DELTA CORP LTD (DELTACORP) Q4 FY23 Earnings Concall Transcript

DELTA CORP LTD (NSE: DELTACORP) Q4 FY23 earnings concall dated Apr. 13, 2023

Corporate Participants:

Alpesh Thacker — Moderator

Hardik Dhebar — Chief Financial Officer

Analysts:

Viraj Mehta — Equirus PMS — Analyst

Karan Mehta — Nirzar Securities — Analyst

Gunit Singh — CCIPL — Analyst

Pritesh Chheda — Lucky Investment — Analyst

Chirag Lodaya — Valuequest — Analyst

Dixit Doshi — Whitestone Financial Advisors Pvt Ltd. — Analyst

Ashish Kacholia — Lucky Investment — Analyst

CA. Kanwaljit Singh — Individual Investor — Analyst

Mayur Gathani — Ohm Portfolio Egui Research Private Limited — Analyst

Presentation:

Operator

Ladies and gentlemen, good day and welcome to the Delta Corp 4Q FY 2023 Post-Results Conference, hosted by Antique Stock Broking Limited. [Operator Instructions] I now hand the conference over to Mr. Alpesh Thacker from Antique Stock Broking. Thank you and over to you sir.

Alpesh Thacker — Moderator

Thank you, Gautham. Hello, everyone and welcome to 4Q FY 2023 Investor Conference Call of Delta Corp Limited. First of all, I would like to congratulate the management for achieving INR1,000 crores of revenue milestone in our gaming business for the first time despite two years of disruptive business [Indecipherable]. And then today we have with us management of Delta Corp represented by Mr. Hardik Dhebar, Chief Financial Officer of the company. The format of the discussion would be a brief opening remarks by the management, followed by Q&A.

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

Hardik Dhebar — Chief Financial Officer

Good afternoon, everyone and thank you, Alpesh for the milestone mentioned. Yes, I think it’s been a very good year as far as Delta Corp is concerned. I know there have been a lot of confusing I would say and wrongly analyzed messages that are doing rounds on social media. So I would take this opportunity to even clarify those. First of all, yes, this is the first year, first time ever that the casino gaming business of Delta Corp has crossed the INR1,000 crore mark. As a company, on a company as a whole, we reported a number in excess of INR1,200 crores, which itself is a milestone. The online gaming business also as a gross turnover basis has crossed INR200 crores. So all-in all, it’s an year where we have touched multiple milestones.

The EBITDA for the company as a whole on an annual basis, we have seen a 50% jump in the EBITDA and now let me take a minute to explain, when I say 50% jump in EBITDA because otherwise if you see on the face of the results, the absolute number is in excess of 100%. Now the fact of the matter is, last year the operations were shut for about four months, 4.5 months. And therefore if I was to regularize, assuming that we operated for the entire year, last year as well and then compare the EBITDA to the current year EBITDA, the jump would be approximately 50% more than what we did last year. In the same breath, if I was to assume the net profit based on regularization last year and compared it with the current year, we have jumped over 150% in net profit.

So I think by any stretch of imagination or any stretch of analysis, this is a definitely good set of numbers and a good year. In addition to that if one was to look at the last full financial year when we operated, which was 2020, March 2020 was the last full-year of operation. And then we had 2021 and 2022, which were both COVID years. In that year, gaming had done INR778 crores or INR780 crores of revenue, which is currently standing at INR1,010 crores which I think is a extremely, extremely good and positive growth sign for the gaming business.

Similarly, if you look at online while we have crossed INR200 crore mark for the first time, we also would like to mention that in the month of March alone, we did a revenue of INR22.3 crores or INR22.5 crores to be precise, which is close to the highest-ever revenue, which has done in a particular month and our and that highest-ever revenue was that aberration in the COVID when the first time ever the lockdown was announced, we did a INR23 crore number. That was an aberration and therefore if I otherwise look at normal business of removing that aberration period, this is the highest-ever revenue in a single month that we have done and basis this I think we are on a better trajectory and a better-run rate and I think it’s only good times to come as far as the online is concerned, given the fact that we now have a nodal agency in form of the Ministry of Information and Technology who becomes a Ministry which kind of regulates us as us in the online space.

And then we have the entire gamut of list of laws that are coming in. We’re including the self regulatory body which will help us clear all the ambiguity around the game of chance, as well as game of skill. And also become the intervening body with all the regulators and the tax authorities as and when we need any clarity. So all-in-all, the online gaming scenario is also becoming more and more clear, the visibility is in terms of the legality of the business, the status of the business is becoming more clearer and stronger. And the status of the business and the industry at large is getting more and more recognition.

So, I think all-in-all, this is — these are all very, very positive developments. Like I said yesterday on my televised interview, with all these positive developments, we once again believe that the IPO which was kind of put on a slow track, given that there were too many ambiguities with all this clarity and confirmations, I think we are back in the game for the IPO as well and we believe that sooner rather than later we should be able to launch the issue and hopefully successfully close it as well.

Other than that nothing out of the ordinary as far as the numbers are concerned. The business is resilient, the business is strong, Goa is witnessing good footfalls, the new has started operations, of course, not fully, but that is going to be another game-changer in terms of the number of people that will be able to be brought into Goa given that the number of flights will increase. All in all, I think very well-poised and hopefully in this financial year we’ll have the new vessel, which will come in like we have always mentioned which will obviously give the boost from the next financial year onwards in terms of our capacity, in terms of our revenue and in terms of our profitability.

I think with that opening remark, I would now leave the floor open to questions if there are any and I’ll try to answer them to the best of my ability.

Questions and Answers:

Operator

Thank you very much. [Operator Instructions] The first question is from the line of Viraj Mehta from Equirus PMS. Please go ahead.

