Despite exceptional gains, Delta Corp faces mounting challenges as it navigates a tough regulatory landscape.
Delta Corp Limited, India’s only listed casino gaming company, released its financial results for the fiscal year ending March 31, 2025. The numbers reflect a company battling headwinds, particularly the impact of the 28% GST regime on its core gaming and casino businesses. However, Delta Corp is making bold moves to navigate these challenges, focusing on strategic growth and value creation for shareholders.
A Roller Coaster Financial Year
Delta Corp’s FY25 was a year of significant transition. While the company posted exceptional gains, the core business struggled under regulatory pressures and operational challenges. The major highlight of the year was the exceptional gain from the sale of a 51% stake in its online gaming subsidiary, Deltatech Gaming. This gain provided some relief to Delta Corp’s financial performance, but the core gaming business remained under pressure.
Strong Q4 Performance, But Not Without Caveats
In the final quarter of FY25, Delta Corp reported a significant year-on-year surge in net profit. The net profit for Q4 rose 127.40% to ₹164.56 Crores compared to ₹72.40 Crores in Q4 FY24. However, this growth was primarily due to the ₹57.14 Crores exceptional gain from the Adda52 divestment.
Despite the surge in net profit, the company faced operational challenges. Revenue from operations in Q4 dipped slightly by 1.20% YoY to ₹182.65 Crores. The EBITDA also contracted by 12%, falling to ₹42.50 Crores, indicating that Delta Corp’s core operational profitability had weakened.
In terms of sequential growth, Delta Corp’s Q4 performance was mixed. Net sales decreased from ₹150.17 Crores in Q3 FY25 to ₹136.06 Crores in Q4, highlighting the ongoing struggles in the core gaming business. However, the company posted a profit before tax (PBT) of ₹97.66 Crores, up significantly from ₹44.3 Crores in Q3 FY25, aided by the exceptional gain.
Full-Year FY25 Results: A Mixed Bag
Delta Corp’s standalone results for the full fiscal year reflected a contraction compared to FY24. The total income for FY25 fell to ₹619.83 Crores, down from ₹674.75 Crores in FY24. Profit before tax (PBT) also decreased from ₹330.37 Crores in FY24 to ₹263.46 Crores in FY25. Net profit was ₹185.31 Crores, down from ₹253.44 Crores in FY24.
The biggest blow came from the mark-to-market (MTM) investment losses of ₹77.33 Crores, which significantly impacted the overall comprehensive income. As a result, Delta Corp’s total comprehensive income for FY25 stood at ₹107.98 Crores, a steep decline from ₹333.65 Crores in FY24.
Consolidated Results: Pressures in Core Gaming, Growth in Hospitality
Delta Corp’s consolidated results mirrored the standalone performance. Total income fell to ₹786.71 Crores from ₹902.19 Crores in FY24. The casino gaming revenue contracted to ₹678.60 Crores, while hospitality revenue saw a growth to ₹53.16 Crores. Despite these pressures, Delta Corp managed to post a slight increase in net profit, which stood at ₹248.99 Crores, up marginally from ₹244.23 Crores in FY24. However, this increase was mainly due to the exceptional gain from the Deltatech transaction.
The company’s net profit attributable to owners was boosted by a substantial exceptional gain of approximately ₹213.22 Crores. However, without this gain, the core business would have faced even more pressure.
A Struggling Online Gaming Segment
One of the key events that shaped Delta Corp’s FY25 performance was the sale of a 51% stake in Deltatech Gaming to Head Digital Works (HDW). This transaction generated a gain of ₹57.14 Crores. However, the sale marked Delta’s exit from a significant portion of its online gaming business. While the move was strategically sound, it reflected the challenges faced by Delta in the volatile online gaming market, especially in the face of the 28% GST regime.
The merger with HDW, expected to be completed by June 2026, will leave Delta Corp with a minority stake in the combined entity. This will reduce Delta’s direct exposure to the online gaming sector while allowing it to retain some upside potential.
Strategic Shifts and Looking Ahead
In response to these challenges, Delta Corp has made significant strategic moves to reshape its business. The company is focusing on boosting its casino capacity and improving its hospitality segment. In February 2025, Delta announced plans to launch a new floating casino in Goa, replacing the existing Deltin Royale. This move is expected to enhance capacity and attract high-end clientele.
Moreover, the company’s plans to demerge its hospitality and real estate businesses into a separate entity, Delta Penland Private Limited (DPPL), are also a step towards insulating valuable assets from the risks associated with the gaming division’s GST litigation. The demerger is expected to unlock value for shareholders by providing better access to financing for DPPL’s expansion plans.
The GST Battle: A Major Roadblock
Delta Corp’s ongoing legal battle with the government over GST continues to be a major concern. The company faces a retrospective GST show-cause notice demanding a staggering ₹23,207.30 Crores for the period between July 2017 and November 2022. While the matter is currently stayed by various courts, the uncertainty surrounding the GST issue has negatively impacted investor sentiment.
Conclusion: A Challenging Path Forward
Delta Corp’s FY25 results were a mixed bag, with exceptional gains masking the underlying pressures in its core gaming and casino businesses. While the company is taking bold strategic steps to de-risk its operations and unlock shareholder value, much depends on the resolution of the GST issue and the successful execution of its revamped casino strategy. The coming months will be crucial in determining whether these initiatives will help Delta Corp regain its momentum and rebuild investor confidence.
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FAQs:
- What is Delta Corp’s major challenge in FY25?
Delta Corp’s main challenge in FY25 was the regulatory pressure from the 28% GST regime affecting its gaming and casino businesses. - How did Delta Corp perform in Q4 FY25?
Delta Corp reported a dramatic year-on-year surge in net profit, but the core operational profitability weakened due to a 12% decline in EBITDA. - What strategic moves is Delta Corp making?
Delta Corp is focusing on increasing its casino capacity, improving the hospitality segment, and demerging its hospitality and real estate businesses. - What was the outcome of Delta Corp online gaming divestment?
Delta Corp sold a 51% stake in its online gaming business, Deltatech Gaming, to Head Digital Works, marking a shift away from the online gaming sector.
