Delta Corp’s shares fell over 3% to ₹106 on January 14 after the company announced disappointing results for the third quarter of FY25. The online gaming and casino operator reported a muted performance, leaving investors unimpressed with its financial metrics.
The company posted a modest 3.5% year-on-year (YoY) growth in net profit, amounting to ₹35 crore in Q3FY25. However, its revenue declined by 7.5% YoY to ₹194 crore. Operational performance took a sharper hit, as EBITDA dropped by 42.4% to ₹32.2 crore, and EBITDA margins contracted significantly by 1,000 basis points YoY to 16.6%.
Delta Corp’s stock performance has been lackluster over the past year, with the share price sliding more than 27%, a stark contrast to the benchmark Nifty 50’s 5% gain during the same period. This underperformance has added to investor concerns about the company’s ability to navigate current challenges.
The company operates across multiple business segments, including casinos, real estate, gaming, and hospitality. Under its Deltin brand, it manages three casinos in Goa: Deltin Royale, Deltin JAQK, and Deltin Caravela, which have become well-known names in India’s gaming and entertainment industry.
Delta Corp, along with other companies in the online gaming sector, has also been grappling with regulatory and tax-related challenges. Between mid-2023 and the first half of 2024, it received demand notices for massive GST liabilities running into thousands of crores. In response, the Supreme Court has granted a stay on GST proceedings against several gaming companies, including Delta Corp, at the government’s request. This decision provides temporary relief, preventing authorities from enforcing tax demands until the court issues its final ruling.
The tax dispute centers around the rate of GST applicable to online gaming. Companies in the sector have opposed the application of a 28% GST rate for periods before October 1, 2023, arguing for the previously applicable 18% rate. However, the GST Council clarified in August 2023 that all online games involving betting—whether based on skill or chance—would attract a 28% GST rate on the total value of bets placed, rather than the gross gaming revenue.
Delta Corp’s weak financial performance, coupled with ongoing regulatory uncertainties, has weighed heavily on its stock. Investors are now looking for signs of recovery as the company navigates these challenges and seeks to improve its operational and financial metrics in the coming quarters.
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Source: Moneycontrol