Viraj Mehta — Equirus PMS — Analyst

Hi, Hardik. Hardik, can you give some timeline on when are we expecting the new ship to come on-stream?

Hardik Dhebar — Chief Financial Officer

So we have been always mentioning it around third quarter of this financial year, but there is likely to be a slight delay, but I think in the fourth quarter, we will have the vessel coming in as it appears.

Viraj Mehta — Equirus PMS — Analyst

Okay. Second, if you want to for two months whenever Royale was working, if you were to just aggregate that for the third month, what is the likely loss of revenue that…

Hardik Dhebar — Chief Financial Officer

I’m very happy you asked that question, you know, one of the areas that people have been harping upon, oh, you’ve de-grown on margins in the third and the fourth quarter, you have de-grown on revenue in the fourth quarter. I think what is very, very important and relevant for everybody on this call to understand is the fact that we’ve always — it was it a known fact and it was always known that in the month of February, Royale is going to go for its statutory and regulatory, required Dry Dock maintenance. The period for which Deltin Royale was not operational was almost about 30 days, which is almost like one full month.

Now effectively what happens is that on a monthly basis, all my vessels put together in a month generate close to about INR90 crores of revenue, which is — which we basically translate to about INR270 odd crores for the quarter. About 60% or thereabout 60% to 70% of the revenue is generated by Royale. So of 90%, if I take 70%, it is about INR63 crores and if I take 60%, it’s about INR55 crores.

Having said that because it was not there for a month, it doesn’t mean that the entire INR50 crore or INR60 crore would have gone, otherwise my revenue should have fallen below INR200 crores or were just about touching INR200 crores. The fact that we ended up with a INR214 crore, INR215 crore number, I think we would have lost about INR50 odd crores give and take on account of the revenue — on account of the Deltin

Royale not being operational on account of the maintenance is, is what I genuinely believe. And that entire — while my costs haven’t changed at all, so if that INR50 crore would have come in or INR50 crores, INR60 crores would have come in, we would have clocked more or less the same number as we did in the third quarter and the EBITDA would have been probably slightly better, because the cost between third and fourth quarter are not dramatically different. And therefore, the EBITDA margins would have been identical to the third quarter or better than third quarter.

Viraj Mehta — Equirus PMS — Analyst

Okay, thank you so much. And in terms of run-rate, in terms of number of people, can you quantify the number of people for this quarter, number of entry?

Hardik Dhebar — Chief Financial Officer

So for the quarter I don’t know, but I think on a consolidated basis for the year ending 31st March, we’ve had I think, yeah, so for the quarter also that would be the number, would be close to about 1,25,000 people would have come in.

Viraj Mehta — Equirus PMS — Analyst

Okay. And last question, how much work has started, see now even Mopa is operational and…

Hardik Dhebar — Chief Financial Officer

So if the question is on the integrated resort, the work has not yet started, because while we have all the approvals from IBB and everything, the environmental clearance is still pending, which should be — we should be getting it I think this month or so. And by monsoon, we should be starting breaking ground or excavation kind of exercise there.

Viraj Mehta — Equirus PMS — Analyst

Okay. And any clarity on GST please, Hardik?

Hardik Dhebar — Chief Financial Officer

Well, from a offline casino gaming perspective, I don’t think there is any change as far as we are concerned because the rate was always 28%, so it’s not going to have an impact. The methodology was probably, there was an ambiguity around the methodology. But like I mentioned yesterday on my televised interview, we have been making representations to the Council and to the Group of Ministers, the Group of Ministers have visited all the casinos in Goa, have understood the business, they see what we have been saying. And also coupled with the fact that we were already paying a tax in the — prior to GST till 2017, which was calculated in a certain form and fashion. And what we are asking for is something that is also the rule worldwide. So, I don’t think we have any worry as far as that matter is concerned on the offline space.

So I think there’ll be status quo no change as far as we believe and we hope. I’m saying hope, because we finally, we want to see it happening in reality, hopefully, in the month of May or June, wherever the next GST Council Meeting happens. As far as online is concerned, I think the risk is even lesser given the fact that there is a new section of 194 ba, which has been introduced specifically for the online gaming business, which is saying how the tax reduction has to happen. Also there is maybe which is clarifying and putting in place all definitions rules, regulations. I think that is a lot of queue how the regulator should be thinking and how the Revenue Authority is thinking and should be thinking, so that also gives the direction in which the GST will work on.

So, I think all in all, I don’t see too much worry — we shouldn’t be too much worried about around the GST issue because now it looks more like a non-issue.

Viraj Mehta — Equirus PMS — Analyst

In terms of non-core asset sales…

Hardik Dhebar — Chief Financial Officer

I think we should be fair to others, there’ll be others who would want to ask a question, I would request you to come back in the queue again and ask, otherwise it will become a monolog between you and me, not fair on the other participant please.

Viraj Mehta — Equirus PMS — Analyst

Sure, thank you so much.

Operator

Thank you. The next question is from the line of Karan Mehta from Nirzar Securities, please go ahead.

Karan Mehta — Nirzar Securities — Analyst

Hello?

Hardik Dhebar — Chief Financial Officer

Hello, yes.

Karan Mehta — Nirzar Securities — Analyst

Hello?

Operator

Hello, Mr. Mehta, please go ahead, you’re audible.

Karan Mehta — Nirzar Securities — Analyst

Yeah, thank you for the opportunity. I just have a couple of queries. So firstly, can you please provide breakup of revenue between the high-end that is big-ticket size gamblers and average ticket size gamblers?

Hardik Dhebar — Chief Financial Officer

We don’t have any such breakup that we maintain or we have anything, because again, if you see the average GGR that we generate per person is about anywhere between 14,000 to 16,000 or 14,000 to 17,000 a head. And I don’t know whether you have been on earlier calls as well or no, but we are a company which is wanting to be more like a family destination and a retail attracting customers. There are the high rolling business is not something that we rely upon and it’s very, very miniscule as far as our larger picture is concerned. So that’s my answer to you.

