CLSA has maintained an Underperform rating on Nazara Technologies, with a target price of ₹665, citing valuation concerns and challenges in its core business segments.
- 3QFY25 revenue was boosted by acquisitions, but the underlying business trends remain weak.
- The Kiddopia segment continues to see subscriber losses, raising concerns about long-term revenue stability.
- Nodwin Gaming’s revenue grew, but the company reported an EBITDA loss, impacting overall profitability.
Additionally, Nazara has announced plans to raise ₹5 billion from existing investors at ₹990 per share, which will trigger an open offer.
Despite the fundraising, CLSA remains cautious, highlighting that the stock trades at ~50x FY26 P/E, which appears expensive given the ongoing operational challenges.
