Delta Corp zooms over 70% from December low

The stock was up 7% at Rs 165, appreciating 73% from its recent low of Rs 95.40 on December 26, 2016

Delta Corp has moved higher by 7% to Rs 165 on BSE in the afternoon trade on the back of heavy volumes. The stock has appreciated by 73% from its recent low of Rs 95.40 touched on December 26, 2016, as compared to 12% rise in the S&P BSE Sensex.

Post demonetization, between November 8 and December 26, the stock had declined 41% from Rs 162, against 6.5% decline in the benchmark index. It hit a record high of Rs 195 on October 16, during intra-day trade.

In October-December (Q3FY17) quarter, Delta Corp reported 69% decline in its consolidated net profit at Rs 10 crore on sequential basis. The company had profit of Rs 32 crore in September 2016 quarter and Rs 7 crore in December 2015 quarter.

“Investors feared of the demonetization announcement bearing adverse implications on the company’s casino business. Nevertheless, they were surprised to know that Delta’s Q3FY17 volumes were down just 20% while the damage foreseen was far more severe,” according to analyst at Emkay Global Financial Services.

The stock price also corrected from its October’16 highs in reaction to these fears. We recommended investors to BUY the stock as this provides a good entry opportunity, the brokerage firm said in recent report.

The favorable catalysts for the stock price are the Daman launch (85% capacity addition), expected fund raising from sale of land parcels and completion of acquisition of online gaming portal, Adda52.com, added report.

Delta Corp is the largest operator in the organised gaming market in India, and the only listed operator with access to capital markets. Rakesh Jhunjhunwala, the renowned Indian Investor, holds 9.74% stake in the company.

At 02:03 pm; the stock was up 5.5% at Rs 163 as compared to 0.14% rise in S&P BSE Sensex. A combined 9.35 million equity shares changed hands on the counter on the BSE and NSE so far.