financial Officer

Yeah, yeah, of course, everything. It covers everything, my F&B, my transportation, all. It will obviously cover. I don’t want lose money at any stage.

Naveen Goyal — Individual Investor — Analyst

So it’s a good thing if you can have more footfalls even during [Speech Overlap]

Hardik Dhebar — Chief Financial Officer

Of course.

Naveen Goyal — Individual Investor — Analyst

That’s why I asked that whether we have [Speech Overlap]

Hardik Dhebar — Chief Financial Officer

But there is no — there is no capacity constraint as such on weekdays or. But if there are people, they will be accommodated. If there are low people, where do I get people from and where does one talk about capacity there. And like I said, we have seen that over the last few years there has not been too much of a deviation whether it is a Monday or Sunday. Yes, of course, the Tuesday, Wednesday may be an odd dip in the footfalls, but otherwise by and large everything is on a very standard flow basis.

Naveen Goyal — Individual Investor — Analyst

And the last one from my side. Is there any comment you want to make with respect to immediate competition which has come in? Is there any impact because of that? As per your internal plans, as per your internal [Speech Overlap]

Hardik Dhebar — Chief Financial Officer

Which immediate competition are you referring to?

Naveen Goyal — Individual Investor — Analyst

Let’s say, the Big Daddy is there.

Hardik Dhebar — Chief Financial Officer

That they have in operations last four years. There is no immediate competition. There is no new competition that has come in. Except for that one month when they ran that program where they had a Bollywood star coming in and trying to attract as many people as they can on their vessel, I think everybody has settled in. We’ve grown from where we were in 2019. We surpassed all our numbers. In fact, I opened my call with saying that this is historical highs in terms of revenue and profit. So where is the question.

Naveen Goyal — Individual Investor — Analyst

Okay, thanks a lot.

Operator

Thank you. [Operator Instructions] The next question is from the line of Sumeet, Individual Investor. Please go ahead.

Sumeet — Individual Investor — Analyst

Am I audible?

Hardik Dhebar — Chief Financial Officer

Yeah.

Sumeet — Individual Investor — Analyst

Sir, first of all, congratulation for good set of numbers. And all the question has been asked. I have just one question. As we are coming up with the IPO and the online revenue will be moving from Delta Corp to Deltin Corp, so is there — will be…

Hardik Dhebar — Chief Financial Officer

No, it is not going anywhere. Delta will continue — the Delta Tech gaming will continue to be a subsidiary which will keep getting consultative with Delta Corp. So it doesn’t really matter from a balance sheet and P&L perspective.

Sumeet — Individual Investor — Analyst

Okay, okay. That’s all I have. Thanks for the clarification.

Operator

Thank you. The next question is from the line of Ajay, an Individual Investor. Please go ahead.

Ajay — Individual Investor — Analyst

Yeah, good evening, and congratulations for good set of numbers. I just wanted to check, I joined little late, so on the GST part, any update on that, sir?

Hardik Dhebar — Chief Financial Officer

No. So we are waiting for the group of ministers to present their report to the GST Council. Based on the interactions and the representations that were made from time to time to the group of ministers and the council, we are very happy to say that at least the fact that each of the business, whether it is the online game from casinos, from horseracing has been clarified to them that each of them is a separate business and one cannot use the same yardstick to kind of calculate or compute tax. And especially in case of casino, we have always been at 28% from the inception of GST. So from a rate perspective, we are agnostic there is no change that is going to have — there is no change that’s going to happen as far as we’re concerned on the rate front. And what we are only seeking from a casino industry perspective or a casino operator perspective is the fact that internationally worldwide the GST is calculated and completed in a certain manner, which is the manner that India was following right from the 1990s all the way through 2017 and beyond even after GST. Till about the time when a new circular comes in, which brought in some ambiguity, and thankfully because of the representations, that also has been clarified now and we are very confident and hopeful that the committee along with a group of ministers will take the right and the fair decision.

Ajay — Individual Investor — Analyst

Thanks. Thank you, sir.

Operator

Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for closing comments.

Viraj Mehta — Equirus PMS — Analyst

Well, I think we’ve touched upon every aspect of the company and the business that needed to be touched upon and thrown light to through my opening remarks or through the Q&A that we had. I’m very thankful to everybody to keep supporting Delta and participating on this call. Thank you. Alpesh, over to you.

Alpesh Thacker — Antique Stock Broking Limited — Analyst

Thank you for your closing remarks and clarifying all the doubts that the investor community had. We can close this call now. Thanks for the participation.

Hardik Dhebar — Chief Financial Officer

Thank you.

Operator

[Operator Closing Remarks]