Buy Nazara Technologies; target of Rs 1080: ICICI Securities

ICICI Securities research report on Nazara Technologies

On 3 July’24, we hosted Nodwin’s management for an interaction with investors. Nodwin has increased its stake in Freaks 4U gaming, from 13.51% to 57%. They plan to eventually acquire 100% of the company through a share swap deal. According to management, Freaks 4U gaming’s strength in the PC gaming market is complementary to Nodwin’s capability in mobile gaming; and Nodwin’s frugal execution should help them turn profitable by FY25E. Management outlined their vision of increasing ‘timeshare of mindshare’ of gamers by expanding their ‘house of brands’ approach towards gaming IPs and highlighted that acquisitions are necessary when ‘buy’ is more economical than ‘build’.

Outlook

We maintain our BUY rating on Nazara with a target price of INR 1,080. Our target multiple stands at 37x FY26E EV/EBITDA (ex-minority).