Buy The Dip Or Stay Away? Here’s What Retail Investors Should Know
The company’s shares have fallen about 20% in September, as investors react to new gaming restrictions, steep GST levies, and shrinking promoter stake.
Shares of Nazara Technologies have come under pressure, falling approximately 20% in September 2025 when regulatory changes hit the gaming sector.
The company remains the only listed pure-play gaming stock in India, operating in a fast-evolving industry with nearly 1,900 domestic players.
Positives
According to SEBI-registered investment advisor Wealth Wishers, the company benefits from a diversified ecosystem, significant global presence, and a user-centric approach.
A debt-free balance sheet and strong cash reserves provide a cushion against shocks. The advisor also noted the long-term potential in developing proprietary IPs.
Risks
The advisor flagged regulatory headwinds, including the new online gaming bill that restricts real-money gaming and the impact on its ₹900 crore PokerBaazi acquisition. High goods and services tax (GST) rates of 28–40% applied on revenues are also eroding margins, despite 80% of revenue coming from overseas.
Other concerns include equity dilution from a rising share base, a decline in promoter holding from 19.17% in 2020 to 8.3% in 2025, high expenses of ₹1,700 crore against revenues, and operational complexity from over-diversification.
Fundamental View
From FY21 to FY25, revenues grew from ₹200 crore to ₹1,800 crore, while expenses rose from ₹135 crore to ₹1,700 crore.
The advisor noted that despite strong growth, working capital efficiency remains a challenge due to high debtor days.
Shareholding Developments
Wealth Wishers pointed out that promoters have significantly reduced their stake, while notable investors, Rakesh Jhunjhunwala’s family, have exited.
Institutional names like Nithin Kamath and Madhu Kela remain invested.
Analyst View
Wealth Wishers said Nazara is a high-potential but high-risk play in the gaming sector.
The stock could deliver significant upside if regulatory clarity emerges and IPs succeed in scaling, but it continues to carry high volatility and margin pressures.
What Is The Retail Mood?
On Stocktwits, retail sentiment was ‘neutral’ amid ‘normal’ message volume.
Nazara’s stock has risen 9.2% so far in 2025.
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