Here’s what you can do with Delta Corp shares after its biggest single-day fall

Existing investors waiting for profits or losses should exit their positions in shares of Delta Corp, a gaming firm that also runs casinos, according to Vinit Bolinjkar, Head of Research Ventura Securities. His views came after shares of Delta Corp witnessed their biggest ever fall as the GST Council on July 11 decided to levy a 28 per cent GST on online gaming and casinos. The GST would be levied on full face value.

The scrip crashed 23.28 per cent to Rs 189.35 on July 12, while the benchmark BSE Sensex declined 0.34 per cent, or 223.94 points, to 65,393.90.

In an interaction with Business Today TV, Bolinjkar said, “GST has come in as very [adverse] ruling for Delta Corp. As much as 28 per cent will be deducted as GST for the chips that you collect for casino. Taxes are too high and government is earning on your expense. This is a major setback for Delta Corp which is primarily a gaming company. One should stay away from Delta Corp shares. Existing investors should book their losses and profits.”

Aaditya Shah, COO, IndiaPlays an online gaming platform said, “It is important to carefully consider the potential implications of a steep increase to 28 per cent in the gross gaming revenue (GGR) tax rate. While such an increase could introduce certain challenges to the sector's progress, such as impacting companies’ cash flows and restricting investment in innovation and expansion, it is crucial to strike a balance that ensures a healthy and sustainable industry. By finding the right equilibrium, we can foster continued growth, healthy competition, job creation, and long-term prosperity for the gaming sector.”

For the year ended March 31, Delta Corp reported 66.41 per cent year-on-year growth in consolidated gross sales at Rs 1,242.85 crore against Rs 746.87 crore a year ago. On the other hand, net profit of the company increased by 290 per cent YoY to Rs 261.37 crore.

Commenting on the decision taken by the GST Council, Suman Bannerjee, CIO, Hedonova, a US based Hedge Fund, said, “The decision of charging 28 per cent GST will have a negative impact on the overall gaming industry. Online gaming companies and gamers will get affected the most. I feel this is a good step taken by GST council. GST on things like gambling and horseracing should be as high as possible. These are sins of society which people should not indulge in, especially the poor and the middle class. The high costs of indulgence will deter them.”

Also read: TCS Q1 results: profit rises 16.83% to Rs 11,074 crore

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