Nazara Technologies Upgraded to Buy: Target Price of Rs 319 by Prabhudas Lilladher

Nazara Technologies Sees Improved FY27E EPS Estimate Following Acquisition of Blue Tile Games

In a recent research report, Prabhudas Lilladher has increased its estimated earnings per share (EPS) for Nazara Technologies by 34% for the fiscal year 2027 (FY27E). This upward revision is a direct result of factoring in the consolidation impact arising from the acquisition of Blue Tile (BT) Games. The research firm had initially expected the acquisition to be consolidated for a period of 9 months, but now expects it to be consolidated for 12 months.

Nazara Technologies' Operational Performance Exceeds Estimates

Nazara Technologies' (NAZARA IN) operational performance was better than expected, with an EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) margin of 19.5% in the latest period. This improvement was led by the strong performance of Curve Digital and Fusebox. Additionally, the company's profit after tax (PAT) was aided by a one-time revaluation gain of Rs310 million in Rusk Media. The acquisition of BT Games is expected to be a game-changer for NAZARA IN, as it provides a material scale advantage without compromising on margins.

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Acquisition of BT Games: A Strategic Move

The acquisition of BT Games lends a significant scale advantage to NAZARA IN, with BT Games reporting an EBITDA margin of 18.1% in calendar year 2025. Furthermore, the performance-linked earn-out structure of the transaction brings in accountability and minimizes upfront capital drain. This strategic move is expected to drive growth and profitability for the company.

Outlook: Robust Revenue Growth and Improved Margins

Led by the acquisition of BT Games, Prabhudas Lilladher expects Nazara Technologies to achieve a revenue compound annual growth rate (CAGR) of 47% over FY26-FY28E. The research firm also expects the company's EBITDA margin to improve to 16.2% in FY27E and 16.8% in FY28E. Given these projections, Prabhudas Lilladher maintains a BUY recommendation on the stock with a stock price target (SoTP) of Rs319.

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