Delta Corp shares slump 7% after GST on casino operations hiked to 40%

Delta Corp shares fell after GST on admission to casinos, and any place having casinos or race clubs was hiked to 40 per cent

Shares of Delta Corp came under pressure on Thursday after the Goods and Services Tax Council raised the indirect tax on casino, race club and other gambling admissions to a 'special rate' of 40 per cent.

 

The casino operator's stock fell as much as 7.55 per cent during the day to ₹88.03 per share, the biggest intraday fall since January 13 this year. The stock pared gains to trade 5.5 per cent lower at ₹89.9 apiece, compared to a 0.66 per cent advance in Nifty 50 as of 10:09 AM. 

 

Shares of the company snapped a two-day winning streak and currently trade at 5.4 times the average 30-day trading volume, according to Bloomberg. The counter has risen 36 per cent this year, compared to a 7.5 per cent advance in the benchmark Nifty 50. Delta Corp has a total market capitalisation of ₹2,375.40 crore.  

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Delta Corp faces heat from GST hikes

The GST Council, chaired by Union Finance Minister Nirmala Sitharaman, reached a consensus on Wednesday to adopt a simplified two-tier rate structure. The new rates will take effect from September 22, the first day of Navratri. A special rate of 40 per cent will apply to all luxury and tobacco-related products. 

 

Admission to casinos, race clubs, any place having casinos or race clubs, or sporting events like the Indian Premier League (IPL) will attract a GST of 40 per cent, from 28 per cent earlier. Yachts and other vessels for pleasure or sports will also see a tax of 40 per cent, along with specified actionable claims such as betting, casinos, gambling, horse racing, lottery and online money gaming. 

 

Delta Corp is India's largest listed casino and gaming company, operating across diverse sectors, including casinos, online gaming, hospitality, and real estate. The company manages casinos in Goa, Sikkim, and Nepal, offering a mix of offshore casinos, floating hotels, and onshore gaming facilities. 

 

Through its subsidiary, Deltatech Gaming Limited, Delta Corp also runs online poker platforms, enhancing its digital presence in the gaming industry. In the hospitality sector, the company owns and operates hotels in Goa, Daman, and Sikkim, catering to both tourists and gaming enthusiasts. Additionally, Delta Corp has expanded into real estate through joint ventures and strategic acquisitions. 

 

Delta Corp Q1 results 

 

The company reported a 35.9 per cent year-on-year (Y-o-Y) jump in consolidated net profit to ₹29.46 crore for the June quarter, as revenue from operations grew 3.5 per cent to ₹184.17 crore.

 

Profit before tax declined 21.4 per cent to ₹37.95 crore compared with ₹48.26 crore a year earlier. Segment-wise, revenue from the casino gaming division rose 3.8 per cent to ₹172.71 crore, while hospitality revenue slipped 2.8 per cent to ₹12 crore.