Karan Mehta — Nirzar Securities — Analyst

Okay, okay. And just one more, so if you can provide what is the operational cost structure and the employee strength for all our ships?

Hardik Dhebar — Chief Financial Officer

When you say what is the cost structure — employeed strength for the gaming business as a whole is close to about 3,000 people. And what do you mean by cost structure?

Karan Mehta — Nirzar Securities — Analyst

So, the fuel costs and…

Hardik Dhebar — Chief Financial Officer

So 75, so these details are very balance sheet number details, I think it will be, well, I can give you a broad breakup, but I think it will be better if you can get-in touch with my colleague, Pragnesh Shah, he will be able to decipher the balance sheet line-by-line, item-by-item, if you so desire. But broadly 75% of the costs are fixed in nature, which basically includes the license fees that are payable, the employee cost which is incurred. These are the two large ticket broadly fixed-cost items, everything else is in relation to how the business attracts visitation and people because food, beverage, alcohol, the transportation, everything is linked to the number of people and is linked to the visits that the Board has to do up and down to drop the people and all.

So I think anywhere between 20% to 25% of the cost is a variable-cost and 75% to 80% is fixed-cost. It’s a very-high operating leverage business, which is why I said that the INR55 crores, INR60 crores whatever number you attribute to the loss of revenue on account of Deltin

Royale not being operational, one could easily add a 60% of that revenue or thereabouts to the EBITDA and profit.

Karan Mehta — Nirzar Securities — Analyst

Okay, okay, that was helpful. And just if I can squeeze in one more question, so do we have any membership theme for our hotel business and what’s the average price for membership and the revenue generation from this theme and…

Hardik Dhebar — Chief Financial Officer

We are not a hospitality company in that sense of the term, gaming is our main stay and main focus, hospitality is a complementary business. I think we were contemplating some sort of a membership or a membership program, because and that also only for the Daman hotel if at all. I don’t know exactly whether that scheme was launched or no. And even if it is, I don’t think it is any significant in terms of making any impact on the revenue or contribution, but yes, we have a membership program as far as our gaming business is concerned, which is called Club Deltin and we have a entry-level membership program called Deltin Select which have which we are focusing and which we believe is something that will help us get better revenue mix in terms of the quality and the type of people who we attract on a day-to-day basis.

Karan Mehta — Nirzar Securities — Analyst

Okay, okay.

Hardik Dhebar — Chief Financial Officer

And there is no fee associated with it because it is by invitation.

Karan Mehta — Nirzar Securities — Analyst

Okay, okay. Okay, thanks a lot for the clarity. This was very helpful. Thank you.

Operator

Thank you. The next question is from the line of Tarang from Old Bridge Capital. Please go ahead.

Unidentified Participant — — Analyst

Hi, good evening and thank you for the opportunity. Just a couple of questions, one I mean, on the online piece, right, INR23 crores how — what drove this and how sustainable do you think, I mean, is there an element of seasonality or some added promotions?

Hardik Dhebar — Chief Financial Officer

No, I don’t think there is a, Tarang, this is not a seasonal business at all honestly speaking, yes, there would be periods or weeks or maybe a month here and there, which may be a little slow like say for example, April is a little slow given that a lot of focus is on IPL and a lot of focus is on fantasy leagues at this point of time, but I don’t think otherwise this is a seasonal business. And I think, Tarang, you should rather than saying what, you should be happy that your company is working and you should congratulate the marketing team and you should congratulate the business team at Delta, Delta Tech given that they’ve been putting in this effort of, you know, reactivation, retention for the last one year, which we have been talking about from October 2022 onwards. And I think the results are now showing that you have better quality players, the guys who had gone redundant or dormant have been reactivated, retention is being looked upon.

And I think poker is a game where you have to ensure that people who are on your platform stick to your platform for a longer period of time and that is the effort that we are working on. Obviously, we will have a much detailed and a more aggressive marketing plan and a sales promotion plan once the IPO happens, but till then in our a little bit, you know, kind of measured aggression, we are focusing on the growth and we believe that this is definitely sustainable, because we are already in April and I think we are still witnessing similar amount of traction.

Unidentified Participant — — Analyst

I know. I mean, where I was coming from, I mean barring the June 2020 quarter which is Q1 of FY 2020, right, during the wave, right, the business has not maybe perhaps December 2022…

Hardik Dhebar — Chief Financial Officer

No, no, Tarang, then you…

Unidentified Participant — — Analyst

Where I was coming from — whereas coming from is that INR22 crores revenue in March is quite an uptick and I was just looking at how sustainable do you think this is going forward?

Hardik Dhebar — Chief Financial Officer

It is definitely sustainable, because we are not doing a one-off flash sale kind of a thing which has attracted people, it’s a continued effort which has happened from last year when we did the course correction in, first course correction was October 2021 when we realized that the support of April, June is not a sustainable support. So that was one course correction. And then second course correction happened from June 2022 onwards, wherein we started to work on something what is called as Poker 2.0 which I think we’ve spoken about earlier as well, which included application changes, a lot of minor changes, etc, etc and with the renewed focus on retention and reactivation.

So I think it’s an effort and it’s a continuous process that we were working upon which is now paying results and we believe we’ll continue to work on this and better it in the future.

Unidentified Participant — — Analyst

I understand. That’s helpful. Just a book-keeping question on cash flows, other current assets have been through increased about 130, 140, is it license fee paid-in advance?

Hardik Dhebar — Chief Financial Officer

I think it is only the license fee, but I can ask Pragnesh who is on the call, Alpesh, if you can unmute Pragnesh, he will reconfirm the numbers, but yes, it is license, it is license fees. Pragnesh will, but I think it’s license fee. But if you want, I can ask Pragnesh to unmute himself and he can answer that question, if there is anything else.

