Rakesh Jhunjhunwala portfolio: Analysts bullish on this tech stock
Premium- The brokerage firm IIFL has initiated coverage on the Rakesh Jhunjhunwala portfolio stock with an Add rating
Shares of Nazara Technologies have declined about 30% in 2022 (year-to-date or YTD) so far with falling 19% in the last one month. Though, brokerage house IIFL has initiated covering on the gaming stock and sees upside from current levels as it believes Nazara’s ability to acquire and scale companies in the gaming ecosystem should drive value creation.
Analysts at IIFL see Nazara as a key beneficiary of the under-penetrated, high-growth, gaming & allied markets in India. They believe Nazara would continue to acquire and scale up assets led by its strong relationships, in-house content and technology stack, which are creating a network effect and economies of scale, leading to global expansion and increase in monetisation.
The brokerage firm has initiated coverage on Nazara Technologies shares with an Add rating and 12-month SoTP-based target price of ₹2,000 apiece, valuing assets based on their growth profile, market potential and comparable peer valuations.
“Nazara’s competitive advantage comes from its diverse portfolio of gaming, e-learning and ad-tech assets, which have created an ecosystem across multiple markets that help them scale up through proprietary tech, relationships with ecosystem partners and inhouse content. Hence, Nazara is better positioned vs. local market peers," the note added.
While Nazara’s valuations are rich as compared to global peers’, the long runway for growth and the only way to play the under penetration story in India-gaming may safeguard the premium valuations, in IIFL's view. “Given the high growth trajectory and potential to capture the underpenetrated gaming market, we believe the stock will command premium valuations."
As per BSE shareholding pattern, Indian ace investor and stock market trader Rakesh Jhunjhunwala owns 10.10% stake in the gaming tech company as of December 2021.
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The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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