Ace investor Rakesh Jhunjhunwala-backed Nazara Technologies shares hit a record low of Rs 1,181.55, down 7 per cent on the BSE in Wednesday’s intra-day trade. The stock was trading lower for the seventh straight day, having slipped 24 per cent during the period. In the last one month, the company’s shares have fallen by 29 per cent during this period, while the BSE Sensex fell by eight per cent during this period. This share is trading near the issue price of Rs 1,101. At 11030 am, it was trading at Rs 1,192.55, down 6.50 per cent. The share of Nazara Technologies was listed on the stock exchange on March 30 last year. It reached Rs 3,354 on October 11, 2021, its 52-week high. But since then it has fallen by 65 per cent.
As on March 31, 2022, Rakesh Jhunjhunwala held 10.10 per cent stake in Nazara Technologies. The company’s board is scheduled to meet on May 13 in which the financial results for the March quarter and FY 2022 will be considered. The board will also consider issuing bonus issues as well. Nazara is a gaming and sports media platform. Its business is spread in many countries of Africa and North America along with India.
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The firm is yet to announce its Q4 numbers. Its board is slated to meet on May 13 to consider the earnings for the March quarter and the proposal of the issuance of bonus shares.
Market experts are divided on the counter as technical indicators suggest further downfall, although the company’s growth story in the longer term remains intact.
Jinesh Joshi, Research Analyst, Prabhudas Lilladher, who is positive on the counters, said while Kiddopia is facing growth headwinds, the e-sports segment will grow at a strong pace backed by the consolidation of OML.
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“Further, revenue in the RMG segment is also expected to rise by 1.9x over the next 2-years post-acquisition of OpenPlay. Overall, we expect revenue/EBITDA CAGR of 32.1%/32.0% over FY22-24E and the growth story remains intact despite near term challenges.”
The board of the company is scheduled to meet on Friday, May 13, 2022 to consider audited financial results for the quarter and year ended March 2022. The board will also consider a proposal for issuance of bonus shares.
For Q4FY22, Dolat Capital expects a 0.5 per cent quarter-on-quarter (qoq) de-growth for the company as eSports segment returns to a normal quarter (Q3 is seasonally strong). It expects EBIT margins to improve by 27 bps, supported by normalization in profitability in GEL on (accounting impact normalisation).
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Further, guidance for FY23 (40 per cent- 50 per cent), key performance metrics around main businesses are notable moniterables, the brokerage said in a quarterly preview.
In the October-December quarter (Q3FY22), Nazara Technologies had reported 460 bps contraction in consolidated earnings before interest, taxes, depreciation, and amortization (ebitda) margin to 16.3 per cent from 20.9 per cent in Q3FY21.
The company’s consolidated profit after tax had declined 17 per cent year on year (YoY) to Rs 14.8 crore, due to higher operational cost. Revenue from operations, however, grew 42 per cent YoY to Rs 186 crore.
Nazara is an India based diversified gaming and sports media platform with a presence in India and across emerging and developed global markets such as Africa and North America, with offerings across the interactive gaming, Esports and gamified early learning ecosystems.
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The company owns some of the most recognizable IP such as World Cricket Championship, Kiddopia in gamified early learning, NODWIN and Sportskeeda in Esports and Esports media, and Halaplay, Qunami and OpenPlay in skill-based, fantasy and trivia games.