Unidentified Participant — — Analyst

No that’s about it. That’s helpful. Thank you so much.

Operator

Thank you. We have the next question from the line of Gunit Singh from CCIPL. Please go ahead.

Gunit Singh — CCIPL — Analyst

Hi, sir. Thank you for this opportunity. Most of my questions have been answered [Speech Overlap].

Hardik Dhebar — Chief Financial Officer

You are echoing, if you can please pick-up the handset?

Gunit Singh — CCIPL — Analyst

Yeah, is it better now?

Operator

Yes, please.

Gunit Singh — CCIPL — Analyst

Yeah, most of my questions have been answered, but I have a couple of questions, one is regarding the new vessel that is coming up. So currently our vessel business does about INR50 crores to INR60 crores of business on a monthly basis. So…

Hardik Dhebar — Chief Financial Officer

I think you’re wrong there, INR90 crores when I mentioned as a gaming business, 90 almost about 95%, 90% to 95% of that business comes from Goa. And within Goa, it is within Goa 95% of the business will come from the vessel, so I don’t know where you’re getting that 50% to 60%.

Gunit Singh — CCIPL — Analyst

All right. So with the new vessel coming in, what kind of a expansion in the monthly revenues can we expect?

Hardik Dhebar — Chief Financial Officer

Well, it’s anybody’s guess, you know, it’s very difficult to put a number, but we genuinely believe that in terms of capacity, we will be going up at least 2.5, three times our existing capacity. And this is a business which obviously is a people’s business, more the number of people you are able to bring in on the vessel, you definitely will end-up being much more so. I don’t want to preempt anything and I don’t want to give a number, but I think the fact that we are going to be going up 2.5 to three times in capacity, I think anybody can put a number fairly easily to that.

Gunit Singh — CCIPL — Analyst

And will the old vessel go out of operation when once it comes in?

Hardik Dhebar — Chief Financial Officer

So, we have relicensed it, so I can’t operate more than three boats.

Gunit Singh — CCIPL — Analyst

All right. And my last question would be on the Goa parcel. So what is the update on, have we started…

Hardik Dhebar — Chief Financial Officer

I just answered that question, my friend that we have got all our approvals except the environmental clearance, which is expected this month or next month and we believe that during the monsoons, we’ll be able to start work on that in terms of excavation and other areas.

Gunit Singh — CCIPL — Analyst

All right. And on the Daman Casino front, what is the update, the current update?

Hardik Dhebar — Chief Financial Officer

8th of June is the date for the next date of hearing. We had a hearing on 11th of April where obviously, while the matter was called out and mentioned, they did not take-up the final hearing in-full flow because the judge believed that the final hearing will require details and times and they will not be able to do justice before the court went on vacation. And therefore they have given a new date for directions on 8th of June.

Gunit Singh — CCIPL — Analyst

All right, that’s all from my side. Thank you.

Operator

Thank you. The next question is from the line of Pritesh from Lucky Investment. Please go ahead.

Pritesh Chheda — Lucky Investment — Analyst

Sir, just wanted to understand what will be the net opex addition or the next fixed cost addition that you would see on the addition of ship, annual or quarterly basis whichever you’re comfortable with and a ballpark number…

Hardik Dhebar — Chief Financial Officer

I will give those details separately to you, Pritesh, we can talk about it.

Pritesh Chheda — Lucky Investment — Analyst

Okay. And my second associate question is, whenever these new ships come on ball, usually on the year one, what kind of utilization have you experienced on these ships, even let’s say a competitor also had come up with a new ship somebody as backed so, usual your one utilization is what…

Hardik Dhebar — Chief Financial Officer

See, the competitor, I will not be able to comment, but I can take it [Speech Overlap] example Deltin

Royale when we had introduced. I think we haven’t, we haven’t seen a weak opening at all. We’ve always been lucky or since the demand is so high because as I said, Goa attracts close to about 10 million people a year, which is one crore people a year in visitations, okay? And the total intake of all the vessels put together today will not be more than, I don’t think more than 20 lakhs a year. So you have 80 lakhs people who are on service even today, so I think the demand is very-high. And by virtue of that, you will not see utilized, under-utilized assets in any case.

Having said that, again this is not a business like the steel plant or the cement plant that you operated 100% capacity or 110% capacity. It’s a very, very subjective business in terms of the quality of people that you get on-board, but to answer your question, I think we have been fairly utility from day-one.

Pritesh Chheda — Lucky Investment — Analyst

Okay. And you are usually in your past experiences on bringing a ship on ball, are you EBITDA positive in the year one of operation?

Hardik Dhebar — Chief Financial Officer

No, no, this business breaks even effectively almost from day one, but yes you are right. For the first couple of months still because the costs will come in earlier, so say for example, if I have to launch a vessel in the month of January, I can’t start recruiting in the month of January, right? So I’ll have to start recruiting earlier. So to that extent, you will be EBITDA negative for a few months when you start operating that business, but I think the payback period for Deltin

Royale where we had invested close to about 170 odd crores was less than six months.

Pritesh Chheda — Lucky Investment — Analyst

EBITDA, sorry I missed less than six months or what EBITDA break even?

Hardik Dhebar — Chief Financial Officer

No, the payback period for the entire investment.

Pritesh Chheda — Lucky Investment — Analyst

Okay, okay, okay. And I had one more question, but I simply forgot, I’ll come back in the queue [Speech Overlap].

Operator

Thank you. The next question is from the line of Chirag Lodaya from Valuequest. Please go ahead.

Chirag Lodaya — Valuequest — Analyst

Yeah, hi, Hardik. I just wanted to understand what is the reason for delay in this new ship?

