Rakesh Jhunjhunwala owned Nazara Technologies has zoomed 57% from its IPO cost to now trade at Rs 1,723 per share, but the rally could not be more than. The stock could rise one more 33% from present levels and attain the target cost of Rs 2,300 pegged by international brokerage and study firm Jefferies. Initiating the coverage of Nazara Technologies, Jefferies stated that Nazara Technologies is a diversified play on the gaming ecosystem with several development drivers ahead. Big Bull Rakesh Jhunjhunwala is a pre-IPO investor in Nazara Technologies and continues to hold a 10.82% stake in the enterprise, according to the most up-to-date shareholding pattern readily available with stock exchanges.
Diversified play on gaming ecosystem
Nazara Technologies gives a piece of each aspect of the gaming ecosystem. The firm caters to Gamified Early Learning, eSports, Freemium, Telco Subscription, and Real Money Gaming. Gamified Early Learning and eSports outcome in most of Nazara Technologies income. “Over the last 3-4 years, Nazara has diversified its business through several key acquisitions and added three new segments to its portfolio – gamified early learning, eSports and real money gaming. While these markets are growing at a rapid pace, Nazara’s focus is currently on the first two segments,” Jefferies stated.
Growth drivers ahead
Going ahead the gaming and eSports business has the possible to aid the enterprise develop. Jefferies stated that the two segments are anticipated to register CAGRs of 38% and 25% to $3.1 billion and $209 million, respectively, more than 2020-23, led by increasing smartphone/world wide web penetration and adjust in media consumption habits. According to Jefferies, the eSports marketplace in India is set to develop, driven by the growing quantity of hardcore/mid-core mobile gamers and rise of quite a few OTT/media platforms, which is in turn, driven by increasing smartphone penetration and enhanced network connectivity.
Jefferies added that Nazara Technology’s presence in these markets positions it to provide 28% CAGR in revenues and 46% CAGR in EBITDA more than the economic year 2021-2026.
Upside situation make take stock to Rs 2,300 per share
Nazara Technologies is seen as an investment car focused on producing strategic acquisitions across the gaming ecosystem. In the base case situation, Jefferies has a target cost of Rs 2,030 per share for Nazara Technologies with a ‘buy’ rating. In an upside situation, the brokerage firm expects the stock to rally to Rs 2,300 per share, making use of 1 year forward FY26E multiples discounted back at 15%.
Rakesh Jhunjhunwala owns 10.82% of Nazara Technologies, translating to 32,94,310 equity shares. The present worth of the massive bull’s stake in the enterprise is Rs 567.6 crore.