Hold Nazara Technologies; target of Rs 923: Prabhudas Lilladher

Prabhudas Lilladher recommended hold rating on Nazara Technologies with a target price of Rs 923 in its research report dated August 14, 2024.

Broker Research

August 19, 2024 / 13:51 IST

hold

26 Aug, 2025 12:21

Volume

Todays L/H

Prabhudas Lilladher's research report on Nazara Technologies

We increase our EPS estimates by 23%/20% for FY25E/FY26E as we 1) incorporate the acquisition of Fuse-Box into our estimates and 2) eliminate minority interest factor post 100% buy-out of Paper Boat (developer of Kiddopia). Nazara reported muted performance as topline declined 1.7% with an EBITDA margin of 10%. The organic growth of Nazara has come under scanner since last 2-3 quarters amid ongoing challenges in Ad-Tech (loss of a large client), Kiddopia (3.3% QoQ fall in subscriber base), and Real Money Gaming (GST levy of 28% on full bet value). However, post the recent fund raise, Nazara is in the execution mode with the acquisition of Freaks 4U Gaming, Fuse-Box Games and full buy-out of Paper Boat. In addition, it received an LoI from resolution professional in connection with the acquisition of Smaaash Entertainment. While a new leg of inorganic growth journey has started, we await execution before turning constructive.

Outlook

We expect sales/EBITDA CAGR of 27%/48% over FY24-FY26E and retain ‘HOLD’ on the stock with a DCF-based TP of Rs923 (earlier Rs878).

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