Hardik Dhebar — Chief Financial Officer

No, these are operational yard related issues, sometimes you know, the steel supply-related issues, nothing else.

Chirag Lodaya — Valuequest — Analyst

Okay. And what will be the capex, I think we have…

Hardik Dhebar — Chief Financial Officer

And obviously, we started building the vessel just around the time when we thought the COVID wave has ended. But again it resurfaced and there were constraints in labor availability and stuff like that. So it’s all issues which are kind of uncontrolled — uncontrollable to some extent, but otherwise from other, no other angle there is a delay, but yes, the fact of the matter is, there is a slight delay.

Chirag Lodaya — Valuequest — Analyst

Right. And what percentage of capex or absolute capex is yet left and how much you would have spent on this?

Hardik Dhebar — Chief Financial Officer

I think in terms of the vessel, which is already built is about 70%, so similar amount in capex also, so about 30%, 40% is yet to go.

Chirag Lodaya — Valuequest — Analyst

Okay. And what is the total capex?

Hardik Dhebar — Chief Financial Officer

So, I think we are looking at 200 and close to about INR250 crore in number. We have spent roughly about INR140 crores, INR150 crores, INR160 crores and 100, 220, 130 crores yet to go.

Chirag Lodaya — Valuequest — Analyst

Got it. And just lastly this entertainment city, what kind of capex we are looking in FY 2024?

Hardik Dhebar — Chief Financial Officer

Not substantial.

Chirag Lodaya — Valuequest — Analyst

Not substantial. Okay, thank you.

Hardik Dhebar — Chief Financial Officer

Because like I said, we’ll be breaking ground only in the month of June, July August, somewhere there. So initially, it will be all excavation and groundbreaking and the basic stuff. The largest stuff will probably come towards the end of FY 2024 or early 2025.

Chirag Lodaya — Valuequest — Analyst

So is it fair to assume this will only come on stream if at all in FY 2027, 2028 now?

Hardik Dhebar — Chief Financial Officer

Yeah, yeah, we’ve always said 2027.

Chirag Lodaya — Valuequest — Analyst

Okay, okay. Yeah, thank you.

Operator

Thank you. The next question is from the line of Sakshi from Swan [Phonetic] Investment. Please go ahead.

Unidentified Participant — — Analyst

Hello, sir. So my first question is, I wanted to understand what are our EBITDA margins on the online gaming business?

Hardik Dhebar — Chief Financial Officer

Online gaming business, I think we are just about breaking even currently, the reason is very simple. We are investing everything that we earn from the Poker business back into the rummy, as well as the fantasy or the multi gaming platform as we call it, which is in the kind of build stage. And therefore at this point of time online gaming, we are just about breaking even.

Unidentified Participant — — Analyst

Okay. And additionally what…

Hardik Dhebar — Chief Financial Officer

If you look at Poker as a vertical, I think we — our EBITDA’s would be in the range of 30% or thereabouts, but everything that we generate on Poker is ploughed back into the multi gaming platform and that’s on a consolidated basis, which is Poker, plus the multi gaming it’s a breakeven.

Unidentified Participant — — Analyst

And in FY 2024, what is the kind of expenditure that we will be doing on marketing and other things, the expenses?

Hardik Dhebar — Chief Financial Officer

So, as a rule of the thumb, I think about 50% goes on marketing and other 17%, 18% goes on sales promotion and business promotion plus back etc all put together. So at any given point of time, you know, 50% to 60% of the revenue that we generate goes back into marketing, sales promotion activity.

Unidentified Participant — — Analyst

Okay. And I wanted to understand that once the Daman casino is functional, what sort of revenue potential can we generate from there?

Hardik Dhebar — Chief Financial Officer

We have never factored in Daman casino ever in our discussion. We believe that that is for our investors who believe in us, that is an option value. What I can only tell you is, that we genuinely believe based on the international demographics, which are very easily available and it’s an internationally accepted fact that a casino with a 10 million population in a four-hour driving distance is a goldmine destination and you have examples in Las Vegas itself, Foxwoods in Connecticut and whether you even look at Macau, for that matter, it is the Mainland China which feeds into Macau. And therefore, if you have a 10 million population in a four-hour driving distance, it’s a goldmine. Daman, I will only give you the statistics and you can then imagine whether it can be as big as Goa or bigger than Goa, Daman has a 50 million population in a four hour driving distance, which is five times the population that makes it a goldmine standard casino destination anywhere else in the world.

So I think it’s anybody’s guess where it can be and like I said, we want our value investors to consider as an option value as and when it happens, it is going to be the jackpot. So it’s no, we have never in the past or we would not like to factor in any revenue from the casino business as from the casino in the wallet despite…

Unidentified Participant — — Analyst

Okay, thank you.

Operator

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

Dixit Doshi — Whitestone Financial Advisors Pvt Ltd. — Analyst

Yeah, just couple of questions, firstly on the dry-dock. So typically, in how many months your vessel goes for a dry-dock?

Hardik Dhebar — Chief Financial Officer

It has to go at least once in a period of three years and in some cases in five year. So I think we believe that for Deltin Royale it will be now, next will be in that in five years’ time.

Dixit Doshi — Whitestone Financial Advisors Pvt Ltd. — Analyst

Okay. And in Q4, was there any one-off cost of dry-dock also other than the revenue loss?

Hardik Dhebar — Chief Financial Officer

No, the dry-dock gets amortized over the period of the next dry-dock. So there is no hit on account of the dry-docking cost which will — get hit in the P&L in the month of the dry-dock itself.

Dixit Doshi — Whitestone Financial Advisors Pvt Ltd. — Analyst

Okay. And just one clarification, you mentioned that next year Daman case hearing is 8th June?

Hardik Dhebar — Chief Financial Officer

That’s correct.

