Top Gaming Stocks In India: Don’t you miss the days when we could just come home and just plug into our favourite games? Luckily for us today we can do the same at our convenience thanks to smartphones.
The gaming industry too has evolved over the last decade and thanks to the accessibility you can find people zoned into games like PUBG at every corner.
For those who understand the potential games have and also those for those looking for industries with huge upside in the future, we’ve got you covered.
In this article, we take a look at the gaming industry and we also take a look at the top gaming stocks in India. Keep reading to find out!
The Gaming Industry – Overview
To be honest, the gaming industry has always existed in different forms, be it board games or gladiator matches, coin-operated machines in gaming zones.
These eventually evolved into 64-bit game consoles, PlayStations, and finally HD realistic games on our mobile phones. Companies are gearing up to be a part of the gaming industry, especially with the gaming experience that can come into existence with the Metaverse.
The Gaming Industry in India
The Indian gaming industry is experiencing strong growth in terms of engagement, genres, monetisation as well as the number of online gamers. India is emerging as an investment opportunity as well as a talent hub for the world as it is becoming one of the top gaming markets in the world.
According to the latest BCG Sequoia India report, the gaming industry in India is 1% of the global gaming market, and it is growing rapidly. Currently, it is generating $1.5 billion in revenue and is expected to grow to $5 billion by 2025.
Although the size of the Indian gaming market pales in comparison to the US and China it is still growing at a whopping 38% CAGR for the next 5 years!
A Quick Note: With the information that is mentioned in this article, we do not recommend buying or investing in any of the gaming stocks mentioned below. Investors are recommended to do complete research before investing.
Top Gaming Stocks in India
Though the gaming industry is growing, it is relatively new. Many investors find it difficult to find the top gaming stocks to make investments. Here’s a list of top gaming stocks in India and an overview of their fundamentals.
Gaming Stocks in India #1: Nazara Technologies Ltd
|Face Value (₹): 4||Market Cap (₹): 3,507 Cr|
|EPS TTM (₹): 4.36||Promoter’s holdings (%): 19.2|
|Debt to Equity Ratio: 0||Dividend Yield (%): 0|
|ROE (%): 3.34||Stock P/E: 123|
|Current Ratio: 5.29||Net Profit Margin (%): 8.16|
Nazara Technologies came up with its IPO last year and investors were rewarded with stellar listing gains. It is a leading diversified gaming and sports media platform, based out of India. It was backed by ace investor Rakesh Jhunjhunwala, who owns its shares even now.
Nazara Technologies is present in emerging as well as developed global markets. Its offerings include interactive gaming, gamified early learning ecosystems and eSports.
Its recognizable intellectual property includes CarromClash, Sportskeeda, Nodwin, and Kiddopia amongst others. Let’s take a look at its fundamentals.
Financial Analysis of Nazara Technologies Ltd
With a market capitalization of ₹3,507 Cr, Nazara Technologies is a small-cap stock in the IT-Software sector. Currently, the stock is trading at 3.4 times its book value, indicating excellent prospects for the future.
However, its promoter holding is low at 19.20%. It had decreased by 0.12% during the last quarter.
Another attractive feature of this stock is its zero debt. This indicates that the company hasn’t borrowed funds for operations. Adding leverage could lead to more returns for shareholders. Its current ratio, as well as quick ratio, is 5.28. This indicates that its assets are liquid.
Its PE ratio is higher than the industry average, indicating that the stock is overvalued. It indicates that investors are willing to pay a higher amount to buy its shares because of growth expectations in the future.
Its revenue grew during the last three years with an average of 35.87% while its net profit stood at Rs. 28 crores in March 2022 from a loss of Rs. 2 crore FY20.
