The founder and MD of Nazara Technologies, Nitish Mittersain, met with analysts from the global brokerage Jefferies and emphasised that the growth prospects for Nodwin and Sportskeeda is still favourable. The acquisition of Wildworks and Kiddopia’s recent pricing rises will spur expansion in the early learning market.
Although RMG is still a desirable market, the letter noted that Nazara Tech is unlikely to make a significant move until regulatory certainty is established. With a revised target price of ₹860 per share (up from the previous target price of ₹780), Jefferies has increased its target for Nazara Tech by 5–13% and maintained its Buy recommendation on the stock because it feels the firm is ‘making the right moves’. The IT stock has decreased by around 37% so far this year.
The management emphasised that, since acquiring Nodwin, they have worked to diversify the business so that it is now more than just an event management company for e-sports competitions. Through recent acquisitions, it has ventured into producing eSports-related content (Playground) and selling accessories (Planet Superheroes, Brandscale). It was noted that Nodwin still has over ₹400 million in capital on its balance sheet, which would be used to expand upon these efforts.
“Nazara paid $10 million for a 100% stake in Wildworks, implying a 0.8x EV/Sales ratio. The primary intellectual property of Wildworks, a game creator for children aged 8 to 12, is “Animal Jam.” Nazara intends to resurrect growth by boosting user acquisition expenditures and promoting content upgrades. The acquisition will increase Nazara’s revenue by $12 million and strengthen its position in the US game-based learning market, according to Jefferies.
The brokerage firm thinks Nazara Tech is a unique investment in the gaming industry because it provides exposure to a variety of gaming segments, regions, and revenue streams, as well as strong growth prospects in the eSports market, which are being fueled by a strong uptick in gaming in India and price increases in gamified learning to support subscriber acquisitions.
Stronger-than-anticipated revenue growth, notably in early learning and eSports, increasing early learning unit economics, successful acquisitions, and loosening real-money gaming rules are seen as the main drivers.