Buy Nazara Technologies; target of Rs 1185: Prabhudas Lilladher

Prabhudas Lilladher is bullish on Nazara Technologies has recommended buy rating on the stock with a target price of Rs 1185 in its research report dated September 30, 2024.

Broker Research

October 01, 2024 / 08:57 IST

BUY

26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on Nazara Technologies

We upgrade Nazara Technologies to BUY (earlier HOLD) with an SoTP-based TP of Rs1,185 (earlier Rs923) as we incorporate MTPL acquisition into our valuation. MTPL operates an online gaming platform, PokerBaazi, and we believe this acquisition will strengthen Nazara’s position in real money gaming space. The acquisition is also expected to be value accretive for Nazara given the scale advantage and unfavorable tax regime (28% GST on full pot value) that is making survival increasingly difficult for smaller players (lowers competitive risks). Despite GST headwinds, PokerBaazi reported an EBITDA margin of 10% in FY24, indicating the platform has achieved scale. Further, over the last 3 years, PokerBaazi’s top-line has increased by 4x to Rs4.1bn, and given the primary fund infusion of Rs1.5bn, we expect the growth trajectory to remain strong.

Outlook

We expect sales/EBITDA CAGR of 23%/41% over FY24-FY27E and upgrade the stock to a BUY with an SoTP-based TP of Rs1,185 (refer exhibit 3 for more details).

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