Gaming major Nazara Technologies recently made headlines due to its exposure in the crisis hit SVB. Now, analysts at ICICI Securities are bullish on the stock, as they feel the stock is available at an attractive valuation.

The Nazara Tech Analyst: Analysts at ICICI Securities led by Abhisek Banerjee initiated coverage on the stock with a ‘buy’ rating and set the price target at ₹700 – around 44% upside from the stock’s last closing price of ₹485.65.

The Nazara Tech Thesis: Analysts noted that the company’s revenue growth exceeded market expectations as the company reported an 84% year-over-year surge in revenue in 9MFY23. The brokerage firm sees the company keeping up the growth in FY24.In FY24, it estimates the gaming tech company’s revenue to see 37% YoY growth and EBITDA to grow at 86% YoY.

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In their research note, ICICI Securities analysts also highlighted that the company has a cash reserve of around ₹660 crore that can be used to scale up through acquisition in real money gaming, once regulatory
clarity emerges. The note added that Nazara Tech can benefit from inexpensive acquisition opportunities in the current liquidity situation.

The stock has been feeling the heat at the bourses for quite some time now, as it is down around 45% in the past year. However, ICICI Securities analysts see this as an opportunity. The firm noted that the stock is down around 70% from its all-time high of ₹1,601 and at this valuation, the upside odds are favourable, which makes the stock a ‘compelling buy.’

Price Action: Nazara Tech shares were up around 0.77% to trade at ₹489.40 in the early hours of trading on Tuesday.

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