Gaming Stocks in India #2: Zensar Technologies Limited
|Face Value (₹): 2||Market Cap (₹): 5,634 Cr|
|EPS (₹): 18.4||Promoter’s Holdings (%): 49.2|
|Debt to Equity: 0.12||Dividend Yield (%): 2|
|ROE (%): 16.4||Stock P/E: 13.7|
|Current Ratio: 2.53||Net Profit Margin: 2.53|
Zensar Technologies Limited is a subsidiary of a well-known RPG group. This stock trades on the National Stock Exchange (NSE) as well as the Bombay Stock Exchange (BSE). It is an MNC with its presence in 20 countries across the globe.
It provides end to end services in IT development, business process outsourcing, consulting and implementation. It provides an overall online game development process that has improved with Agile.
It has created a specialized Game Testing Centre of Excellence which aims at helping gaming companies to leverage the benefits of speed and efficiency.
It has testing services that are specially designed to address the unique challenges that are faced by the gaming industry. These include security, speed, faster games, overall user experience and so on.
These testing services will help to build a cost-effective and robust operation.
Financial Analysis of Zensar Technologies Limited
Zensar Technologies has a market capitalization of ₹ 5,634 Cr making it a smallcap company. Its PE ratio is lower than the industry average. This indicates that it might be undervalued or is doing exceptionally well as compared to its past trends.
Its return on equity for the last years was 16.4%, which is good. It has a high current ratio and a quick ratio of 2.53. This is higher than the ideal. However, it indicates that the company is in a good position to repay its creditors.
Its debt to equity ratio is 0.12, which means that it did not borrow finance for its operations. Its promoters hold a 49.2% stake in the company and this has remained stable for a few quarters.
It has a net profit margin of 9.82%.
Gaming Stocks in India #3: Tata Consultancy Services Limited
|Face Value (₹): 1||Market Cap (₹): 1,204,249 Cr|
|EPS (₹): 105||Promoter’s Holdings (%): 72.3|
|Debt to Equity: 0.09||Dividend Yield (%): 1.31|
|ROE (%): 43.6||Stock P/E: 31|
|Current Ratio: 1.84||Net Profit Margin: 20.0|
Tata Consultancy Services is an Indian multinational company that is engaged in providing IT services and consulting. It is among the most valuable IT brands worldwide.
It is the biggest IT company in India in terms of market capitalization. Its services include Mobile apps, Virtual reality games, game development, cloud solutions, automation and AI and more.
Financial Analysis of Tata Consultancy Services Limited
TCS has a market cap of 12,04,249 Cr, making it a large-cap company. Its PE ratio is almost the same as industry PE. It has a good average ROE for the past three years, at 40.08%.
Its debt to equity ratio is negligible, indicating that it has little to no borrowings. It has an ideal current ratio and a quick ratio of 1.84. Its promoter’s holdings are very high at 72.3%, indicating their confidence in the company.
It has had weak revenue growth for the last three years, with an average of 6.90%. It has had weak net profit growth for the last three years, at an average of 5.82%.
Gaming Stocks in India #4: Infosys Limited
|Face Value (₹): 5||Market Cap (₹): 651,908 Cr|
|EPS (₹): 53||Promoter’s Holdings (%): 13.12|
|Debt to Equity: 0.08||Dividend Yield (%): 2|
|ROE (%): 29||Stock P/E: 29.3|
|Current Ratio: 1.87||Net Profit Margin: 18.1|
Infosys Limited is an Indian MNC that provides information technology, outsourcing services and business consulting. It is one of the largest IT companies in the world and the second-largest in India in terms of market capitalization.
It has experienced developers who have worked in AR/VR and 3D games. Need we say more? Let’s take a look at some of its fundamentals:
Financial Analysis of Infosys Limited
Infosys has a market capitalization of Rs. 651,908 Cr, making it a large-cap stock. Its promotors holding is at 13.12%, which is good, considering that it is a large company. Its PE is at par with the industry average.
It has had a good average ROE for the last three years, at 27.51%. Its current ratio and quick ratio, both are at 1.87, which is within the ideal range. It has a lower net profit margin as compared to the previous three years.
