Delta Corp Shares Plunge 15% to 52-Week Low After Government Tax Notice

Delta Corp Shares Plunge 15% to 52-Week Low After Government Tax Notice / Mint

VoM News Desk | September 25, 2023 | 02:46 PM IST | Breaking News | Follow on Google News

Delta Corp Shares Plunge 15% to 52-Week Low After Government Tax Notice

Delta Corp, a prominent player in the gaming and hospitality industry, witnessed a sharp decline in its share price, plunging 15% to reach a 52-week low. This drop followed the company’s disclosure that it had received a government notification demanding a hefty tax payment of ₹16,822 crore for the period spanning July 2017 to March 2022.

The trading day for Delta Corp began with the stock opening at an intraday high of ₹157.75 per share on the BSE. However, as news of the government’s tax demand spread, Delta Corp’s stock price hit a 52-week low of ₹149 per share.

Delta Corp Shares Plunge 15% to 52-Week Low After Government Tax Notice

Delta Corp disclosed that a notice for ₹5,682 crore has been filed against three of its subsidiaries: Casino Deltin Denzong, Highstreet Cruises, and Delta Pleasure Cruises, as stated in an exchange filing. Additionally, the company received another notification demanding an alleged tax liability of ₹11,140 crore, inclusive of interest and penalties, for the period from July 2017 to March 2022. If Delta Corp fails to comply, a show-cause notice may be issued against the company.

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The tax amount sought in the DG Notice is calculated based on various factors, including the total gross bet value of all games played at the casinos during the relevant period, as mentioned in the exchange filing. Delta Corp and its subsidiaries have received legal advice indicating that the notices and tax demands are arbitrary and contrary to law. Consequently, they plan to pursue all available legal remedies to challenge these tax demands and related proceedings.

On the technical front, Delta Corp’s stock price has witnessed a significant decline, falling 17% in the past year, underperforming its sector by 21.2%, according to data from Trendlyne. Rajesh Bhosale, Equity Technical and Derivative Analyst at Angel One, noted that Delta Corp has consistently delivered poor performance. The stock experienced a notable gap down in its opening price, accompanied by sustained selling pressure, leading to a 15% decline as of the time of writing.

Delta Corp’s breach of its lowest swing point from the previous year at ₹160 signals a bearish sentiment. Bhosale advised caution and recommended avoiding buying into a declining market, as the stock may continue to weaken in the short term. He pointed out that the next support level for the stock is at ₹123, while resistance is at ₹155.

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[Disclaimer: The views and recommendations mentioned above are those of individual analysts or brokerage firms and do not represent the views of Mint. Investors are advised to consult certified experts before making investment decisions.]

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