Delta Corp surges 17% as BSE revises circuit limit from 5% to 20%

A circuit breaker is a measure to stem the steep fall or a sharp rise in the price of a security / stock or the index as a whole.
Delta Corp shares surged 17.4 per cent to Rs 115.5 on the BSE on Friday, supported by heavy volume, after the BSE increased its circuit limit from 5 per cent to 20 per cent. At 11:05 am, the stock was trading at Rs 110 apiece on the BSE, as against 80 points, or 0.21 per cent, slide in the benchmark S&P BSE Sensex. 

A combined 11.77 million shares had changed hands on the NSE and BSE till the time of writing of this report. Of this, volumes on BSE were 0.5 million, which was nearly double the volume seen on the counter so far in the current week on the exchange. 

"Trading Members of the Exchange are hereby informed that as a part of review of the surveillance action, the price band are revised in the various scrips. The revised price band as indicated there under will be effective from August 07, 2020. Scrips in Trade for Trade (T2T) segments will continue to attract a price band of 5 per cent or lower, as applicable," the exchange said in a notification. CLICK HERE TO READ THE NOTIFICATION

A circuit breaker is a measure to stem the steep fall or a sharp rise in the price of a security / stock or the index as a whole. 

ALSO READ: Eveready Ind., Delta Corp: BSE revises circuit limit for over 600 stocks

For June quarter of FY20, Delta Corp posted a net profit of Rs 42.08 crore, down 3.86 per cent, from Rs 43.77 crore-profit reported in June quarter of FY20. Besides, it net sales came in at Rs 0.03 crore, plunging 99.97 pe cent from Rs 119.91 crore posted in the year-ago period. EBITDA, meanwhile, stood negative at Rs 7.49 crore in June 2020, down 110.97 per cent, from Rs 68.27 crore in Q1FY20.

"Delta Corp's casino business has been severely hit by COVID-19 and we expect it to recover gradually after it opens. However, its online gaming business has recorded strong growth. Delta's online poker asset – Adda52.com – leads in this space and, according to management, has had a substantial jump in traffic. We expect Adda52.com's revenue to grow 50 per cent in FY21 and its EBITDA, aided by operating leverage, to grow around 80-100 per cent. We expect Adda52.com to become a significant part of Delta’s earnings amid increasing popularity and network effects. Using EV/EBITDA of 11x for Adda52.com (based on global peers) and adjusting for cash, the market is allocating Rs 800 crore to Delta's casino, land and hotel business (implied EV/EBITDA of 4.3x, a deep discount to global peers)," said global brokerage UBS in a report dated June 29, 2020. The brokerage values the company at 20x FY22E PE and 12x FY22E EV/EBITDA, and has a 'Buy' rating on the stock with a target price of Rs 150.

At the end of June quarter, ace investor Rakesh Jhunjhunwala and Rekha Jhunjhunwala held 4.28 per cent and 3.16 per cent stake, respectively. Besides, Mutual Funds held 6.63 per cent stake, and foreign portifolio investors (FPIs) held 11.36 per cent stake. Of these, Goldman Sachs India and Morgan Stanley Asia held 1.15 per cent and 1.14 per cent stake, respectively, shareholding pattern data show. 


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