Rakesh Jhunjhunwala gets big on gaming; check out his 2 bets in this space

Ace investor Rakesh Jhunjhunwala's stock-picking art is unique as is visible by the mouth-watering returns Jhunjhunwala portfolio stocks have delivered in the past. Jhunjhunwala never fails at cracking the trend that the future may throw at us. Perhaps that's why two companies in which he holds stakes are into gaming space, a sector that is growing rapidly on the back of millennials' lifestyle. Rakesh Jhunjhunwala who stayed away from digital space for long finally saw growth potential in a gaming startup named Nazara Technologies. The big bull of Dalal Street is already invested in Delta Corp, India’s first listed pureplay gaming company. 

Rakesh Jhunjhunwala had acquired a minority stake in Nazara for about Rs 180 crore in December last year. "I am always on the lookout for promising companies which are leaders in high growth verticals. Nazara is a leading company in the mobile games business. Nazara has a consistent track record of delivering profits, cash flows, along with efficient use of capital and high ROE. I see a growth potential in the company," said Rakesh Jhunjhunwala in a statement released by Nazara Technologies.  

Nazara Technologies has just received Sebi's nod to float an initial public offering (IPO). The mobile gaming company is popularly known for its games on World Cricket Championship, Chhota Bheem and Motu Patlu series. It runs gaming subscription services to mass mobile internet users comprising largely of first time gamers across Africa, the Middle East, South East Asia, Latin America and the Indian subcontinent. It has operations in over 60 countries across emerging markets.  

His other gaming bet Delta Corp has already given him multifold returns, and also to those who followed him into Delta. As of March 31, 2018, Rakesh Jhunjhunwala along with his wife Rekha Jhunjhunwala, owned 7.5 per cent stake in the company. 

This casino play reported a staggering 316 per cent year-on-year growth for the March quarter of financial year 2017-18. The Q4 FY18 Profit After Tax (PAT) jumped 316 per cent yoy to Rs 45.6 crore as against Rs 10.9 crore. The company's revenue for Q4FY18 grew by nearly 94 per cent yoy to Rs 218.9 crore as against Rs 113 crore in Q4FY17. EBITDA margin for the said quarter improved 37 bps yoy to 30.8 per cent against 30.5 per cent in Q4FY17.

Delta Corp operates three floating casinos (Deltin Royale, Deltin Jaqk and Deltin Caravela) and one onshore casino (Deltin Casino – part of Deltin Suites) in Goa. Deltin Royale and Deltin Jaqk are Delta’s major casinos with vessel passenger capacity of 200-400. Deltin Caravela and Deltin Casino are relatively small with passenger capacity of 200 or less.

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Delta Corp share price has risen a whopping 300 per cent in the last 5 years.