Dixit Doshi — Whitestone Financial Advisors Pvt Ltd. — Analyst

Yeah, okay.

Operator

Thank you. The next question is from the line of Nitin from MC Research. Please go ahead.

Unidentified Participant — — Analyst

Yes, thanks for the opportunity. I would like to know your views on the ban on online gaming in Tamil Nadu and will — that is spread to other states and how is it going to impact our business, online gaming?

Hardik Dhebar — Chief Financial Officer

I think this was asked to me yesterday on ET now as well and like I said, unlike rummy which is very focused and more concentrated in the southern states, poker is a game, which is more thinly spread and it’s a pan-India game. Therefore, a particular state banning or otherwise is not something that impacts very heavily as far as we are concerned, because like I said, we are more pan-India, more widely spread. But yes, there could be a knee-jerk reaction of sorts because immediately what happens is that the users in that state kind of get impacted, but eventually the business finds newer geographies, newer locations and newer ways to basically come back to its original state and grow from thereon.

Unidentified Participant — — Analyst

Yeah, but what if other states also start following the suite and start banning, is there any…

Hardik Dhebar — Chief Financial Officer

That is a business risk which is there with every business. We are a country where coal licensees have been canceled. We are a country where telecom licenses — 121 telecom licenses have been canceled and a lot of things have happened. So you know, that is something — it’s not unique to one particular business, mining in Goa has been banned for the last, how many years and it was going on for how many years earlier. So that is a risk. I don’t know how can any business mitigate that risk.

Dixit Doshi — Whitestone Financial Advisors Pvt Ltd. — Analyst

Sure, okay. Thank you. Thanks for answering my question.

Operator

Thank you. The next question is from the line of Ashish Kacholia from Lucky Investment. Please go ahead.

Ashish Kacholia — Lucky Investment — Analyst

Yeah, good afternoon, Hardik. I want to ask you if foreign tourists are allowed to play in casinos and repatriate their foreign currency?

Hardik Dhebar — Chief Financial Officer

First of all, I am very happy Ashish, you are on the call and you are asking your question.

Ashish Kacholia — Lucky Investment — Analyst

Thank you very much, Hardik.

Hardik Dhebar — Chief Financial Officer

So, Ashish, yes, foreign tourist are definitely allowed. We have always been having foreign tourists to come in once in a while. But we — as I have always mentioned, we are basically a domestic market, catering to domestic market, more than 99% of my visitations and revenue comes from Indian tourists.

Ashish Kacholia — Lucky Investment — Analyst

But the question is, suppose a foreigner comes, he changes dollars into rupees…

Hardik Dhebar — Chief Financial Officer

I will accept dollars, we have a conversion license, Ashish, we accept money and you these Weizmann Forex and the others basically help us convert dollars into rupees, but if he or she wins, we do not pay in the foreign currency. We will only pay him in rupees.

Ashish Kacholia — Lucky Investment — Analyst

Then I mean the [Technical Issues].

Hardik Dhebar — Chief Financial Officer

Your voice is cracking, Ashish, I can’t hear you. Hello? Hello?

Operator

Mr. Ashish Kacholia your line had a disturbance, we request [Speech Overlap].

Ashish Kacholia — Lucky Investment — Analyst

Can you hear me?

Hardik Dhebar — Chief Financial Officer

Yeah, yeah, I can hear you, Ashish.

Ashish Kacholia — Lucky Investment — Analyst

So basically the question is, if the person wins in rupees, he can’t convert it back into dollars, is it?

Hardik Dhebar — Chief Financial Officer

Not on my plate, not with me, he can go to an official conversion person and do whatever he has to.

Ashish Kacholia — Lucky Investment — Analyst

But anyway it’s a small number. Thank you very much, sir.

Hardik Dhebar — Chief Financial Officer

Not even inconsequential, Ashish.

Ashish Kacholia — Lucky Investment — Analyst

Got it, thank you.

Operator

Thank you. We have the next question from the line of CA. Kanwaljit Singh, an Individual Investor. Please go ahead.

CA. Kanwaljit Singh — Individual Investor — Analyst

Good evening. My question is regarding the gaming IPO and regarding the real estate investment that the company has planned. I have listened to that on CNBC TV18, what is the update on that?

Hardik Dhebar — Chief Financial Officer

So what real-estate investment are you talking of Kanwaljit?

CA. Kanwaljit Singh — Individual Investor — Analyst

There was an interview on CNBC TV18, where it was mentioned that you’re going to make some investment in real estate.

Hardik Dhebar — Chief Financial Officer

I don’t think you heard it right, it would have been an integrated casino resort that may be spoken off because there is no real estate investment that we have done, except for a small project that we are doing in Goa on a land, which historically we have held which is now getting converted into some residential flats and we are selling it off, because we have to exit the land, that’s the only — yeah, but that’s a one-off, it’s not a real-estate project in that sense of the term, because we are not into real-estate as Delta, it’s a land which had been acquired originally to build a hotel, which we never built because we bought a ready-made hotel, that land was with us for a very long-time, we didn’t know what to do with it. Therefore, we are just developing and it will be sold in the next 18, 24 months, that project will be over, the money that we have logged in form of the land which is close to about INR400 crores, with some interest etc will come and we’ll get our cash flow back, that’s about it.

CA. Kanwaljit Singh — Individual Investor — Analyst

So what will be the sale value or near about?

Hardik Dhebar — Chief Financial Officer

INR250 crores to INR300 crores max.

CA. Kanwaljit Singh — Individual Investor — Analyst

So what were the gaming IPO, what was the update on that?

Hardik Dhebar — Chief Financial Officer

I already said that it was on-hold because of a lot of dis-clarity and ambiguity around a lot of things which are now getting clarified and the mood is buoyant. We will be launching the IPO soon. You know, it is impossible for me to give a time as to we’ll do it today or tomorrow, but yeah, we are now ready and working with the new set of audited numbers that have come in, we need to update the DRHP because that is what is required under law. We have our approvals which are valid till the month of — till October 2023, but I’m only saying that we are very, very hopeful that we’ll be doing — making announcements very soon.

