Shares of Delta Corp were dropping on Wednesday after the casino and gaming company reported a sharp drop in its quarterly net profit.

What Happened: Delta Corp reported a consolidated net profit of ₹34.48 crore for the quarter ended December, marking a 59.34% decline compared to ₹84.82 crore earned last year. The revenue from operations for the quarter stood at ₹234.41 crore, reflecting a 15.58% decrease from ₹277.68 crore.

The company’s primary business divisions, casino, and online gaming witnessed a significant drop in revenue, while the third division focused on hospitality saw an improvement in revenue during the quarter.

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Closer Look At The Numbers: In the third quarter report, the company recorded an EBITDA of ₹55.5 crore, a 45% decline compared to the same period last year when it stood at ₹102 crore. EBITDA margins experienced a substantial decrease, plummeting from 37.4% in the October-December period of the previous fiscal year to 23.9%.

Breaking down the segments, income from gaming operations saw an 18% downturn, totaling ₹181 crore in the third quarter, as opposed to ₹222 crore in the corresponding period the previous year. Online skill gaming operations revenue also saw a 9% year-on-year decline, amounting to ₹39.13 crore. However, revenue from the hospitality business showed a marginal uptick, reaching ₹13.74 crore.

Delta Corp’s net profit also witnessed a 50% sequential reduction from ₹69.44 crore in the preceding September quarter.

During the third quarter, the company’s total expenses surged 4% to ₹195 crore, compared with ₹189 crore in the corresponding quarter of the previous year.

GST Troubles: Delta Corp and its two subsidiary entities previously received show cause notices from the Directorate General of GST Intelligence in Hyderabad alleging a GST payment shortfall of ₹16,822.98 crore. Another subsidiary was issued a notice by the Director General of GST Intelligence in Kolkata, demanding a payment of ₹6,384.32 crore. Delta Corp has said it plans to challenge these tax demands.

Price Action: Delta Corp’s share price was down 2.49% at ₹146.90 near the start of trade on Wednesday.

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