NAZARA technologies ltd

### **Comprehensive Analysis of Nazara Technologies Ltd (NSE: NAZARA)**

#### **1. Fundamental Analysis:**

**Overview:**
Nazara Technologies Ltd is a leading gaming and sports media platform in India with a presence in mobile gaming, esports, and sports media. It has a diversified portfolio, including mobile games like *World Cricket Championship* and *Kiddopia*, as well as esports through *Nodwin Gaming* and *Sportskeeda*.

**Key Financials (as of latest available data):**
- **Market Capitalization**: ₹8,094 crore (~₹919 per share as of Feb 2025)
- **Revenue Growth**: Nazara has shown solid growth, primarily driven by acquisitions in gaming, esports, and sports media sectors.
- **Profitability**: While the company has posted some losses in past quarters, it is focusing heavily on scaling its operations through aggressive acquisitions. Investors should monitor for consistent revenue growth and improved margins over the long term.
- **P/E Ratio**: Nazara trades at a higher-than-average P/E ratio compared to industry peers, reflecting high market expectations for future growth.

**Recent Developments:**
- **Acquisitions**: Nazara has strengthened its portfolio by acquiring *Fusebox Games* for $27.2 million and a stake in *PokerBaazi's* parent company, *Moonshine Technology*. These moves are aligned with the company's strategy to gain a bigger footprint in the online gaming and esports space.
- **Strong Industry Growth**: The Indian gaming and esports market is expected to grow rapidly, providing significant upside potential for companies like Nazara. This makes the long-term outlook favorable, although short-term volatility is expected.

**Key Strengths:**
- Diversified gaming portfolio (mobile, esports, media)
- Strong presence in the rapidly growing Indian gaming market
- Aggressive expansion through acquisitions
- Growth prospects in international markets

**Risks:**
- Volatility in earnings, particularly due to the company’s investment strategy
- Increased competition from other gaming giants and local players like Dream11 and MPL
- Regulatory risks associated with online gaming and esports

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#### **2. Technical Analysis:**

**Current Price Action (as of February 2025):**
- **Stock Price**: ₹919
- **52-week High/Low**: ₹1,384 (High) – ₹713 (Low)
- **Recent Trend**: Nazara’s stock has shown significant volatility in the past year. After hitting a 52-week high in 2024, it has retraced and consolidated at lower levels, creating a sideways pattern in the short-term. This could signal a potential breakout or further correction depending on market conditions.

**Moving Averages:**
- **50-Day Moving Average (50-DMA)**: ₹935
- **200-Day Moving Average (200-DMA)**: ₹1,070
- The stock is currently below both its 50-day and 200-day moving averages, which suggests it is in a short-to-medium-term downtrend. A breakout above the 50-DMA could signal a potential reversal or upward momentum.

**Relative Strength Index (RSI):**
- RSI is at **42**, which indicates that the stock is neither overbought nor oversold. An RSI below 30 would suggest the stock is oversold, while an RSI above 70 indicates it is overbought. With the current RSI level, there is room for both upward and downward price action.

**MACD (Moving Average Convergence Divergence):**
- The MACD line is currently below the signal line, indicating bearish momentum. However, any crossing of the MACD above the signal line could indicate a bullish reversal.

**Volume Analysis:**
- The volume has been consistent but tends to spike during significant price moves. Volume analysis will be crucial in confirming price movements (up or down).

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#### **3. Support and Resistance Levels:**

**Support Levels:**
- **₹710-725**: This range has proven to be a strong support zone in the past, as the stock tested this level during its recent decline. A breakdown below this range could lead to further declines.
- **₹780**: A secondary support level exists around ₹780, which would act as a mild support if the stock continues to test downward levels.

**Resistance Levels:**
- **₹980-1,000**: The stock faces strong resistance around ₹980-1,000. A breakout above ₹1,000 could signal the start of an uptrend, especially if the stock crosses above its 50-DMA and stays above it.
- **₹1,080**: This level has acted as resistance multiple times in the past and will be key to monitor for any bullish breakouts.

**Key Levels to Watch for Short-Term Movement:**
- **Immediate Resistance**: ₹950 (50-DMA)
- **Immediate Support**: ₹725 (Recent low)

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#### **4. Risk and Reward Outlook:**

**Risk Factors:**
- Short-term volatility is high due to the company's ongoing growth and acquisitions. The stock may see continued fluctuations, which could lead to drawdowns for investors.
- Competition and regulatory challenges in the gaming sector could affect growth and profitability.

**Reward Potential:**
- Nazara has strong potential for long-term growth, especially if the Indian gaming and esports markets continue to expand at their current rate.
- The company's acquisition strategy, including global expansion, adds a layer of upside potential.

#### **5. Investment :**

- **Long-Term Investors**: If you're a long-term investor, Nazara’s growth story in the Indian gaming and esports industry makes it a compelling option. However, be aware of potential volatility in the short term due to high valuation and fluctuating profitability.

- **Short-Term Traders**: For traders, wait for a breakout above **₹950-980** to enter for a potential move toward **₹1,080** or higher. A breakdown below **₹725** could trigger a bearish move, so be cautious.

**Conclusion:**
Nazara Technologies has strong growth potential in a booming sector but comes with a degree of risk due to the volatility in stock price, competition, and regulatory uncertainty. Technically, the stock shows some bearish tendencies in the short term but offers significant upside potential in the longer term if the gaming and esports market continues to grow.

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