Nazara looks like a compelling play in digital space due to its offerings: Elara Capital

The report further stated that Nazara may trade at an even higher multiple vs expectations, as it is a pure-play digital company offering the potential of 30% CAGR as per its estimates

e4m by exchange4media Staff
Published: Mar 10, 2021 2:32 PM  | 3 min read
Nazara - Elara Capital

Elara Capital has published a report on IPO-bound gaming company Nazara Technologies stating that the company looks like a compelling play in the digital space due to its end-to-end offerings from eSports to casual & fantasy gaming. It also said that Nazara should command a premium valuation on enterprise value (EV)/sales.

The report further stated that Nazara may trade at an even higher multiple vs expectations, as it is a pure-play digital company offering the potential of 30% CAGR as per its estimates, and scarcity premium with almost no traditional company showing the capability to grow at this pace in the medium term.

"Global gaming and eSports companies are trading at 3.3x one-year forward EV/sales despite much lower growth rates than in India; given Nazara is India’s gaming play with higher growth rates, it should command a premium valuation on EV/sales," the report said.

Nazara has properties like Children’s learning platform Kiddopia, eSports platform Nodwin Gaming, gaming platform World Cup Cricket, fantasy sports platform HalaPlay, and sports news platform Sportskeeda

Kiddopia is a subscription-based app, which caters primarily to children in the age group of 2-6 years and is COPPA Certified by KidSAFE. Through gamification, the app delivers an immersive, self-directed learning experience for subscribers on a number of subjects, ranging from mathematics, languages, and general knowledge to developing social, creativity, and self-expression skills, all through fun and intuitive gameplay with stunning visuals. Nazara owns 50.9% of Paper Boat Apps, which owns Kiddopia.

Nodwin Gaming is South Asia’s leading eSports company. It makes the best eSports tournaments and events in the region across games and brings gamers together with engaging content from national and international tournaments. With a dynamic outlook of the eSports ecosystem, Nodwin Gaming aims at building a sustainable framework for professional gamers, content creators, organizations, and the ever-loving audience. Nazara held 57.05% in Nodwin Gaming which got diluted following a recent transaction with South Korean gaming company Krafton.

WCC3 is a next-gen sequel to the World’s No 1 mobile cricket game – World Cricket Championship 2 (WCC2), the most downloaded and awarded game. WCC3 takes the excitement of realism in mobile cricket a notch higher with cutting-edge gameplay features, brand new controls, multiplayer features, professional commentary, exciting animations, real-time motion capture of professional cricketers, and advanced AI. WCC3 is a brand new way to play mobile cricket. The game is owned by Nextwave in which Nazara holds a 52.38% stake.

HalaPlay is a daily fantasy sports (DFS) platform that empowers serious and casual sports enthusiasts to play cash-based quick, simple, and interesting games. DFS is the shortest and quickest version of fantasy sports where
users can create a team, enter leagues and win cash prizes at the end of every game. Nazara holds 69.09% stake in HalaPlay.

Sportskeeda connects fans, pundits, and athletes from all over the world. The platform provides sports entertainment in its purest and most exciting form. It offers trending stories from all over the world, high-quality reports, and features with sports humor & satire. Nazara's holding in Sportskeeda's parent company Absolute Sports is 63.9%.

Nazara reported a net loss of Rs 6.9 crore on a revenue of Rs 200.5 crore in H1 FY21. The company's operating profit was Rs 6.1 crore. In FY20, the company had reported a net loss of Rs 21.3 crore on revenue of Rs 247.5 crore and an EBITDA loss of Rs 5.6 crore.

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