Nazara Tech jumps over 3% on buying majority stake in Pro Football Network

Brokerage firm ICICI Securities has a 'Buy' rating on the stock with a target price of Rs 700 per share.

Nazara Technologies jumped 3.4 per cent to hit a high of Rs 524 in intra-day deals on Thursday after the company said it acquired a majority stake in Pro Football Network LLC (PFN).

At 10:00 AM, the stock was trading 2 per cent at Rs 517 as against a 0.2 per cent decline in the S&P BSE Sensex. The counter had seen trades of around 27,000 shares.

Nazara Technologies an Indian gaming firm is a subsidiary of Sportskeeda. Absolute Sports, the parent company of Sportskeeda, on Wednesday said it acquired a 73.27 per cent stake in Pro Football Network worth $1.82 million (about Rs 16 crore) through primary infusion of capital and secondary stock purchases. 

The company said, the transaction was completed in an all-cash deal, and would be eyeing multiple acquisitions in the near future to further boost its position in the sports media landscape.

Nitish Mittersain, CEO and Joint MD of Nazara Technologies said, “The PFN acquisition kickstarts an inorganic growth strategy in addition to the rapid organic growth in revenues and profitability that the company has been delivering. Looking forward to the next set of exciting products and content the team will bring to sports fans all over the world.” READ MORE

Earlier this week on Monday, the stock had hit 52-week low at Rs 481.85 amid the current market uncertainity.

However, brokerage firm ICICI Securities is optimistic on the future growth prospects of the company and has initiated coverage with a 'Buy' rating for target price of Rs 700. 

"The stock has corrected ~70 per cent from its peak (Rs 1,601) and is now trading at its all-time low of Rs 486. At current market price, it is trading at 45x 1-year forward P/E. We have a target price of Rs 700 on the stock for March 2024. Our target multiple is 41x FY25E EPS (1.5SD below the 2-year average historical P/E)." the report stated.

"We estimate ~37 per cent YoY revenue growth in FY24E, led by ~45 per cent YoY in eSports and ~25 per cent YoY growth in Gamified Early Learning (GEL). We estimate EBITDA growth of ~86 per cent YoY in FY24E led by EBITDA margin improvement of ~250 bps YoY as eSports IPs scale up and GEL profitability improves due subscriber additions and price increases." the brokerage report further stated.