27% Down or 28% Up? Brokerages are Divided on this Rakesh Jhunjhunwala Stock

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27% Down or 28% Up? Brokerages are Divided on this Rakesh Jhunjhunwala Stock

By Aditya Raghunath

Investing.com -- Nazara Technologies Ltd (NS: NAZA ), one of India’s largest gaming companies and a stock where ace investor Rakesh Jhunjhunwala owns a 10.82% stake, has divided brokerages on its potential.

Foreign brokerage CLSA said, “Nazara's balance sheet has net cash of Rs 480 crore in FY21, but the promoter ownership is low at 21%. We forecast a 35-73% CAGR (compound annual growth rate) by FY24CL, but with consolidated revenue and EBITDA (earnings before interest, tax, depreciation and amortization) at Rs 850-170 crore/$117-23 million by FY23CL. The stock valuation is expensive at 6x FY23CL EV/sales and 29x EV/EBITDA,” said a CLSA report.

CLSA has given a sell recommendation on Nazara with a target price of Rs 1,095. This is almost 27% lower than its Friday closing price of Rs 1,515. The stock fell 8.87% or Rs 147 today. The target price is even lower than Nazara’s IPO issue price of Rs 1,101.

However, a Mint report quoted Sandep Matta of TRADEIT Investment Advisors who said, “The company is trading expensive with low promoter’s holding and operating at low ROE, we recommend buy on SIP mode in the counter for the target of Rs 1800 to Rs 1950 in 6 to 9 month time-frame with stop loss of Rs 1350.”

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