ICICI Securities's research report on Nazara Technologies
In Q2FY26, Nazara recognised an impairment of INR 9.2bn on its investment in Moonshine Technologies due to the regulatory ban on RMG. Nodwin was de-consolidated in Q2FY26. Nodwin impaired its investment in Freaks4U. The impact on Nazara was INR 2bn. Sportskeeda was impacted negatively due to change in Google’s SEO algorithm. On the positive side, Fusebox acquisition has fared better than expected. There are also early signs of improvement in the early learning segment (Kiddopia and Animal Jam). Management has guided for ~25% EBITDA margin in the gaming business in the medium term. This, in our view, should drive consolidated EBITDA margin of ~20%. We think execution on this parameter shall be key to watch. Upgrade to HOLD; INR 275 target price unchanged.
Outlook
We upgrade our rating on the stock from Reduce to HOLD, with an unchanged target price of INR 275 (earlier INR 1,100 stock split 1:4) valuing Nazara Technologies using the SoTP framework.
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