Should you buy the slam dunk in Nazara & Delta? Dipan Mehta answers

economictimes.indiatimes.com:

Dipan Mehta, Director, Elixir Equities, says “it will be sentimentally negative for Nazara and to an extent, the kind of opportunities which they could have pursued has certainly narrowed down for them. But they won’t be impacted too much by the 28% tax on gaming. Delta however, may be hit really hard.

I would avoid both these companies.”After the new GST rejig which was announced last evening, is it literally game over for the likes of Nazara and Delta? A 28% tax has been slapped with no distinction between games of skill and chance.I do not think Nazara is impacted as much. The management has come and said that their revenues are about 5% from gaming and EBITDA contribution is 10%. From that point of view, Nazara has been conservative and they have avoided getting full on into this real money or any other form of gaming products per se and the other strength of Nazara is that they are not focussed or not concentrated in any single product or any single segment in the gaming industry and even geographically also they are quite well dispersed.

So, from that point of view, I do not think it is going to get impacted. Of course, it will be sentimentally negative for Nazara and to an extent, the kind of opportunities which they could have pursued has certainly narrowed down for them. But from an absolute result or performance perspective, I do not think the impact will be much.