It has had weak revenue growth and net profit growth for the last three years with an average of 10.24% and 10.04% respectively. Its debt-equity ratio is non-significant, indicating that it has little or no borrowings.
It has a good stock PE of 29.3. Its return on equity is very good at 29%.
Gaming Stocks in India #5: Tech Mahindra Limited
|Face Value (₹): 5||Market Cap (₹): 102,525 Cr|
|EPS (₹): 55||Promoter’s Holdings (%): 35.2|
|Debt to Equity: 0.10||Dividend Yield (%): 1.43|
|ROE (%): 21.5||Stock P/E: 19.2|
|Current Ratio: 1.60||Net Profit Margin: 12.6|
Tech Mahindra Limited, again, is one of the top Indian multinational companies in the IT Sector. It is a part of the Mahindra Group and is a leading provider of consulting, digital transformation and business reengineering services and solutions.
It entered the gaming business in 2015 and built gaming technologies and platforms with a focus on PC and mobile games. It creates platforms that can be used by game builders. It focuses on big data, the internet of things, virtual reality and management services.
Financial Analysis of Tech Mahindra Limited
Tech Mahindra has a market cap of 102,525 Cr, making it a large-cap stock. Its PE ratio is lower than the industry average, which means that it is undervalued. It has a good average ROE for the last three years at 21.5%.
It has a low debt to equity ratio of 0.1, which means that it is using little leverage. Its current ratio is 1.60.
They are in the ideal range. Its 3-year revenue growth and profit growth have been low at 6.59% and 11.37% respectively. It has a healthy promoter’s shareholding at 35.2%.
Gaming Stocks in India #6: Delta Corp Limited
|Face Value (₹): 1||Market Cap (₹): 5,319 Cr|
|EPS (₹): 5.73||Promoter’s holdings (%): 33.3%|
|Debt to Equity Ratio: 0||Dividend Yield (%): 0.65|
|ROE (%): 3.65||Stock P/E: 33.4|
|Current Ratio: 4.33||Net Profit Margin (%): 11.9|
Delta Corp Limited was incorporated in 1990 and is engaged in the businesses of casinos, online gaming, real estate and hospitality.
Along with its subsidiaries, it owns and operates casinos in Goa, Sikkim and Nepal. It acquired Gauss Networks Private Limited and ventured into the fast-growing online gaming sector in India.
For quite some time, it was the only listed gaming stock in India. This has helped it to secure a leadership position in the market. It operates casinos: online, electronic and live.
Let’s take a look at some of its fundamentals. Currently, ace investor Rakesh Jhunjhunwala has about 3.25 Crores worth of holding in this stock.
Financial Analysis of Delta Corp Limited
Delta Corp Limited has a market capitalization of ₹5,319 Cr, making it a small-cap stock. Its PE ratio is higher than the industry’s average PE.
It is trading at 2.63 times its book value. This means that investors believe that the company has good future prospects.
It has a good current ratio of 4.33 and a quick ratio of 3.64. This indicates that its assets are pretty liquid. Its sales have still not reached pre-Covid heights. Its promoter holding is low at 33.3%, which is low.
Its return on equity for the year was 3.65%. Its debt to equity ratio is 0. In general, it is better to invest in companies with a debt-to-equity ratio lower than other gaming companies in India
We had a look at some of the top gaming stocks in India that are listed. A few other companies that are also doing well in the gaming sector in India are Hyperlink InfoSystem, Genieee Games, Dhruva Interactive, GSN Games India, Fgfactory, Orangesoft, Unanimous Studios, Scand, and White Widget.
The gaming industry is relatively new and it has been growing. Existing companies have verticals dedicated to gaming, but there are many new and emerging companies that are solely focused especially on online gaming.
Nazara Tech is one such gaming stock in India. We hope to see many more gaming companies expanding and getting listed in India. That’s all for the article on top gaming stocks in India. Happy Investing!
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