Delta Corp stock rises 1% after muted Q2 earnings growth; profit up 1.7%, revenue flat

Shares of Delta Corp rose nearly 1 percent in early trade on October 12 after the gaming company posted marginal rise in profits to Rs 69.4 crore. In the previous session, the stock closed 0.25 percent higher at Rs 142.55 on the NSE. The stock was trading at Rs 145.85 in the early morning trade on NSE.

Delta Corp, the casino gaming company, recorded consolidated net profit growth of 1.74 percent on-year for the fiscal second quarter ended September. The profit growth was impacted by muted top line and operating performance.

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Revenue from operations for the quarter was nearly flat on-year at Rs 270.6 crore. The board of directors appointed Anil Malani as President & CFO, and Manoj Jain as Chief Operating Officer of the company with effect from October 11, as detailed in a filing with the BSE.

In April 2023, Delta said it wanted to focus on attracting retail customers and position itself as “a family destination” as the revenue contribution from big-ticket gambling, which the company called a “high-rolling business”, was “very miniscule”.

Earlier in 2023, India’s nascent $1.5 billion online gaming industry came under tight scrutiny as the Goods and Services Tax (GST) Council imposed a 28 percent tax on funds from customers on each bet but partially walked back the tax later. The new tax came into effect on October 1.

Stock Performance and technical indicators

The Delta Corp stock has lost 25 percent since the firm announced its earnings for the quarter ended June 2023. In terms of technicals, the relative strength index (RSI) of Delta Corp stands at 27.8, signaling it’s trading in the oversold zone. Delta Corp shares are trading higher than 5- and 10-day moving averages but lower than the 20-, 50-, 100-, 150-, and 200-day moving averages.

Also Read: Retrospective tax notices: Online gaming firms should approach govt, GST Council over 28% tax, say experts

The stock slipped 19 percent in the last week of September after the firm received tax notices totaling Rs 16,822 crore from the Directorate General of GST Intelligence. The demand was for the period between July 2017 and March 2022. One notice for Rs 11,140 crore was issued against Delta Corp. The other notice for Rs 5,682 crore was been raised against three of its subsidiaries — Casino Deltin Denzong, Highstreet Cruises, and Delta Pleasure Cruises — the company said in a regulatory filing.

Also Read: Delta Corp: Game over or will the house win as always?

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