Delta Corp Q3 Consolidated Net Profit Falls 59%; Shares Drop Amid GST Dispute

Summary

  • Large Indian company Delta Corp reports a significant 59% year-on-year fall in net profit in Q3, with its operational income also dropping by 18%.
  • Delta Corp’s income decrease caused its shares to fall for four consecutive trading sessions.
  • Delta Corp is currently facing a massive Goods and Services Tax (GST) demand of more than ₹23,200 crore, which it argues lacks legal merit.
  • The company tries to turn financial woes around by branching out in various sectors and partnering with prominent companies, despite huge GST demands.

Falling Profits and Share Value

In a startling turn of events, well-respected gaming and hospitality giant, Delta Corp, has announced a hefty 59% year-on-year decrease in consolidated net profit for the third quarter, amounting to ₹34.48 crore. The firm’s income from business operations has likewise dwindled by 18%, coming in at ₹181.54 crore. In reaction to this news, Delta Corp’s shares began to tumble in the stock market, marking the fourth consecutive session of losses. The shares plummeted over five percent to a low of ₹143.1, later fluctuating between ₹146.75 to ₹148.45.

Contentions with Goods and Services Tax (GST)

At present, Delta Corp is in the throes of a significant GST demand exceeding ₹23,200 crore, a situation it has decided not to provision on the back of legal counsel. Delta Corp disputes the demand, stating it lacks legal foundation. The GST rate amendment, converting a tax on Gross Gaming Revenue to a flat rate of 28% on coins sold, has notably affected the company’s financial performance. To mitigate customer objections to the new GST rate, Delta Corp launched promotional offers, leading to a diminished EBITDA margin now at 24.1%.

Strategic Investments and Diversification

In spite of the fiscal challenges and ongoing GST controversy, Delta Corp has employed strategic measures to lend diversity to its business portfolio. The firm has made investments in a joint venture with the real estate heavyweight, Peninsula Land Ltd, and maintains a stake in Advani Hotels & Resorts.

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In the forex trading and assets markets, Delta Corp’s financial instability could potentially influence trading decisions involving the company’s shares. The market will likely monitor Delta Corp’s progress to evaluate the risk to future trading.

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