Prabhudas Lilladher's research report on Nazara Technologies
We hosted Mr Manish Agarwal, CEO of Nazara Technologies for a NDR recently. Management indicated that Battle Grounds Mobile India (BGMI) Master Series IP which is to be telecast on Star Sports from June-24 to July-17 is likely to be profitable from first year itself. With respect to off-line events in ESports, incremental revenue addition is expected to be Rs600-700mn (more or less in-line with the guidance given earlier) in FY23E. However, for Kiddopia while US$400K was earmarked to be spent on YouTube, Nazara expended just US$100K and since LTV/CAC went beyond guard rate, incremental spends have been curtailed. Even the brand building exercise (sum ear-marked was US$300-400K per month) has not yielded desired results and hence fresh spends have been paused.
Outlook
Overall, we have increased our EPS estimates by 2-3% and expect sales/PAT CAGR of 35%/54% respectively over FY22-24E. Though growth challenge in Kiddopia persists, Esports is likely to emerge as key growth lever as TV broadcasting during prime time will help increase viewership and popularity multi-fold in future. Retain BUY with a DCF based TP of Rs1,813 (earlier Rs1,747).
More Info
At 15:04 hrs Nazara Technologies was quoting at Rs 617.20, up Rs 94.70, or 18.12 percent.
It has touched an intraday high of Rs 627.00 and an intraday low of Rs 562.00.
It was trading with volumes of 174,957 shares, compared to its thirty day average of shares, a decrease of percent.
In the previous trading session, the share closed up 4.70 percent or Rs 23.47 at Rs 522.50.
The share touched its 52-week high Rs 1,677.20 and 52-week low Rs 484.00 on 11 October, 2021 and 22 June, 2022, respectively.
Currently, it is trading 63.2 percent below its 52-week high and 27.52 percent above its 52-week low.
Market capitalisation stands at Rs 4,052.82 crore.
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