D-Street unimpressed by Delta Corp’s Q2FY23 numbers surpassing pre-COVID levels

Shares of casino and hotel operator Delta Corp rose marginally in early trade on October 12 but then slipped 2 percent, even after the company recorded highest consolidated revenue of Rs 651 crore and net profit of Rs 125 crore for the half year of FY 2022-23.

At 11 am, the stock was trading at Rs 213.20 apiece on the BSE, down 2 percent, while the benchmark Sensex was down 0.02 percent at 57,132. On Tuesday, the stock had ended 4.8 percent lower. For the year, it is down 15 percent.

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In a stock exchange filing, the company said “We have reported highest ever revenue for the quarter. We have surpassed the pre-COVID set of numbers and have registered strong growth.”

For Q2FY23, the company recorded 19.5 percent sequential growth in consolidated profit at Rs 68.25 crore and revenue during the same period increased by 9 percent to Rs 273 crore.

Jaydev Mody, Chairman, Delta Corp said, “The growth can be attributed to the surge in domestic travel. This has enabled the growth and we believe that this trend will continue for a while. In the meantime, other development that is in the pipeline which is the launch of our new vessel is in public domain. This will further the growth momentum and help us achieve desired results”

Also Read: Inside Goa’s casinos, a mix of anticipation and signs of post-pandemic revival

Investors believe a 28 percent GST consideration on casino business is a key overhang on the stock, however, Delta Corp’s management have clarified in Q1FY23 earnings call that “The casino business operating out of Goa right from July 1, 2017, has been paying a 28 percent GST. So as far as we are concerned, there will not be any impact from GST perspective.”