Delta Corp, a prominent player in the online gaming, casino, and horse racing industry, witnessed a significant drop in its share price, falling nearly 28% in a single day. This unprecedented decline came in response to the GST Council's decision to impose a 28% uniform GST on online gaming, casinos, and horse racing. In this article, we will explore the implications of this move, the potential impact on Delta Corp's business, and expert opinions on the stock's future prospects.
Delta Corp's Share Price Plummet
- Delta Corp experienced a sharp decline in its share price following the GST Council's announcement.
- The stock opened at a 10% lower circuit and continued its downward trend, reaching an intraday low.
- This plunge brought the share price close to its 52-week low, signaling a significant market response to the news.
- The GST Council's decision to levy a 28% GST on online gaming, horse racing, and casinos is expected to have negative consequences for the industry.
- This move introduces a uniform tax rate on the full value of bets, potentially impacting the profitability of online gaming and casino businesses.
Analyst Perspectives on Delta Corp
- Despite the immediate market reaction, analysts view the decline in Delta Corp's share price as a potential buying opportunity.
- The company is the only listed player in the casino industry and possesses pricing power to pass on the increased costs to customers.
- Analysts believe that Delta Corp's business is expected to continue growing despite the challenges posed by the high GST rates.
Technical Analysis and Potential Scenarios
- On the technical front, Delta Corp shares reached a crucial support level, indicating its historical significance.
- The stock's ability to hold above this support level may result in a consolidation phase within a defined trading range.
- Key resistance levels, such as the 200-day moving average (DMA), represent critical barriers that would require substantial strength to overcome.
Outlook and Recommendations
Market experts suggest that the major support level for Delta Corp lies around the 173 zone, with a recovery above the significant 200-period MA indicating improved stability.
The stock's ability to trade within the range of 200 to 240 without significant directional bias is a possibility, assuming it maintains support levels.
To establish stability and regain investor confidence, Delta Corp needs to recover above the crucial 200-period MA level of 214.
Conclusion
The sharp decline in Delta Corp's share price, triggered by the GST Council's decision to impose a uniform 28% GST, has created a challenging market environment for the company. However, industry experts believe that Delta Corp's long-term business prospects remain promising, given its pricing power and position as the sole listed player in the casino industry. As the stock faces a consolidation phase and seeks to regain stability, investors may consider evaluating the potential buying opportunity presented by this price drop.