Delta Corp stock drops 3% as Q3 net profit tanks 59% to Rs 34 crore

Delta Corp’s Profits in Q3 plunges 59 percent to Rs 34.48 crore.

Shares of Delta Corp dropped 3 percent in early trade on January 10, post registering a 59 percent decline in Q3 net profit to Rs 34 crores. At 9:15 am the Delta Corp stock was trading at Rs 143.24 on NSE.

Casino and gaming services provider Delta Corp on January 9 said its consolidated net profit for the quarter ended December came in at Rs 34.48 crore, declining 59.34 percent. The company had reported net profit at Rs 84.82 crore in the same quarter last year. Its revenue from operations for the quarter stood at Rs 234.41 crore, falling 15.58 percent from Rs 277.68 crore in the corresponding quarter, previous fiscal, the company said in an exchange filing.

Anil Malani, of Delta Corp, shared on CNBC-TV18 that, "the company faced a downturn in the Oct-Nov quarter due to the impact of a higher GST regime. Revenue slumped as customers were required to pay a 28 percent GST upfront on chips."

Despite the challenges, Malani expressed hope for a revival in Q4. He also disclosed that one of Delta Corp's ships is scheduled for dry docking in January.

The company is currently dealing with total claims amounting to approximately Rs 23,000-24,000 Cr in terms of GST show cause notices, with all cases set to be heard next month. Malani anticipates Q4 revenues to be similar to Q3 and mentioned the possibility of pivoting to the realty business, citing a lack of opportunities for casino growth in India.

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Meanwhile, shares of Delta Crop on January 9 closed 0.20 percent lower at Rs 150.70 apiece on BSE. It is to be noted that, the stock fell more than 1 percent in the last hour of trading yesterday to close in the red, also that the stock has fallen over 5 percent in the last five days in the run up to results.

Its two biggest business divisions - casino and online gaming - and saw sharp drop in revenue. Third and the smallest hospitality division saw improvement in revenue during the quarter.

Also Read: Delta Corp Q3 net profit tanks 59% to Rs 34 crore

The company said that during the quarter, Delta Corp and and its two subsidiary companies received show cause notices from the Directorate General of GST Intelligence, Hyderabad, for alleged short payment of Goods and Service Tax (GST) aggregating Rs 16,822.98 crore while another subsidiary was asked to cough up Rs 6,384.32 crore from Director General of GST Intelligence, Kolkata.

The company said it and subsidiary companies have filed writ petitions and have obtained stay order from respective High Courts. "Based on legal assessment [Delta Corp] is of the view that all the above notices and the tax demands are arbitrary in nature and contrary to the provisions of law.

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The Companies will pursue all the legal remedies available to them to challenge such tax demands and the related proceedings," the company said. Delta Corp also believes it has a good ground to defend against the said show cause notices and thus has not made provision for it.

Delta Corp Stock Performance

The Delta Corp stock has lost 38.27 percent of its value over the last six months. The benchmark Nifty 50 index has given a return of 11.31 percent over the same duration.

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