Analysts at global brokerage Jefferies caught up with Nitish Mitresain, founder and MD of Nazara Technologies, who highlighted that the growth outlook for Nodwin and SportKeda is strong. Recent price increases in Kiddopia and the acquisition of Wildworks will help drive growth in the preschool segment.
“While RMG remains an attractive market, Nazara Tech is unlikely to make a big play before regulatory clarity emerges,” the note said. Jefferies raised its estimate to 5-13% and maintained a buy rating on Nazara Tech shares with an upgraded target. Price ₹860 each (from Rs ₹780 earlier) believes that the company is ‘doing the right things’. This year, technology stocks have decreased by about 37%.
After the management took over Nodwin, he highlighted their efforts to transform Nodwin from being just an e-sports event management company to a gaming engagement driven company. He has done content creation around eSports and through his recent acquisitions he offers accessories (Planet Superheroes, Brandscale). Nodwin balance is still over ₹400 m.
“Nazara acquired 100% stake in Wildworks for $10m, representing 0.8x EV/sales. Wildworks is a game developer serving 8-12 year olds with its key IP ‘Animal Jam.’ The acquisition will add US$12m to Nazara’s revenues and help strengthen Nazara’s presence in the gamified classroom in the US, Jeffries added.
The brokerage believes Nazara Tech is a distinct play on the gaming ecosystem, offering exposure to various gaming segments, geographies and revenue streams and strong growth prospects in the eSports segment, driven by strong pick-up in gaming in India and rising value in gamified education. To support subscriber purchases.
He sees better-than-expected revenue growth, particularly in primary education and eSports, improving unit economics in primary education, successful acquisitions and easing regulations on real-money games as key drivers.
The opinions and recommendations presented above are those of individual analysts or distributor companies and not of Mint.
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