Target: ₹1,400
CMP: ₹1,106.95
is well-positioned to benefit from the rapidly-expanding global and India gaming markets. India, despite being the second-largest (500Mn+) gamers’ base, remains under-monetised; In-App Purchases (IAP) conversion being less than 3 per cent and Average Revenue Per User (ARPU) of $8–9 as compared with $17–18 in China.
These offer significant upside as structural tailwinds (digital payments, 5G, Gen Z engagement) drive monetisation.
Nazara’s global pivot, through acquisitions, such as Fusebox and ZeptoLab IPs, enhances exposure to high-ARPU markets, while leveraging cost-efficient Indian development and hybrid monetisation models. With IAP mix expected to rise, from 19 per cent to about 35 per cent by FY28E, and freemium business registering double-digit growth, Nazara stands to scale up rapidly across casual, narrative and premium genres.
We initiate coverage on Nazara with a Buy rating and a 1-year forward SOTP-based TP of ₹1,400. We expect Revenue/ EBITDA to expand at a CAGR of 30.7/44.5 per cent over FY25-FY28E, driven by gaming-first focus and ramp-up of recent acquisitions.
Key risks: Regulatory headwinds in RMG, sub-scale presence beyond Nodwin and weak/ underperforming IPs impacting overall engagement and profitability