Stocks To Buy: Gaming Stock That Has The Potential To Give 76% Returns

Prabhudas Lilladher has suggested buying the stock Nazara Technologies with a price target of Rs 1012 on the stock in its latest report on the media and entertainment segment. The shares of the company are currently quoting at Rs 575, thus leaving a potential upside of 76% from current levels.

Why Prabhudas Lilladher has a buy on the stock of Nazara Technologies

According to the brokerage headwinds in Kiddopia have subsided due to price hike undertaken earlier and we expect subscriber losses to be arrested. Top-line is expected to grow 58.7% YoY, due to consolidation impact of WildWorks and DataWrkz. "We expect EBITDA margin of 9.4% during the quarter," the brokerage has said.

Top line to increase sharply

Prabhudas Lilladher expects Nazara's top-line to increase 59% YoY on account of consolidation of WildWorks and DataWrkz coupled with strong growth in Esports segment. "Further, headwinds in Kiddopia have subsided and we expect subscriber base to remain flattish on sequential basis. We expect EBITDA/PAT margin of 9.4%/3.4% respectively. We retain 'BUY' on Nazara with a DCF based target price of Rs 1,012," the brokerage has said.

Ad environment remains soft

Meanwhile, the brokerage report on the media industry by Prabhudas Lilladher also highlight the fact that backed by festivities and decent content performance (4 movies crossed the Rs1bn barrier coupled with a lot of fillers like Vikram Vedha, Black Panther, Black Adam, Godfather etc) multiplexes would report sequential improvement in performance. However, footfall recovery is still lagging pre-COVID base and we expect a shortfall of ~17%/9% for PVR/Inox respectively. On broadcasting side, ad-environment continues to remain soft and we expect ZEEL to report 6.0% YoY decline in domestic ad-revenue with EBITDA margin of 15.1%, due to continued investment in content. The brokerage has a buy on the stocks of Zee Entertainment, Inox and PVR.

Disclaimer

The stock has been picked from the brokerage report of Prabhudas Lilladher. Greynium Information Technologies, the Author, and the respective Brokerage Houses are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.