Nazara Technologies jumped 3.4 per cent to hit a high of Rs 524 in intra-day deals on Thursday after the company acquired majority stake in Pro Football Network LLC (PFN).
At 10:00 am, the stock was trading 2 per cent lower at Rs 517, compared with 0.2 per cent fall in the S&P BSE Sensex. Around 27,000 shares were traded over the counter.
Nazara Technologies is an Indian gaming firm which is a subsidiary of Sportskeeda. Sportskeeda’s parent company Absolute Sports on Wednesday said it has acquired a 73.27 per cent stake in Pro Football Network for $1.82 million (about Rs 16 crore) through capital and secondary stock purchase.
The transaction was completed in an all-cash deal, the company said, and will be eyeing multiple acquisitions in the near future to further strengthen its position in the sports media landscape.
Nitish Mittersen, CEO and Joint Managing Director, Nazara Technologies, said, “The PFN acquisition kickstarts an inorganic growth strategy in addition to the rapid organic growth in revenue and profitability that the company is delivering. Looking forward to the next set of exciting products and content doing what the team will bring to sports fans all over the world.
Earlier this week, the stock had hit a 52-week low of Rs 481.85 on Monday amid current uncertainty in the market.
However, brokerage firm ICICI Securities is bullish on the company’s future growth prospects and has initiated coverage with ‘Buy’ rating for a target price of Rs 700.
“The stock has fallen ~70 percent from its peak (Rs 1,601) and is now trading at its all-time low of Rs 486. At the 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 2-year average historical P/E), the report said.
“We forecast ~37 percent YoY revenue growth in FY24E, led by ~45 percent YoY growth in eSports and ~25 percent YoY growth in Gamified Elementary Education (GEL). We forecast ~86 percent YoY EBITDA growth in FY24E, led by EBITDA margin improved by ~250 bps YoY as eSports IPs scale up and GEL profitability improved due to subscriber additions and price increases, the brokerage report further said.
