Hold Nazara Technologies; target of Rs 1241: Prabhudas Lilladher

Prabhudas Lilladher recommended hold rating on Nazara Technologies with a target price of Rs 1241 in its research report dated May 27, 2025.

Broker Research

May 27, 2025 / 15:00 IST

hold

26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on Nazara Technologies

We cut our PAT estimates by 15%/6% for FY26E/FY27E as we re-align our depreciation forecast & profitability assumptions for Nodwin and downgrade NAZARA to a HOLD (earlier BUY) with a revised TP of Rs1,241 amid 26% rise in stock price over the last 1 month. NAZARA reported an EBITDA margin of 9.8% (PLe 9.0%) while PAT was impacted by an impairment charge of Rs153mn pertaining to the erstwhile accessories business. We expect sales CAGR of 27.5% over next 2 years led by the recent acquisition of Curve Games with an EBITDA margin of 10.6%/12.3% for FY26E/FY27E. Given the improvement in CPT to US$33.7, price rise to US$12.99 per month and expanding IP integrations, we have increased our target EV/sales multiple of Kiddopia to 3.5x.

Outlook

Further, we have incorporated the acquisition of Curve Games into our SoTP valuation matrix and arrive at a blended TP of Rs1,241 (refer exhibit 6 for more details). Downgrade to HOLD.

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