Delta Corp shares crash 27% in two days; tech charts indicate more pain ahead

Shares of Delta Corp Ltd on Thursday extended their fall for the second straight session. After sliding over 23 per cent in the previous session, the stock further slipped 5.18 per cent today to settle at Rs 179.55. At this price, the counter has crashed 27.25 per cent in just two days. The scrip started tumbling after Goods and Services Tax (GST) Council imposed a levy of 28 per cent GST on online gaming, horse racing, and casinos.

Around 19.67 lakh shares changed hands on BSE today, which was way more than the two-week average volume of 4.60 lakh shares. Turnover on the counter stood at Rs 36.39 crore, commanding a market capitalisation (m-cap) of Rs 4,807.83 crore.

On the technical front, the counter's 14-day relative strength index (RSI) came at 24.50. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-earnings (P/E) ratio of 23.42 against a price-to-book (P/B) value of 2.33. The scrip has a one-year beta of 1.10, indicating high volatility.

Analysts largely suggested that the stock may witness more selling pressure in the near-term as a uniform 28 per cent GST could have a lasting impact on the company's financials. Support on the counter could be seen at Rs 170, one of them said.

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Market expert Ravi Singh said, "The stock may witness continuous selling pressure in coming weeks as the 28 per cent uniform GST on online gaming, horse racing, and casinos will have a lasting impact on the company financials. The stock price is likely to remain in downtrend and touch the levels of Rs 160."

Vaibhav Kaushik, Research Analyst, GCL Broking said, "As we know already 30 per cent TDS (tax deducted at source) is applicable on gambling. The step to impose 28 per cent GST directly impacts the users to play such games as after taking high risk, they have to pay more than 50 per cent as taxes to the government. So, at least next two quarter results must be tracked. The stock can range between Rs 150 to Rs 210. Avoid is the recommendation for now."

AR Ramachandran from Tips2trades said, "The stock has a strong support at Rs 173. Currently, investors should avoid buying."

Delta Corp is engaged in the operation of casinos. Its segments include real estate, gaming, hospitality and others. The company operates its gaming and hospitality businesses under the DELTIN brand. The company owns three casinos in Goa, including Deltin Royale, Deltin JAQK and Deltin Caravela.

Meanwhile, Indian equity benchmarks settled higher after hitting their all-time high levels, led by gains in banks, financials, metals, technology and realty stocks.

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