CA. Kanwaljit Singh — Individual Investor — Analyst

So what amount of dilution that you will be doing?

Hardik Dhebar — Chief Financial Officer

The minimum required is 25%.

CA. Kanwaljit Singh — Individual Investor — Analyst

So that will be — so 25%.

Hardik Dhebar — Chief Financial Officer

No, I’m not saying the minimum required is 25%, it all depends on what is the valuation that I will get, what I’m looking at, the issue size is known, it’s a INR550 crore issuance. So I think anywhere between I think 60%, 70% to 75% kind of — so it will be about 22%, 25% to 30% dilution if I may just use that term. I think that is how it will be, but it all depends on pricing.

CA. Kanwaljit Singh — Individual Investor — Analyst

So it will be NFO or what kind of thing, will there be any permanent…

Hardik Dhebar — Chief Financial Officer

Kanwaljit, all the details are out in the public domain. It’s a mix of fresh issuance and offer for-sale, the fresh issuance is for I think 300 and 250 is offer, it’s all there out in the public.

CA. Kanwaljit Singh — Individual Investor — Analyst

Okay, okay, I’m getting — getting reconfirmed. Thank you.

Operator

Thank you. The next question is from the line of Viraj Mehta from Equirus PMS. Please go ahead.

Viraj Mehta — Equirus PMS — Analyst

Thank you, Hardik, for taking my question again. Just one last piece, I wanted to ask you about the non-core assets, the Goa one you’re talking you just alluded to. By what time do you think that will be completed, whatever…

Hardik Dhebar — Chief Financial Officer

I just said 18 months to 24 months we should be completely out of it.

Viraj Mehta — Equirus PMS — Analyst

And what will be the cash on books as of year ending now?

Hardik Dhebar — Chief Financial Officer

Year ending as on 31st March, it was INR535 crores.

Viraj Mehta — Equirus PMS — Analyst

Including investments?

Hardik Dhebar — Chief Financial Officer

When you say including investments is basically mutual funds and debt is…

Viraj Mehta — Equirus PMS — Analyst

Liquid funds.

Hardik Dhebar — Chief Financial Officer

Yeah, yeah, so that is what I consider as cash was, nobody keeps cash in the current account, right?

Viraj Mehta — Equirus PMS — Analyst

Right, right. So, thanks. Thank you so much.

Operator

Thank you. The next question is from the line of Chirag Lodaya from Valuequest. Please go ahead.

Chirag Lodaya — Valuequest — Analyst

Yeah sir, just one book-keeping question, what is the tax-rate for us in FY 2024, last two quarters tax rate is quite low, so just trying to understand?

Hardik Dhebar — Chief Financial Officer

No, no, so we — basically the merger of Daman hospitality into Delta Corp and we had some carrying forward losses in Damn hospitality, which we were able to offset against the taxable income in Delta. Therefore, there has been no tax. Otherwise, we’ve always been at the 25% tax rate.

Chirag Lodaya — Valuequest — Analyst

So next year will be at 25% right?

Hardik Dhebar — Chief Financial Officer

Yes, that should be right.

Chirag Lodaya — Valuequest — Analyst

Okay, thanks.

Operator

Thank you. We have the next question from the line of Ajit from Nirzar Securities, please go ahead.

Unidentified Participant — — Analyst

Hi, sir. Firstly, congratulations for the good set of numbers. Sir, I have two questions, the first one is regarding the recent High Court order dated 6th of April 2023, regarding the annual recurring fees of around INR320 crores or INR321 crores. Sir, just…

Hardik Dhebar — Chief Financial Officer

The INR321 crores is all casinos put together.

Unidentified Participant — — Analyst

Yes, I understand that, sir…

Hardik Dhebar — Chief Financial Officer

You should ask it more specifically because there are others on the call who may not know and when you ask a question to me it will be attributed as if the entire 321 is mine.

Unidentified Participant — — Analyst

No, sir, I was about to complete the question. So sir, my question is specifically that only, how much is our liability out of this and have you provided enough for that?

Hardik Dhebar — Chief Financial Officer

Our liabilities have already been provided in the books of accounts in the years when they were payable and due, so there is no additional liability that will come on account of this order, one. We’ve already based on the Supreme Court direction towards when we had gone to the Supreme Court against this High Court order, we have already paid 50% of it. And again, this order is being challenged in the Supreme Court, we are filing an SLP and we are very hopeful that justice will prevail.

Unidentified Participant — — Analyst

Okay, understood. And the second question is on the hospitality business. Sir, what is our ARR and occupancy rate in [Technical Issues]?

Hardik Dhebar — Chief Financial Officer

So Goa, my occupancy rate is close to about 75% and the ARR will be in the region of INR5,700, in Daman my occupancy rate will be about 52% and the ARR will be about close to INR7,000.

Unidentified Participant — — Analyst

And sir, since last two years like all the like hospitality business is being doing good so and we are making operational losses. So, any view on that, sir?

Hardik Dhebar — Chief Financial Officer

We’re going to — we’re not making operational losses, because you have to understand Daman is in fact making money even after depreciation. As far as Goa is concerned, please appreciate that that is a hotel, which we do not sell, we do not market. We basically try and use then for most of our casino guests who are our club Deltin members. So that revenue doesn’t get generated in real sense of the term.

Unidentified Participant — — Analyst

Okay, understood, sir. Thank you so much.

Operator

Thank you. [Operator Instructions] The next question is from the line of Tarang from Old Bridge Capital. Please go ahead.

