Rakesh Jhunjhunwala-Backed Nazara Technologies’ Stock Gains As FY21 Revenue Surges
An attendee plays the “Mario Kart 8 Deluxe” video game on a Nintendo Co. Switch game console during an unveiling event in Tokyo, Japan. (Photographer: Kiyoshi Ota/Bloomberg)

Rakesh Jhunjhunwala-Backed Nazara Technologies’ Stock Gains As FY21 Revenue Surges

Shares of Nazara Technologies Ltd. gained after the Indian gaming and diversified sports platform reported a surge in revenue and operating income in the fiscal ended March.

The company, with businesses across gamified learning, e-sports, Freemium and telco subscription, saw its revenue rise 84% over the preceding fiscal to Rs 454.2 crore in FY21, it said in a quarterly business update released on the stock exchanges. Nazara’s earnings before interest, tax, depreciation and amortisation jumped close to six fold over FY20.

  • The 820% and 102% surge in gamified learning and e-sports segments, which contribute 39% and 37%, respectively, to Nazara’s overall revenue, aided the overall top line, the company said.

  • Its acquisition of Kiddopia, a learning application for kids, saw its paying subscribers jump nearly three times to 3.4 lakh as of March 2021.

  • Sportskeeda witnessed 487% growth in monthly active users in FY21. During the peak cricket season (October 2020), Sportskeeda recorded 68.44 million monthly active users, up from 10.53 million in April 2020.

  • Its another e-sports properties Nodwin reported a 75% year-on-year rise in revenue in FY21.

  • Revenue of Freemium, which hosts a cricket simulation game franchise on mobile—World Cricket Championship, remained flat in FY21 on account of a “drop in advertising rates in India due to Covid-19”, the company said.

  • Nazara’s telecom operator-driven subscription business also declined 8% in FY21, primarily due to a decline in India revenue in the second half of the fiscal.

The company said its real money gaming segment witnessed disruption in FY21 on account of lack of live matches in the first half of FY21 and regulatory turbulence triggered by legislative ordinances passed in few of the large states banning real money gaming operations.

The lack of stability in regulatory framework led to Nazara taking strategically cautious approach in this vertical till further clarity emerges. We have therefore pivoted to a product driven growth strategy versus an aggressive customer acquisition spends led strategy.
Nazara's Exchange Filing

Nazara said it will prioritise growth over profit maximisation at this stage so that it can achieve and maintain market leadership in the segments it operates in.

Shares of Nazara rallied as much as 9.8% to Rs 1,768 in early trade, before paring gains. Shares of the company, which listed on March 30, are up more than 50% from the IPO price of Rs 1,101 apiece. The Rakesh Jhunjhunwala-backed firm’s Rs 583-crore initial public offer is the second-most subscribed issue so far in 2021.

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