John DeCree Forecasts Delta Corp’s Online Gaming Revenue Will Reach US$30.5M in 2022

According to Union Gaming analyst John DeCree, the value of Indian gaming leader Delta Corp’s online gaming business could exceed the current market cap of the entire company within the next two years.

In a note following the publication of Delta Corp’s Q2 2020 financial results, DeCree forecast revenue in the company’s online segment to reach US$30.5 million in sales in FY22, which based on valuations of between 10x and 15x of sales for US online gaming businesses would imply a valuation of US$305 million to US$458 million.

“This would suggest the online gaming business is worth more than the current market cap of the entire company today,” DeCree said.

His comments come as Delta Corp revealed it would have recorded positive EBITDA in Q2 2020 but for an US$3.1 million casino license fee, despite recording zero casino revenue for the quarter due to the COVID-19 shutdown.

Group-wide revenue declined 68.5% for the quarter to US$8.1 million, of which Rs 57.07 crore came from online skill gaming operations, representing a 60% year-on-year increase for the segment.

Delta Corp’s online gaming assets include online poker site Adda52.com, online rummy site Adda52rummy.com and online fantasy sports site LeagueAdda.com.

“Similar to trends seen in the US and around the globe, Indian consumers have flocked to digital and online entertainment channels during the lockdown,” DeCree said.

“The online gaming segment is already a high-growth business for Delta Corp but the lockdown has accelerated consumer acceptance and customer acquisition. This segment has long been an undervalued and underappreciated component of the company’s business and growth profile that can no longer be ignored,” DeCree added.