Prabhudas Lilladher has given Buy recommendation for Nazara Technologies with a target price of Rs. 2544 in its research report issued on Feb 14, 2022

Prabhudas Lilladher’s research report on Nazara Technologies

We cut our sales (focus is on scale and not profit maximization given hypergrowth nature of the gaming industry) estimates by 9%/13% for FY23/FY24 respectively as change in Apple’s privacy policy has stunted growth in Kiddopia (~3K of net adds in last 2 quarters) making subscriber acquisition a challenging task in near term. While policy enactment has also resulted in elevation of CPT to US$33-34, acquisition of Datawrkz (an ad-tech company) can help optimize CAC and enhance yields, going ahead. Though Kiddopia is facing growth headwinds, E-Sports is expected to grow at 39.4% CAGR over FY22-FY24 backed by consolidation of OML. Further, revenue in RMG segment is also expected to rise by 2.4x over next 2-years post-acquisition of OpenPlay.

Outlook

Overall, we expect revenue revenue/EBITDA CAGR of 32%/28% over FY22-24E and the growth story remains intact despite near term challenges. Consequently, we retain our BUY rating on Nazara with a DCF based TP of Rs2,544 (implied EV/Sales multiple of 6.7x FY24E).

More Info on Trent

At 15:03 hrs Nazara Technologies was quoting at Rs 1,901.25, up Rs 16.75, or 0.89 percent.

It has touched an intraday high of Rs 1,932.95 and an intraday low of Rs 1,850.25.

It was trading with volumes of 9,654 shares, compared to its thirty day average of 13,389 shares, a decrease of -27.90 percent.

In the previous trading session, the share closed down 5.75 percent or Rs 115.05 at Rs 1,884.50.

The share touched its 52-week high Rs 3,354.40 and 52-week low Rs 1,101.00 on 11 October, 2021 and 26 March, 2021, respectively.

Currently, it is trading 43.32 percent below its 52-week high and 72.68 percent above its 52-week low.

Market capitalisation stands at Rs 6,202.11 crore.

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