Delta Corp profit dips in Q1 amid intensifying GST case in Supreme Court
The fall in profit also reflected a continued increase in legal expenses, which the company attributed to litigation-related costs arising from GST disputes currently under judicial review.
ADVERTISEMENT
Delta Corp Limited reported a decline in profit for the quarter ended June 30, 2025, as the company grappled with ongoing Goods and Services Tax (GST) litigation now before the Supreme Court. The group’s consolidated profit before tax for the quarter stood at ₹37.95 crore, down significantly from ₹252.83 crore in the previous quarter, when it had benefited from one-time exceptional gains.
The fall in profit also reflected a continued increase in legal expenses, which the company attributed to litigation-related costs arising from GST disputes currently under judicial review.
Delta Corp, India’s leading listed gaming and hospitality company, had earlier received show cause notices from the Directorate General of GST Intelligence for an alleged short payment of taxes aggregating ₹23,207.30 crore for the period between July 2017 and November 2022. The notices were issued to Delta Corp, two of its subsidiaries, and a now-divested associate company, Deltatech Gaming Limited.
The central claim of the tax authorities is that GST should have been levied on the gross bet value or face value of the games played on casino floors and online platforms, rather than on the gross gaming revenue or rake amount. This interpretation has been challenged by the company and is now part of a broader legal battle affecting the entire industry.
Despite the revenue from operations rising marginally to ₹184.17 crore in the quarter, from ₹182.65 crore in the March quarter, legal expenses surged, contributing to a moderation in the group’s bottom line. Net profit after tax stood at ₹29.46 crore in the June quarter, compared to ₹180.07 crore in the quarter ending March 2025. The company reported other comprehensive income of ₹18.94 crore, resulting in a total comprehensive income of ₹48.40 crore.
The company clarified that no provisions were made in the financial statements with respect to the alleged GST dues, asserting that the notices were arbitrary and not legally sustainable. The matter has been stayed by various High Courts, and the Supreme Court has admitted a plea from the Union of India to consolidate similar cases from across the country. Management remains confident of a favourable outcome and, accordingly, has not recognised any impairment towards goodwill, investments or loans extended to affected subsidiaries and the erstwhile associate.
Delta Corp’s standalone performance also reflected the pressure from the litigation. Standalone net profit declined to ₹25.84 crore in Q1 FY26, down from ₹59.35 crore in the previous quarter and ₹40.48 crore in the same quarter a year ago. The decline followed the absence of one-time gains that boosted the March quarter’s figures, particularly from the sale of a 51 percent stake in Deltatech Gaming Limited. Revenue from gaming operations remained steady at ₹118.90 crore, while hospitality revenue fell to ₹12 crore from ₹16.29 crore in the prior quarter.
The company’s board, which met on August 4, also approved amendments to its Employee Stock Appreciation Rights Plan (ESARP-2019) and fixed August 8 as the record date for final dividend entitlement, subject to shareholder approval at the upcoming Annual General Meeting on September 11. The board reaffirmed that the scheme of arrangement involving several group companies, pending approval from the Mumbai bench of the National Company Law Tribunal, had not yet been factored into the financials.
Delta Corp’s management reiterated its belief that the company and its subsidiaries have strong legal grounds and will continue to defend their position robustly in the ongoing litigation.
