Delta Corp shares tumble 20% as online gaming to attract 28% GST

Shares of Delta Corp Ltd crashed 20% today after the GST Council decided to levy a 28 per cent GST on online gaming, horse racing, and casinos. The decision to raise GST by 10% online gaming is negative for the investors of the online gaming firm. Currently, online gaming platforms pay 18 percent GST on the platform fees.

Shares of Delta Corp hit the lower circuit of 20% at Rs 197.45 in early deals today against the previous close of Rs 246.80 on BSE. It opened lower at Rs 222.15 on BSE. Market cap of the gaming and entertainment firm declined to Rs 5287 crore in the current session. Total 1.89 lakh shares of the firm changed hands amounting to a turnover of Rs 3.98 crore. However, the stock is still up 10 per cent in one year but lost 8.31 per cent since the beginning of this year.

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In terms of technicals, the relative strength index (RSI) of Delta Corp stands at 53.1, signaling it's trading neither in oversold nor in the overbought zone. Delta Corp stock has a one-year beta of 1, indicating average volatility during the period.

“We have offered exemption on GST for satellite launch services provided by private organisations. Online gaming, horse racing and casinos will be taxed at 28% (all three activities) and they will be taxed on full face value,” said Union Finance Minister Nirmala Sitharaman.

Delta Corp reported a 6% rise in net profit to Rs 51 crore for the quarter ended March 2023 against Rs 48 crore in the corresponding period last year.  On a sequential basis, net profit slipped 40% against Rs 85 crore clocked in the December 2023 quarter.

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Revenue from operations rose 4% to Rs 227 crore in the March 2023 quarter against Rs 218 crore in the corresponding quarter of last year. Revenues fell 17% quarter-on-quarter, compared with Rs 273 crore in the third quarter.

The stock hit a 52-week high of Rs 259.95 on June 28, 2023 and a 52-week low of Rs 172.30 on July 12, 2022.

Delta Corp is engaged in the operation of casino. 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.

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