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Target: ₹1,080
CMP: ₹859.20
We met Nitish Mittersain, Chief Executive Officer and Joint Managing Director, Nazara Technologies.
Key takeaways: 20–25 per cent revenue CAGR along with an EBITDA margin improvement of 500–600 bps over the next 2–3 years is achievable; 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; exploring potential ways to improve monetisation and accelerate growth in eSports and ‘gamified early learning’; and the publishing business is a strategic move to build an ecosystem that could open up cross-pollination opportunities in the medium term.
Also read: Broker’s call: PI Industries (Buy)
Mittersain stressed two major problems that Nazara Publishing is trying to solve. Firstly, to provide capital and support to Indian developers for launching their games. Secondly, partnering with global developers to launch games in India.
Cash reserves of ₹13,000 crore on a consolidated basis allow them to look for acquisition opportunities of different sizes and scales.
Key risks: Impact due to increased competition/slowdown in US markets and the inability to identify and integrate acquisitions.
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