Shares of Rakesh Jhunjhunwala-backed Nazara Technologies soared nearly 19 percent on Monday after the company reported a strong set of earnings for the June quarter with a 22 percent rise in consolidated net profit to Rs 16.5 crore.

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The stock of the mobile gaming company was trading 18.99 percent higher at Rs 630 per share on BSE at the time of writing. In the last one month, the stock has fallen 1.94 percent while it has declined 44.53 percent in the year so far. It has underperformed the Sensex by 41.88 percent in the last one year.

Total revenue for the company stood at Rs 223.1 crore, a 70 percent growth from Rs 131.2 crore in the corresponding period last year.

The earnings before interest, taxes, depreciation and amortization (EBITDA), a measure of the company’s overall financial performance, increased 102 percent year-on-year and stood at Rs 30 crore for the April-June quarter. The EBITDA margin, meanwhile, contracted to 13.5 percent.

In a regulatory filing, the company noted that e-Sports contributed the most to the growth. The revenue for e-sports for the quarter stood at Rs 102.3 crore, up 92 percent from Rs 53 crore in the corresponding period a year ago.

For the rest of FY23, the management remains confident of meeting its growth plans. "The company will continue their growth journey both organically and inorganically. We want to augment our presence in the 'Freemium' segment, especially in developed markets, going ahead in this fiscal year," said Mohit Agarwal, CEO of Nazara Technologies.

Also read: Nazara Tech surges 6% after JM Financial says eSports biz to drive company’s near-term growth

In June, domestic research and brokerage firm JM Financial Services initiated coverage on Nazara Technologies, saying that its valuation is ‘rich’. The brokerage has a ‘hold’ rating on the stock with a target price of Rs 1,070, a 5 percent upside from the current level.

According to the brokerage firm, Nazara Tech’s partnership with global eSports platforms, game publishers and brands position it uniquely to lead eSport penetration in India. It also expects eSports to continue to drive the company’s growth over the near term, aided by recent acquisitions.

Currently, Nazara Technologies is 66 percent far from touching its 52-week high of Rs 1,601.

First Published:Aug 1, 2022 3:11 PM IST