Delta Corp , a major player in the Indian gaming industry, has seen its shares tumble by 9% over the past three trading sessions following the announcement of a ban on real money gaming (RMG). The stock's decline reflects growing concerns about the company's future prospects in light of regulatory changes in the online gaming sector.

Stock Performance

The company's stock is currently trading below its key technical indicators, with prices falling under both the 50-day moving average of Rs 88.00 and the 200-day moving average of Rs 97.00. This downward trend is part of a larger pattern, as Delta Corp's shares have depreciated by 34% over the past year.

Regulatory Headwinds

The primary catalyst for the recent stock decline is the introduction of the Promotion and Regulation of Online Gaming Bill, 2025. This legislation aims to ban online money gaming, which directly impacts popular games like rummy and poker. The implications for Delta Corp are significant, given that 94% of the company's revenue is derived from gaming operations.

Financial Impact

Delta Corp's reliance on gaming operations is evident in its recent quarterly results. Out of total net sales of Rs 184.00 crore, the company earned Rs 173.00 crore from gaming operations alone. This heavy dependence on the gaming sector makes Delta Corp particularly vulnerable to regulatory changes affecting the industry.

Technical Analysis

Market analysts are closely watching the stock's movements. Technical analysts suggest that Delta Corp shares may consolidate within the range of Rs 82.80 to Rs 96.20. They have identified a strong support level at Rs 81.00, which could be a critical price point for investors to monitor.

Industry Outlook

The ban on real money gaming and the potential introduction of a sin tax are viewed as significant setbacks for the online gaming industry in India. With the country's online gaming market valued at USD 4.00 billion, these regulatory changes are expected to have far-reaching consequences for companies operating in this space.

Conclusion

As Delta Corp navigates these challenging regulatory waters, investors and industry observers will be keenly watching how the company adapts its business model to the changing landscape. The coming months will be crucial in determining the long-term impact of these regulatory changes on Delta Corp and the broader online gaming industry in India.

Delta Corp , India's leading casino and hospitality company, has released its financial results for the first quarter, revealing a slight decline in revenue and a significant drop in profit compared to the same period last year. The company continues to face challenges, including ongoing GST litigation and increased legal expenses.

Financial Performance

For the quarter ended June 30, Delta Corp reported:

• Consolidated revenue from operations of ₹184.17 crore, up from ₹178.01 crore in the same quarter last year
• Consolidated profit after tax of ₹29.46 crore, compared to ₹35.20 crore in the same quarter last year
• Standalone revenue from operations of ₹130.90 crore, a decrease from ₹142.63 crore in the previous year's quarter
• Standalone profit after tax of ₹25.84 crore, down from ₹40.48 crore in the previous year's quarter

Segment-wise Performance

The gaming operations segment showed a slight growth, while the hospitality segment experienced a minor decline in revenue.

Increased Legal Expenses

Delta Corp noted an increase in "Other Expenditure" for the quarter, primarily attributed to higher litigation costs due to continued hearings before the Supreme Court regarding ongoing GST litigation.

GST Litigation Update

The company, along with its subsidiaries and an erstwhile associate company, continues to face significant GST litigation. Show cause notices for alleged short payment of Goods and Service Tax (GST) totaling ₹23,207.30 crore for the period from July 2017 to November 2022 remain a concern. Delta Corp maintains that the tax demands are arbitrary and has challenged them through legal proceedings.

Corporate Actions

The Board of Directors has taken several key decisions:

1. Approved amendments to the Delta Employees Stock Appreciation Rights Plan 2019 (ESARP-2019), subject to shareholder approval.
2. Set August 8 as the record date for the final dividend of ₹1.25 per share, as recommended earlier.
3. Scheduled the 34th Annual General Meeting for September 11, to be held via video conferencing.

Expansion Plans

In a separate announcement, Delta Corp's wholly-owned subsidiary, Delta Penland Limited, has approved the acquisition of a 107-room hotel in Alibagh, Maharashtra. The property, spread over approximately 2,239 square meters, will undergo regularization, upgradation, and renovation to meet market needs and company standards before becoming operational.

Despite the challenges faced, Delta Corp continues to focus on its core operations and expansion strategies in the gaming and hospitality sectors. The company remains confident in its legal position regarding the GST notices and is actively defending its stance in court.