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Delta Corp and Upper Circuit – What Does it Mean?

12 October 2021
2 minutes

Delta Corp, a gaming and hospitality company, today (October 12, 2021) surged over 12% during the intra-day trade. This is on the back of the company’s corporate earnings where Delta Corp is reported to have narrowed its loss in 2QFY22. 

As per media reports, Delta Corp’s management is confident to surpass the pre-pandemic revenue in the coming quarters. Ships are currently operating at 50% capacity with easing of Covid-19 related restrictions according to media reports. 

Delta Corp and upper circuit

Delta Corp is among the largest casino and gaming companies in the country. It had taken a severe hit with the outbreak of the pandemic last year. 

During the September quarter of FY22, the company reported (in its quarterly earnings) to have narrowed its losses. From a loss of Rs 55 crore in 2QFY21, it has come down to a loss of Rs 22 crore in 2QFY22. This bodes well for the company’s prospects. Its revenue stood at Rs 75 crore this year. There was negligible or no revenue last year. 

As a result of the confidence from the management and better financials in the September quarter, the stock has rallied and is expected to hit the upper circuit. 

Circuit limits are safety measures put in place by exchanges to prevent extreme volatility in the stock market. There are circuit limits for the entire exchange (market) and there are price movement limits for individual stocks as well. 

For stocks, it is the price band. This is the range within which the stock can be traded for that day. The circuit limits vary from 5 to 20% depending on the liquidity, volume and grouping of the stocks.

For Delta Corp, the upper (the maximum rally for the day) is at 15 per cent and the lower band is 10% in BSE. 

So, when the price hits the upper or lower limit set by the exchange, orders will remain pending at that circuit price for that stock for a certain time. 

Where to check?

You as an individual can check the details of the stocks in BSE and NSE.

For instance, in BSE, each stock’s price band (upper and lower limit) will mentioned when you search for a script. This along with market cap, price-earning ratio, previous close, and 52-week high and low.

Similarly, BSE also provides list of stocks across all Groups (A, B, XT etc) that has hit upper or lower circuit for the day. For instance, companies including Trident, Jaiprakash Associate, and Borosil Renewables of Group A stocks in BSE have hit upper circuit.

To view the Research Analyst Disclaimer, please click here.

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