Delta Corp share price tanks over 27% in one day: Should investors buy, sell or hold?
GST Council levied a 28% uniform GST on online gaming, casinos and horse racing. The stock opened at a 10% lower circuit of ₹222.15 apiece on the BSE, but then continued its downfall to hit an intraday low of ₹178.20 apiece. Delta Corp shares are tad above its 52-week low of ₹172.30 apiece hit on July 12, 2022.
The Goods and Services Tax (GST) Council on July 11 levied a 28% uniform GST on online gaming, horse racing, and casinos on the full value of the bets, which is expected to be negative for online gaming and casino industry. Read here: GST shock: Online gaming, casinos to be taxed at 28% However, analysts believe that the plunge in Delta Corp shares can be a good opportunity to buy the stock given its pricing power and long term business prospects. “The GST Council decision had a knee jerk reaction on Delta Corp shares.
However, the company is the only listed player in the casino industry and has the pricing power to pass on the cost to customers. Its business is expected to grow despite high GST rates," said Avinash Gorakshakar, Director Research, Profitmart Securities. Gorakshakar expects the company may pass on the cost to consumers in the next quarter and believes it will not have much impact on the operational business viability of the company.
“The business will continue to grow in the long term. The stock price plunge can be utilised to buy and accumulate the shares at these low levels for the long term," Gorakshakar explained. Also Read: GST on Online Gaming: Delta Corp share price tanks 20%, Nazara Tech share price drops 5% on 28% tax levy On the technical front, Delta Corp shares reached the crucial support level of ₹175, which is considered critical due to its historical significance in March. “It is
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