Communication Services — Electronic Gaming & Multimedia · NSE
₹419.00+₹12.30 (+3.02%)
DalalBaazaar Score
41 / 100
🟡 Moderate
Verdict
CAUTION
Risk
High
Driven by high debt relative to equity, the company is currently loss-making, small-cap size, which brings sharper price swings.
In simple words: The company is currently losing money, but sales are shrinking. Debt is the main factor to watch.
Decision support, not a buy or sell call.
As of 18 Oct 2026, 6:10 pm
Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.
The 60-second version of Nazara Technologies Limited — what it does, how it earns, and who it competes with, before any of the numbers below.
What does this company do?
Nazara Technologies Limited operates a gaming and sports media platform in India, Africa, the Middle East, the Asia Pacific, the United States, and internationally. It operates through Gaming, eSports, and Ad tech segments.
IndustryElectronic Gaming & Multimedia
SectorCommunication Services
Employees76
Annual revenue₹1,829 Cr
How does it make money?
Turns over ₹1,829 Cr a year. Of every ₹100 of sales, about ₹5 reaches shareholders as profit, with ₹1 left at the operating level before interest, tax and depreciation. Each of its 76 employees supports ₹24.07 Cr of revenue a year, the signature of a capital- or asset-led business.
EBITDA margin0.5%
Net margin5.2%
Revenue / employee₹24.07 Cr
Who are its competitors?
The closest listed comparisons in its industry are BHARTI AIRTEL LIMITED, VODAFONE IDEA LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.
BHARTI AIRTEL LIMITEDP/E 39.8x · ROE 20.2%
VODAFONE IDEA LIMITEDP/E 3.6x · ROE —
What is its competitive advantage?Little sign of one
Returns on capital of 1.8% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.
ROCE1.8%
ROE2.8%
Peer median ROE20.2%
What is the outlook?
6 analysts covering the stock expect revenue to grow about 25.4% and earnings to grow about 158.7% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.
Est. revenue growth+25.4%
Est. earnings growth+158.7%
Analysts6
What has been driving growth?
Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +68% while net margin moved +45% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.
Revenue effect+68%
Margin effect+45%
DalalBaazaar Score
41/ 100
Moderate
Weighted across six categories. Every point is explained below.
✗ ROE of 2.8% is weak
Quality vs. Valuation
Company Quality
45/ 100
Average
How good the business is, ignoring the share price entirely.
vs
Valuation
20/ 100
Expensive
What you are being asked to pay, ignoring how good the business is.
A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.
vs. its own history
Not enough price and earnings history
vs. sector peers
Not enough peers with a usable P/E
vs. generic bands
N/A
No P/E — the company is lossmaking
P/E (Trailing)
Not meaningful
P/B
5.29x
EV/EBITDA
1729.8x
PEG
—
Dividend Yield
None
What's Good / What's Bad
🟢 What's Going Well2
Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.
🔴 What Needs Attention4
Margins are compressing
EBITDA margin has slipped from 11.3% to 0.5% over 3 years.
Debt is rising
Total debt is up 464% over 3 years — worth checking what it funded.
Return on capital is falling
ROCE has declined from 6.8% to 1.8% — often a sign of competition or overexpansion.
Receivables growing faster than sales
Receivables are up 102% against revenue growth of 68% — customers are taking longer to pay.
Red Flags
6 items require attention · 3 high · 3 watch
🔴Debt has risen sharplyFinancial
Total debt is up 464% over 3 years, from ₹38 Cr to ₹215 Cr.
🔴High leverageFinancial
Debt/Equity of 6.05x — earnings must service borrowings before shareholders see anything.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 10.8 points, from 11.3% to 0.5%.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 8.8x to 3.0x.
🟡Receivables growing faster than salesFinancial
Receivables up 102% against revenue up 68% — sales are being booked faster than they are collected.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 40% over 3 years — each existing share owns a smaller slice of the company.
Investment Thesis
🟢 Bull CaseWhat could make this work?
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.
🔴 Bear CaseWhat could go wrong?
Margins are being competed away
EBITDA margin has fallen from 11.3% to 0.5%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The debt load needs earnings to hold up
Debt is 21.7x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Sales are being booked faster than collected
Receivables are up 102% against revenue up 68%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Size brings its own risk
Small Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.
Several serious flags at once
3 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.
🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today
1Revenue growth stays above 14% a year✓ 18.8% CAGR
Latest reported year was -14.0%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above -1%✓ 0.5%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 21.7x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
4Interest cover stays above 3x✓ 3.0x
How much operating profit can fall before interest stops being comfortably covered.
5Free cash flow remains positive✓ ₹36 Cr
Profit that never becomes cash eventually stops being profit.
Investment Checklist
6 / 12 checks passed
✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✗ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✗ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✓ Short-term technical trend isn't bearish
Price history
Quick Metrics
2 good · 2 neutral · 7 weak
Market Cap
₹17,119 Cr
Small Cap
Smaller company — thin liquidity and deep drawdowns are normal here
P/E (Trailing)
Not meaningful
Loss-making
Earnings are negative, so a P/E multiple can't be read here
P/B Ratio
5.29x
Rich
Steep premium to book — needs high, durable returns to justify
EPS (TTM)
₹-1.46
Loss-making
Negative earnings per share — the business is losing money
ROE
2.8%
Weak
Weak capital efficiency
ROCE
1.8%
Weak
Low return on total capital employed
Debt/Equity
6.05x
High
High leverage
Revenue Growth (YoY)
-14.0%
Shrinking
Sales are contracting
Profit Growth (YoY)
26.4%
Healthy
Profits growing at a healthy clip
Dividend Yield
None
None
No dividend yield reported — usually means no payout, but verify if one was recently initiated
Free Cash Flow
₹36 Cr
Cash generative
Generates cash even after funding its capex
More Metrics
CMP
₹419
P/E (Forward)
65.3x
Operating Margin
-0.3%
Weak
Thin margins leave little room for error
Net Margin
-1.3%
Weak
Very little revenue reaches the bottom line
Current Ratio
2.05
Comfortable
Healthy short-term liquidity
Beta (vs Nifty)
0.23
Defensive
Steadier than the market
52W Range Position
100%
Near high
Near its 52-week high
Technical Snapshot
SMA 20 / SMA 50
385.5 / 370.5
Bullish alignment (short > long)
Price vs SMA 200
Above
Long-term uptrend
RSI (14)
74.2
Overbought zone
Financial Trend (4-Year)
Metric
FY23
FY24
FY25
FY26
3Y CAGR
Revenue
₹1,091 Cr
₹1,138 Cr
₹1,624 Cr
₹1,829 Cr
+18.8%
EBITDA
₹124 Cr
₹167 Cr
₹204 Cr
₹10 Cr
-56.9%
EBITDA Margin
11.3%
14.6%
12.6%
0.5%
—
PAT (Net Profit)
₹39 Cr
₹57 Cr
₹76 Cr
₹96 Cr
+34.5%
EPS
₹1.49
₹2.04
₹2.37
₹2.62
+20.7%
ROE
3.6%
2.8%
2.6%
2.8%
—
ROCE
6.8%
4.6%
2.5%
1.8%
—
Total Debt
₹38 Cr
₹28 Cr
₹219 Cr
₹215 Cr
+78.0%
Free Cash Flow
-₹0 Cr
₹64 Cr
-₹82 Cr
₹36 Cr
—
🟢 Revenue has grown at 18.8% a year over 3 years.
🔴 EBITDA has shrunk at 56.9% a year over 3 years.
🔴 EBITDA Margin has fallen from 11.3% to 0.5% over 3 years (-10.8 pts).
🟢 PAT (Net Profit) has grown at 34.5% a year over 3 years.
🟢 EPS has grown at 20.7% a year over 3 years.
🟡 ROE has held roughly flat at 2.8% over 3 years.
🔴 ROCE has fallen from 6.8% to 1.8% over 3 years (-5.0 pts).
🔴 Total Debt has grown at 78.0% a year over 3 years.
🟢 Free Cash Flow has turned positive, from -₹0 Cr to ₹36 Cr.
Revenue growth is negative (-14.0%) on the latest reported period — check if this is one-off or a trend.
Trading very close to its 52-week high — momentum-driven entries here carry more mean-reversion risk.
Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in overbought territory — momentum entries here carry more short-term pullback risk.
DalalBaazaar Thesis
🔴Business QualityWeak4.7/20
🟡Financial HealthAdequate11.3/20
🟢GrowthStrong14.9/20
🔴ProfitabilityWeak2.6/15
🔴ValuationDemanding2.6/15
🟡RiskModerate4.8/10
Unremarkable in both directions
A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 3 high-severity red flags sit above this conclusion and should be read first.
