On 3 September, GST rates were largely consolidated into two slabs—5% and 18%. Goods from the old 12% and 28% slabs moved to lower rates, essential items were exempted, and a 40% rate remains for “sin” and luxury goods, including carbonated and caffeinated beverages. This overhaul will redraw the playing field for several industries.
Here’s how three listed companies—Delta Corp, Varun Beverages, and Nazara Technologies—are likely to be impacted.
Delta Corp
Delta Corp is India’s largest gaming and hospitality company, operating casino gaming and hospitality services under the Deltin Casinos & Hotels brand.
It runs offshore and onshore casinos across Goa, Sikkim, and Daman, including well-known properties like Deltin Royale, Deltin JAQK, and Deltin Suites in Goa, and The Deltin, a five-star integrated resort in Daman.
Under GST 2.0, the GST Council has approved a 40% demerit rate on online gambling and online money gaming, up from the earlier 28%. This classification brings such activities under banned or harmful goods/services, and is expected to hit Delta Corp’s casino and gaming revenues.
While revenues have been falling over the years, net profits have seen improvement. For the quarter ending 30 June 2025, net sales stood at ₹1,842 million (up from ₹1,780 million a year ago), while net profit dropped to ₹291 million from ₹346 million YoY.
Delta Corp is, however, on an expansion drive. It is investing ₹4.50 billion in a state-of-the-art vessel to replace Kings Casino, doubling its capacity to 4,000 positions. By the end of this year, the company plans to offer a curated mix of world-class gaming, gourmet dining, wellness and entertainment, casual food courts, vibrant sports bars, wellness retreats, kids’ zones, premium retail, and immersive entertainment.
Its real estate foray is also gathering momentum. Through a platform with Alpha Alternatives Fund Advisors LLP and Peninsula Land (with a ₹7.65 billion corpus), it is focusing on the high-potential Mumbai Metropolitan Region, including Alibaug, Khopoli, and Karjat. The platform has acquired two land parcels totalling 40 acres in Alibaug and Karjat—emerging hotspots near Mumbai—with expansion plans underway in other locations.
While the pinch of higher GST will be felt, these moves could support the company’s long-term growth.
Varun Beverages
Varun Beverages is an Indian multinational that manufactures, bottles, and distributes beverages. It handles a wide range of PepsiCo products including Pepsi, 7 Up, Mountain Dew, Mirinda, Tropicana, Gatorade, Sting, Creambell, Lipton Iced Tea, and Aquafina.
The company operates extensively in India (27 states and 7 UTs) as well as in parts of Africa and Asia.
Under GST 2.0, the tax on carbonated and caffeinated beverages has jumped from 28% plus cess to 40%, raising cost pressures on a core part of Varun Beverages’ portfolio. This could push up prices and weigh on demand.
On the positive side, GST rates on drinking water and fruit juices (about 30% of its volumes) have been slashed from 18% and 12% to 5%, likely boosting demand. The company could pass on these tax benefits to consumers and expand capacity to capitalise on this opportunity.
For the quarter ended 30 June 2025, Varun Beverages posted revenue of ₹71,630 million (vs ₹73,337 million in June 2024) and net profit of ₹13,267 million (vs ₹12,624 million YoY).
The company has been on an expansion spree. In international markets, Varun Beverages Morocco has begun commercial production of Cheetos. It has set up a new can line at its Durban facility and awaits regulatory approval to purchase adjoining land at its Boksburg unit for further capacity and backward integration. It has also acquired 50% of Everest Industrial Lanka in Sri Lanka, which makes commercial visi-coolers.
Domestically, it has commissioned new production facilities at Prayagraj (UP), Damtal (HP), Buxar (Bihar), and Mendipathar (Meghalaya).
Overall, while the hike on carbonated beverages may hurt, the cut on juices and water could cushion the impact, supporting Varun Beverages’ steady growth trajectory.
Nazara Technologies
Nazara Technologies is a leading global gaming and sports media company. It has evolved from an online games portal into India’s only listed games company with a portfolio spanning interactive gaming, esports, edu-tech, and gamified early learning.
It has grown via organic expansion and strategic acquisitions, including Nodwin Gaming (a major Indian esports organiser) and Paper Boat Apps (an edu-tech company).
GST 2.0 has imposed a 40% tax on gaming activities, including online money games and betting. However, Nazara has clarified it has no direct exposure to real money gaming. In Q1 FY26, the contribution of real money gaming to its revenue and EBITDA was nil.
Nazara’s only indirect exposure is through its 46.07% stake in Moonshine Technologies Private Limited (which runs PokerBaazi). Since Nazara does not hold a majority stake or control, Moonshine’s revenue is not consolidated and does not affect Nazara’s reported revenue or EBITDA. Moonshine’s contribution to Nazara’s net profits was negative in Q1 FY26.
Nazara has invested ₹8.05 billion in Moonshine Technologies (via cash and stock) and also holds compulsory convertible shares worth ₹2.55 billion. The company does not expect any material adverse impact on its operating financial performance from GST 2.0.
Conclusion
Many companies may not face a severe hit from GST 2.0 in terms of the new sin tax. For instance, Varun Beverages appears cushioned from the impact, while Nazara Technologies is likely to see only an insignificant effect.
In most cases, any increase in the overall tax burden will probably be passed on to consumers, resulting in higher retail prices for these products — though this could dampen volumes.
Investors should carefully assess a company’s fundamentals, corporate governance standards, and stock valuations as part of their due diligence before making investment decisions.
Happy Investing.
Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such.
This article is syndicated from Equitymaster.com
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