This Rakesh Jhunjhunwala-backed gaming stock hits 20% upper circuit on healthy Q1 numbers – check latest price target

Rakesh Jhunjhunwala, Nazara Technoligies: Gaming and technology company – Nazara Technologies shares were locked at an upper circuit of 20 per cent to Rs 636.15 per share on the BSE intraday on Monday post reporting double-digit numbers in top line as well as in bottom lines during the first quarter of the financial year 2022-23 (Q1FY23). 

Nazara Technologies is one of the portfolio stocks of billionaire investor Rakesh Jhunjhunwala, who holds around 6,588,620 equity shares or 10 per cent stakes in the company, along with his wife Rekha Jhunjhunwala, a June shareholding pattern of the company is available on the BSE showed. 

Rakesh Jhunjhunwala, who is also called as Big Bull of the Indian stock market, along with associates publicly holds 32 stocks with a net worth of over Rs 31,154.3 crore as of August 1, 2022, according to the stock analysis website trendlyne.com. 

The company reported over 22 per cent year-on-year (YoY) growth in consolidated net profit to Rs 16.5 crore in Q1FY23, while its revenue soared 70 per cent YoY to Rs 223.1 crore from Rs 131.2 crore in the year-ago period, as per the exchange filing. 

Nazara Tech’s 1QFY23 reported strong revenue growth, ahead of its pre-quarter guidance and above JM Financial’s estimates.  

While FY23 reported growth will be optically high due to acquisitions, JM Financial remains circumspect of the company’s medium-term growth prospects. Barring eSports, it finds difficult to string a coherent growth strategy from Nazara’s diverse, often disparate, assets.  

Besides, the brokerage’s conservative view also stems from the company’s limited presence in real money gaming (RMG), the largest revenue pool in India’s online gaming space. JM Financial retained a Hold rating with a revised target of Rs 540 from Rs 535 earlier. 

Despite hitting an upper circuit, the stock is trading at a discount of 62 per cent from its 52-week high of Rs 1,677.2 per share, touched on October 11, 2021. The counter has slumped over 47 per cent year-to-date as compared to over a 2 per cent decline in S&P BSE Sensex in YTD.