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The ongoing Coronavirus pandemic has dealt a crushing blow to the country’s live gaming and hospitality sectors. India’s only BSE-listed gaming firm, Delta Corp on Thursday reported a sizeable, near 48.8% drop in quarterly net profit for the last financial quarter (Jan-Mar 31) of 2019-20. The company reported a quarterly net profit of ₹29.04 Crores vs. ₹55.07 Crores reported in Q3 ending December 31, 2019.
In its latest filing, Delta Corp disclosed a marginal 2.7% decline in income year-on-year – from ₹829.10 Crores in 2018-19 to ₹806.75 Crores in 2019-20. The company’s casinos in Sikkim and Goa are closed since mid-March, and the lockdown has impaired the company`s hospitality businesses.
Despite the alarming numbers, the company’s results aren’t as bleak. Increasing profits from its online brands Adda52 and Adda52 Rummy has cushioned the decline in revenue from live operations. In fact, the company has reported a robust jump in annual online gaming revenue, up ₹162.14 Crores during 2019-20 from ₹148.16 Crores in 2018-19.
The company’s decision to buy back shares has further improved market perception at such trying times.
Delta Corp has maintained that the COVID-19 pandemic has not significantly impacted the group’s revenue during the financial year ending March 31. Pointing out that Goa, Sikkim, and Daman are now considered COVID-free, green zones, the group has predicted that operations could resume in these states within a few months.
The company filing read – “The management has also evaluated the possible impact of this pandemic on the business operations and the financial position of the Group and based on its initial assessment of the current indicators of the future economic conditions, believes that there is no significant impact on the financial results of the Group, as at and for the year ended March 31 2020.”
Alongside a drop in its net quarterly profit and year-on-year income, Delta Corp’s net sales in March also took a significant beating and dropped 11.43% to ₹180.93 Crore from last year’s figures of ₹204.29 Crores for the same month.
The business has been briskly profitable for the online verticals where the company’s live casino sector has suffered. Both Adda52 and Adda52 Rummy have compensated the slowdown in other businesses by reporting a sharp increase in revenue. The online sites raked in ₹45.30 Crores in Q4, up over 10% from the ₹40.29 Crores they brought in for Q3 last year.
The company’s stock movement has stabilized as well, and ever since the latest financial results have come out, the stock prices have gone up.
While the investor panic had sent Delta Corp’s share prices spiraling down from ₹160 to ₹55 per share in mid-March, the company’s decision to buy back shares helped restore investor confidence.
On April 1, after ace investor Radhakishan Damani bought 15.5 Lakh shares of Delta Corp, the stock rallied 5% to close at ₹68.75 on the BSE.
As of May 18, the Delta Corp scrip was trading at ₹68.10 per share on BSE. The latest financial results seem to have bolstered investor sentiments as the stock closed at 74.40 today on the BSE.