Buy Delta Corp, target price Rs 350: HDFC Securities

HDFC Securities has a buy call on Delta Corp with targets of Rs 332-350 for a period of up to 3 months. The brokerage recommends keeping a stop loss at Rs 284.

Delta Corp, incorporated in the year 1990, is a Mid Cap company (having a market cap of Rs 8,029.26 crore) operating in the Tourism & Hospitality sector.

Investment Rationale
Delta Corp has broken out from a rectangle pattern. After making a recent high on 14th Jan 2022 it started correcting and halted near 250 levels which also coincide with a strong demand zone on the weekly chart.


On 21st March 2022, it had broken out from the rectangle pattern on the daily time frame, which suggests the previous uptrend could resume.

Also, the stock has bounced from the crucial support level. It also took multiple support near the lower band of Bollinger band on the daily chart. RSI (14) on the Daily chart has taken support of 40 levels and is now moving higher. Positive Divergence is observed on the MACD histogram.

Financials
For the quarter ended 31-12-2021, the company reported a Consolidated Total Income of Rs 252.20 crore, up 205.62% from last quarter's income of Rs 82.52 crore and up 95.61% from last year's same quarter Total Income of Rs 128.93 crore. The company has reported a net profit after tax of Rs 71.29 crore in the previous quarter.

Promoter/FII Holdings
Promoters held 33.26 per cent stake in the company as of 31-Dec-2021, while FIIs owned 5.8 per cent, DIIs 10.89 per cent.