ICICI Securities research report on Nazara Technologies
We met Nitish Mittersain, Chief Executive Officer and Joint Managing Director, Nazara Technologies (Nazara). Takeaways: 1) 20–25% revenue CAGR along with an EBITDA margin improvement of 500–600bps over the next 2–3 years is achievable for Nazara overall. 2) Nazara’s preferred acquisition targets in real money gaming (RMG) are likely to be in the ‘Poker’ or ‘Rummy’ space, while ‘fantasy gaming’ is lower in the pecking order. 3) Nazara is exploring potential ways to improve monetisation and accelerate growth in eSports and ‘gamified early learning’. 4) The publishing business is a strategic move to build an ecosystem which could open up cross pollination opportunities in the medium term. Maintain BUY with a TP of INR1,080.
Outlook
We maintain BUY on Nazara with a target price of INR 1,080. Our target multiple stands at 38x one-year forward EV/EBITDA (ex-minority).
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