CLSA has reiterated its underperform rating on Nazara Technologies, assigning a target price of ₹705, which implies a sharp downside from the current market price of ₹1,270.00.
In its Q4FY25 review, CLSA flagged a performance miss, with consolidated revenue down 3% QoQ to ₹5.2 billion, and EBITDA also falling 3% QoQ to ₹510 million, both below expectations. While FY25 revenue surged 43% YoY to ₹16.2 billion, the EBITDA margin dropped 179 basis points to 9.4%, reflecting cost pressures despite top-line growth.
The company’s e-sports vertical delivered ₹7.6 billion in revenue, up 21% YoY, though EBITDA declined 2% YoY. Nazara’s associate in real-money gaming, PokerBaazi, also reported a 39% YoY increase in net revenue for FY25, but remained loss-making.
Citing the Q4 miss, CLSA has cut its FY26–27 revenue and PAT estimates by 2%–9%, adding that the financial impact of the Curves Games acquisition is still not included in current forecasts.
Despite Nazara’s aggressive acquisition strategy and scale-up in gaming segments, CLSA remains cautious due to margin pressures, mixed profitability trends, and uncertainty around monetization timelines.
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