Nazara Technologies slumps after brokerage view

Further, CLSA also believes that the eSports segment, which accounts for 37% of Nazara’s revenue is likely to come under pressure on the back of intensified competition led by JioGames, Dream11, MPL, and Paytm First Games.

Jun 18, 2021 05:06 IST India Infoline News Service

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Rakesh Jhunjhunwala-backed Nazara Technologies shares fell after the media reports said that the global brokerage house CLSA initiated coverage on the stock with a 'sell' call due to expensive valuation.  It has a target price of Rs1,095 per share for the stock.

According to the CLSA report, the valuation is expensive at 6x FY23 EV to sales and 29x EV to EBITDA. It also said that the valuation is at a 10-75% premium compared to global gaming peers, the media reports added.

Further, CLSA also believes that the eSports segment, which accounts for 37% of Nazara’s revenue is likely to come under pressure on the back of intensified competition led by JioGames, Dream11, MPL, and Paytm First Games.

Nazara Technologies Limited on Thursday has announced that it has signed a binding term sheet to acquire a majority stake in Arrakis Tanitim Organizasyon Pazarlama San. Tic. Ltd. Sti. (Publishme) the largest mobile game publishing agency in the Middle East and Turkey.

The company will invest an approx. amount of Rs20cr for acquiring a 69.82% stake by way of primary and secondary transaction through its subsidiary.

The stock ended at Rs1517.85 down 8.8% from its previous closing of Rs1664.95 on the BSE. The scrip opened at Rs1650.00 and touched a high and low of Rs1660.05 and Rs1463.75, respectively.

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