Nazara Technologies - PL Capital Maintains 'Buy' Rating On The Stock After Its Q2 Results; Here's Why

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..PL Capital Report.Nazara Technologies Ltd. reported muted operational performance with Ebitda margin of 7.9% (our estimate: 9.9%) led by higher-than-expected employee cost of Rs 676 million (our estimate:Rs 539 million) amid consolidation of project-intensive business of Freaks 4U and margin deterioration within FuseBox. Since the last three-four quarters, Nazara’s topline growth has been under pressure due to challenges in Ad-Tech (loss of a large client), Kiddopia (subscriber loss since last six quarters), and Real Money Gaming (GST levy of 28% on full bet value). However, we expect headwinds to subside with top-line CAGR of 19.6% over the next two years given-acquisition of Space & Time, a UK based growth-marketing agency,efforts to close IP partnerships in Kiddopia andconsolidation of FuseBox and Freaks 4U. .Further, we expect Ebitda margins to improve from 13.7% in FY25E to 15.7% in FY27E considering the measured approach on new user spends and better margin profile of the newly acquired entities. Nazara trades at EV/sales multiple of 4.7x/3.7x/3.2x on our FY25E/FY26E/FY27E estimates, unadjusted for minority. We maintain our Buy rating on the stock with an SoTP-based target price of Rs 1,182..Click on the attachment to read the full report:.Swiggy Gets A 'Neutral' Rating As Motilal Oswal Initiates Coverage.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Nazara Technologies - PL Capital Maintains 'Buy' Rating On The Stock After Its Q2 Results; Here's Why

The brokerage expects the company's Ebitda margins to improve in FY27E considering the measured approach on new user spends and better margin profile of the newly acquired entities.

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Nazara Technologies - PL Capital Maintains 'Buy' Rating On The Stock After Its Q2 Results; Here's Why

The brokerage expects the company's Ebitda margins to improve in FY27E considering the measured approach on new user spends and better margin profile of the newly acquired entities.

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