NSEEven as shares of gaming company Nazara Technologies rose more than 11% in a day and 15% over two sessions, at least two global brokerages have cut their target prices for the stock, in which Rekha Jhunjhunwala holds an 8.5% stake.This was on a day when promoter Nitish Mittersain sold 48.8 lakh equity shares, representing 6.38% stake to existing investor Plutus Wealth Management through a block deal, according to a release.
The brokerage pointed to a subscriber loss in Kiddopia, one of Nazara Tech’s key three segments, alongside a decline in ad tech revenue.
It also noted that during the January to March 2024 quarter, there has been a slowdown in the firm’s e-sports segment, specifically the Nodwin revenue.The analyst has cut estimates for the gaming platform’s revenue and earnings before interest, taxes, depreciation, and amortisation or EBITDA by 6-13% for 2025-26.
Earlier on May 27, CEO Mittersain told CNBC-TV18 that the firm is in talks with three to four core gaming firms and hopes to acquire one in FY25.Jefferies added that a pick-up in organic growth for Nazara Tech will be key for re-rating.
It expects the company to deliver CAGR 10% revenue and 27% EBITDA growth over FY24-27.Nazara Tech shares traded 2.3% lower at ₹656.65 at 9:23 am on NSE on May 28.
NSE
Even as shares of gaming company Nazara Technologies rose more than 11% in a day and 15% over two sessions, at least two global brokerages have cut their target prices for the stock, in which Rekha Jhunjhunwala holds an 8.5% stake.This was on a day when promoter Nitish Mittersain sold 48.8 lakh equity shares, representing 6.38% stake to existing investor Plutus Wealth Management through a block deal, according to a release. The promoters of Nazara Technologies will retain control of the company, with Mittersain continuing in his current role as CEO and joint Managing Director.However, reacting to the development and the company’s results over the weekend, CLSA and Jefferies both cut target prices on the stock stating the fourth quarter earnings were a miss.CLSA has given it a sell call and cut the target price to ₹525, implying it expects a downside of 23% in the stock from the closing price of May 27. The brokerage pointed to a subscriber loss in Kiddopia, one of Nazara Tech’s key three segments, alongside a decline in ad tech revenue. It also noted that during the January to March 2024 quarter, there has been a slowdown in the firm’s e-sports segment, specifically the Nodwin revenue.The analyst has cut estimates for the gaming platform’s revenue and earnings before interest, taxes, depreciation, and amortisation or EBITDA by 6-13% for 2025-26. It added that the stock is expensive at 39x CL25 PE.CLSA also highlighted that promoters’ ownership is down to low 10%.Jefferies, on the other hand, has a hold call on Nazara Tech shares but sees a potential downside of 5% following an “all round Q4 miss” due to continued weakness in Kiddopia, Datawrkz and RMG segment.The brokerage has cut its FY25/26 estimates by 18-21%, it said.It also noted that the firm plans to accelerate merger and acquisition given hefty cash balance. Earlier on May 27, CEO Mittersain told CNBC-TV18 that the firm is in talks with three to four core gaming firms and hopes to acquire one in FY25.Jefferies added that a pick-up in organic growth for Nazara Tech will be key for re-rating. It expects the company to deliver CAGR 10% revenue and 27% EBITDA growth over FY24-27.Nazara Tech shares traded 2.3% lower at ₹656.65 at 9:23 am on NSE on May 28.
