Shares of Nazara Technologies Limited declined 2 percent to Rs 660 in morning trade on May 28 after the company's weak fiscal fourth-quarter results met with pessimism.
Nazara Technologies reported a net profit of Rs 0.18 crore, a sharp decline from Rs 9.4 crore in the same quarter last year. This drop was primarily due to a Rs 16.87 crore loss from discontinued operations, resulting from write-offs in several of the company's legacy businesses, including its real-money gaming business, Halaplay.
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As part of its restructuring efforts, Nazara announced that it is either merging or closing entities that do not align with its future vision, including Nazara Bangladesh and NZ Mobile Nigeria.
Following the results, multiple brokerages issued bearish calls on the mobile gaming company citing slowing growth momentum.
CLSA has issued a sell call on Nazara Technologies, lowering the target price to Rs 525 per share, a downside of 14.5 percent from current levels. The company’s Q4 performance fell below expectations, with significant subscriber losses in Kiddopia and a decline in ad tech revenue. Additionally, there has been a slowdown in e-sports and a revenue drop for Nodwin. As a result, CLSA has reduced its revenue and EBITDA estimates for FY25 and FY26 by 6-13 percent.
Jefferies has a hold call on the stock, lowering the target price to Rs 650 per share. The company's Q4 results were disappointing across the board due to ongoing weaknesses in Kiddopia, Datawrkz, and the real-money gaming segments. Consequently, Jefferies has cut its FY25 and FY26 estimates by 18-21 percent. Jefferies suggests that a key factor for a potential re-rating will be a pick-up in organic growth.
On May 27, Nazara Tech shares gained nearly 10 percent after a block deal involving 48.84 lakh shares of Nazara, representing a 6.38 percent stake in the company took place on the bourses. The company stated that promoter Mitter Infotech sold the shares to Plutus Wealth Management through a block deal.
At about 9:20 am, shares of the company were trading at Rs 661, down 1.7 percent from the last close on the NSE. Nazara Tech shares have slipped 14 percent in the last three months.
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