Rakesh Jhunjhunwala Owned Stock Nazara Technologies has outperformed the BSE Sensex by 20.34% in the last month. Over the same time span, the BSE Sensex gained only 5%. According to analysts,
Jhunjhunwala Owned Stock Nazara Technologies stock soared to a new high of Rs 2,076 in intra-day trade on the BSE on Tuesday. The stock has been up 16% in the previous two trading days.
In the process, the stock of the IT software products company beat its previous high of Rs 2,026.90, which was set on the company’s first day of trading, March 30, 2021.
Nazara Technologies’ main business is subscription/download of games and other material to consumers in India and around the world, as well as digital support services to group companies.
The stock has beaten the market by 30% in the last three weeks, compared to a 4.4% rise in the S&P BSE Sensex. The stock has seen a lot of buying since it was listed, and it now trades at an 89% premium to its issue price of Rs 1,101 per share.
As of June 30, 2021, Rakesh Jhunjhunwala, owns 10.82% of Nazara Technologies. As a result of the market’s quick growth around the world, the gaming business has exploded. A convenient gaming culture will emerge in India as the number of gamers grows.
The availability of smartphones and affordable technology, rising disposable income, and the industry’s growth launchpad will fuel growth, and the industry may make a beneficial contribution to the economy, according to Nazara Technologies’ annual report for the fiscal year 2020-21.
Nazara’s leading market position and expansion in India are exciting prospects for the company.
The business said it wants to improve existing offers and increase monetisation options, as well as pursue strategic investment and acquisition prospects and further build the existing technology stack to improve the platform.
Meanwhile, Prabhudas Lilladher launched coverage on Nazara Technologies with a ‘Buy rating and a target price of Rs 2,342, believing it is a unique play on expanding gaming culture, given that Gen Z and millennials account for around 65% of India’s population demographics.
The company has an early mover advantage in the evolving Esports category (organized 82% unique Esports events with 73% share of the total prize pool as of 2019), which is expected to disrupt the traditional sports landscape in the next 4-5 years and offers a direct play on emerging Ed-Tech market via Kiddopia, according to the brokerage firm’s September 2, 2021 report.
“Nazara is a hyper-growth business model with a repository of IPs across segments. The entire gaming network has been created by acquisitions, a model which is difficult to successfully replicate, in our view. Management’s focus to pursue further inorganic opportunities creates additional growth optionality,” it added.
According to the brokerage firm, Nazara is India’s only publicly-traded gaming company with a scalable business plan (no peer comparison feasible). Furthermore, earnings-based multiples are irrelevant because the focus is on boosting growth rather than profits. While a cursory look at global gaming companies reveals Nazara trades at higher valuations, we believe the premium is justified given India’s better growth prospects (India’s mobile gaming industry is expected to grow at 38% CAGR over the next three years, compared to 9%/10% CAGR for China/US), it added.