Unidentified Participant — — Analyst

Hi, just a follow-up on the cash in books, if I look at March 2022, INR200 crores of cash between investments and cash-and-cash equivalents…

Hardik Dhebar — Chief Financial Officer

No, that is wrong, Tarang. 1st of March, 1st of April 2020…

Unidentified Participant — — Analyst

31 st March 2020 though.

Hardik Dhebar — Chief Financial Officer

So, 1st April, I’m saying we had 535, INR140 crores, I don’t know where you’re getting this INR700 crores number from.

Unidentified Participant — — Analyst

It’s actually from your balance sheet, but I’ll take it offline note…

Hardik Dhebar — Chief Financial Officer

No, no, sir, Tarang, if you include investments, my investments will include at only shares also.

Unidentified Participant — — Analyst

Yeah, yeah I’m including those, I’m including those.

Hardik Dhebar — Chief Financial Officer

So that will, I am talking pure cash, when I say INR535 crores is pure cash my friend.

Unidentified Participant — — Analyst

Got it, got.

Hardik Dhebar — Chief Financial Officer

Mutual funds, fixed deposits and cash in the current account and the bank account. That’s it. I’m not including my investments, if I include them, that number will be much higher even today.

Unidentified Participant — — Analyst

Perfect. Got it, that’s the clarification I was seeking, thanks.

Operator

Thank you. The next question is from the line of Mayur Gathani from Ohm Portfolio Egui Research Private Limited. Please go ahead.

Mayur Gathani — Ohm Portfolio Egui Research Private Limited — Analyst

Hi, thank you for the opportunity, sir. Just update us on anything on Nepal and Sikkim, how they’ve grown year-on-year basis? How is the business there?

Hardik Dhebar — Chief Financial Officer

So, Nepal is predominantly just one year, Mayur, because you know, it started operations only post COVID after 18 months, only 2022, so its first year and we are doing about INR4 crore a month kind of a run-rate and I think there is potential to grow higher, grow further from here because once the Kathmandu as a destination in Nepal, as a destination comes back full to its pre-COVID times, I think we can do better than this. As far as Sikkim is concerned, again Sikkim is settled at around about INR2 crores, INR2.5 crores a month, which is I think double from what it was earlier and even pre-COVID.

So I think both the destinations have kind of matured now and are stabilizing.

Mayur Gathani — Ohm Portfolio Egui Research Private Limited — Analyst

Okay. And sir, anything new in the pipeline that we are considering or something opened up somewhere for us on the license front where we can open?

Hardik Dhebar — Chief Financial Officer

No, nothing, nothing, nothing, nothing significant that I need to mention.

Mayur Gathani — Ohm Portfolio Egui Research Private Limited — Analyst

Okay. Great sir, thank you very much and all the very best, sir.

Operator

Thank you. Ladies and gentlemen, we will take the last question from the line of Bhavesh Patel from Patel Investments. Please go ahead.

Unidentified Participant — — Analyst

Thank you for the opportunity and Hardik and entire team congratulations on great set of results, as well as performance. My question is around the new ship that we expect in the quarter of Q4, I mean or around October, let’s say Q3…

Hardik Dhebar — Chief Financial Officer

No I said that we were talking about Q3 and there is a slight delay, so it can go to Q4, you’re right. So you’re initial Q4 was correct, you can tell that go on, please.

Unidentified Participant — — Analyst

Okay, okay. And associated with that, do we see a significant hike in the licensing because the capacity will be very-high. And then, will that impact our margins, Hardik?

Hardik Dhebar — Chief Financial Officer

So, license fee is a cost, which is like fixed-cost whatever that fee is, we’ll have to pay, but we’ve always seen, even when the license fee for our casinos was increased multi-fold from INR5 crores to INR10 crores and INR10 crores to INR30 crores, you may feel a depletion initially, but I think the revenue growth is much more ended more than compensates any kind of fixed-cost hike.

Unidentified Participant — — Analyst

Fantastic to know and I’m sure of course that also gives us headway for multi-year growth, right, I mean, especially because…

Hardik Dhebar — Chief Financial Officer

Absolutely, I’ll be three times my size what I am today and therefore you know for the next foreseeable four, five, six years, I don’t see a constraint in terms of capacity or anything. Also there is an option and opportunity for me to replace one of my other smaller vessels with a larger one. So that is not something that’s a big worry or a concern. But yes, you’re absolutely right with the new vessel I think for the next four, five six years, you don’t need to worry about capacity or anything and I think, yes, you’re right, if the business or the country continues to grow the way it is growing and if we become a 10 trillion economy by 2030, I think Delta will be a…

Unidentified Participant — — Analyst

Hello? Hello.

Operator

Ladies and gentlemen, we seem to have lost the line for Mr. Hardik Dhebar, please stay on the line while we reconnect with him.

Unidentified Participant — — Analyst

Sure, thank you.

Operator

[Technical Issues] Ladies and gentlemen, we have reconnected with Mr. Hardik Dhebar, Mr. Dhebar, over to you sir.

Hardik Dhebar — Chief Financial Officer

Yeah, sorry guys, I had a technical snag, by EPABX system in the office count off, so we got disconnected. But I think, I had answered the question of Bhavesh as well and I think that was the last question. So if there is anything more that I need to add or complete, do let me know otherwise I think I can hand over to Alpesh for the closing remarks, please.

Operator

Thank you. Mr. Alpesh, go ahead with the closing comments.

Alpesh Thacker — Moderator

Yeah, so thanks a lot, Hardik and all the participants for — to reporting on this call with us. On behalf of Antique Stock Broking, that concludes this conference. Thank you once again everyone for joining this call. You may now disconnect.

Hardik Dhebar — Chief Financial Officer

Thank you, everybody. Thank you sorry for that little bit of a glitch. Thank you.

Operator

[Operator Closing Remarks]