News

Published: January 10, 2024
Updated: January 10, 2024

Delta Corp Faces 59.34% Q3 Profit Plunge Amidst GST Controversy

Delta Corp Ltd, the lone listed company in India's casino gaming industry, experiences a significant 59.34% YoY decline in consolidated net profit for Q3, raising concerns and driving market focus.

Financial Performance:

The consolidated net profit for December quarter drops to Rs 34.48 crore from Rs 84.82 crore in the same period last year. Net sales decrease to Rs 231.74 crore from Rs 273.37 crore, with declines noted in revenue from gaming operations and online skill gaming operations.

Revenue Breakdown:

While gaming revenue sees a fall from Rs 221.95 crore to Rs 181.54 crore, online skill gaming operations decline from Rs 43.06 crore to Rs 39.13 crore. In contrast, hospitality revenue rises to Rs 13.74 crore from Rs 12.67 crore YoY.

GST Controversy:

Delta Corp, along with its subsidiaries, faces show cause notices for alleged short payment of Goods and Service Tax (GST) totaling Rs 16,822.98 crores and Rs 6,384.32 crores. The demands, based on gross bet or face value, trigger legal action with writ petitions filed and stay orders obtained from High Courts.

Industry-Wide Challenge:

The demands on gross bet value rather than gross gaming revenue stir industry-wide concerns. Delta Corp, citing industry representations, asserts the arbitrary nature of the tax demands and vows to pursue legal remedies against them.

Goodwill and Legal Defence:

The holding company carries goodwill of Rs 355.33 crore, recognized in earlier years. Despite the profit plunge and GST challenges, Delta Corp's management believes no provision for impairment is currently required. Legal assessments and defense strategies remain integral to the company's stance.

Delta Corp grapples with financial setbacks and legal battles, emphasizing its commitment to contest the alleged tax demands. As the company navigates through this challenging period, the market will closely watch developments, legal outcomes, and the impact on its financial standing.