Nazara Tech jumps 5% on strong Q1 results; stock up 20% so far in 2023

Shares of Nazara Technologies rallied 5 per cent to Rs 698 per share in Monday’s intra-day trade, after the company clocked 31 per cent year-on-year (YoY) profit increase at Rs 20.86 crore in the April-June quarter of fiscal year 2023-24 (Q1FY24).
 

So far this calendar year (CY23), the stock of Nazara Tech has surged 20 per cent, as against a 8 per cent jump in the S&P BSE Sensex.
 

In the recently concluded quarter, Nazara’s revenue from operations climbed 14 per cent YoY to Rs 254.4 crore. However, a sequential decline of 12 per cent was seen from Rs 289.32 crore in Q4FY23.
 

The management remains optimistic of growth on the revenue and earnings before interest, tax, depreciation, and amortisation (Ebitda) front in quarters ahead.
 

“Our revenue and Ebitda growth is expected to accelerate in coming quarters due to seasonality and our decision to defer key e-sports launches to benefit from upcoming opportunities,” the company added.
 

The firm has a diverse portfolio across segments like gaming, e-sports and ad-tech. The e-sports business drew in a major chunk of the firm’s revenue, with a 46 per cent share. Likewise, its gaming segment accounted for 43 per cent of the revenue share, while adtech made up the remaining 11 per cent.
 

That said, though e-sports is a nascent concept in India, analysts at Prabhudas Lilladher believe that television broadcasting will not only help increase popularity of e-sports as the medium, but also boost media rights licensing revenue of Nazara.

“We retain a buy on the stock with a target price of Rs 804 per share,” the brokerage firm added.
 

The company, further, said that this was the tenth straight quarter of YoY growth in revenue and profits since its initial public offering (IPO).
 

Moreover, the firm does not expect the Goods and Services Tax (GST) Council’s recent decision to levy a blanket 28 per cent tax on online gaming to affect its operations.