Nazara Tech: What’s The Expansion Plans Of Gaming & E-Sports Industry Trends In Future? | ET Now

Welcome on board Nitish Mithasen as well the joint MD and CEO at Nazara Technologies joining in on the show right now. Nitish. Hi, morning. Good to have you on the show. You know, let's first talk about the GST meeting, which happened over the weekend, but the outcome wasn't quite favourable or I would say neutral for the gaming industry. What are your views and by by where is it that you expect some clarity to come by? I think it is you know in the next GST meeting, hopefully this matter of gaming will be taken over and we are as an industry very hopeful that a positive view and a constructive supportive view will be taken for the industry. I think with the gaming industry, a portrait in India remains very large. India can become a global player in this space and in our past interactions, we have also seen that the government is supportive of it. So we are all hopeful that there will be positive outcome. Nitish, what are the key industry trends you're observing in gaming right now and esports Also, Do you see the competitive landscape evolving because so many gaming startups are emerging everywhere? See, India is in a very interesting space when it comes to gaming. We have 500 million gamers today and in the world we have the fastest number of paying users every month we are adding. So in the next three to five years, the size of revenues of the Indian gaming industry is going to increase significantly. Today Nazara is a market leader in that space. We are the only listed gaming company and we are working with lot of developers in India, investing in lot of developers in India. So there is whole ecosystem becomes very strong and we as a country are able to compete globally and become a gaming nation of the world. So I think lot of growth potential and we all stakeholders, whether it's a private companies, whether it is developers, whether it is government, if we all come together, there's a big opportunity ahead of us to take advantage of. And Nitish. The company also announced the Made in India 4G Domination mobile game in partnership with Encore. What is the timeline? What is the outlook when it comes to demographics? Make in India gaming is a big opportunity because till now most of the popular games have been games, you know which are made internationally. But Indian culture, contextual localized gaming will eventually become very large and this is one step towards that. 4G is a action shooting game which we think will be very popular in India. It is a Made in India game and Mazara Publishing, which is a publishing arm, is bringing this game to millions of users. So we think it should be very successful and our players should love it. We are going to hopefully launch it in the next two months and we will be anticipating, you know, good clear response. We will be able to update you more about how the customers have reacted, how the financial performance is there once the game is launched. You know, talking about esports segment, Nordwin has made five acquisitions in FI 24 and outlook on esports segment and revenue targets is something that we would want to understand from you. Esports is one of our critical or main areas of business. It is a very fast growing business and Nazara along with Nordwin is the market leader in this space with over 80% market share. So we will continue to invest aggressively in it. We will continue to also acquire more companies in it because this is allowing us to access the youth. Today, the attention of the youth is not easy to get. And through this medium of esports, we are able to you know grab the attention of the youth, which we believe is very powerful asset to have. So we are very excited about our esports strategy. It's think of it more like the pipe to the youth and we will continue to build it. We're also hopeful that in the current potential year, we will see very good growth in that segment. This show. Sports Kita has recently acquired assets of soapcentral.co. What are your plans there and are you looking for further similar acquisitions or any other field in order to expand across geographies? Sports Kita has been a very successful venture for us today with nearly 100 million monthly active users. It's a profitable company generating good cash flow. They have made acquisition last year in the US called Pro Football Network, which was very successful. Recently, they announced the acquisition of Soap Central, which which allows them to enter the entertainment space, which is even bigger than the sports space and replicate their strategy and playbook in that category. So I think they are in a very good position and they're also continuing to look at more acquisitions to grow from a geographical perspective, the Indian market and the US market, our core focus areas for sports guitar. And the company has also said that FY24 was a reset for Dataworks. Your ad tech business, what's the game plan? How do you see it growing? So ad tech business, while FY24 was a slow year for the ad tech business, both through organic growth as well as acquisitions, we expect that in FY25 the ad tech business will grow much faster both in terms of revenues and profits as compared to FY24. Also, that tech business has a lot of synergies with many of the other businesses of our company, which includes user acquisition for the games that we develop, monetization through advertising. So there are several other benefits also that are accruing to us. So overall, we are very positive about this business and this year we should at least grow by 30% in that tech business, right? Your EBITDA margin that's also been fluctuating over the years. What levels do you see it sustainable at? So if you see our FY24 EBITDA margin was approximately 110 basis points higher than FY23 and we expect that in FY25 again we will post a higher EBITDA margin. So our objective is that every year while we grow our revenues, you want to increase our EBITDA margins, not only EBITDA margins. We have a strong focus on cash flow. And if you see our FY24 numbers, we did more operating cash flow as compared to EBITDA. I think our EBITDA was about 1/28 crores whereas our cash flow was around 131 crores. So I think we are generating free cash, which then allows us to deploy it in organic business as well as acquisitions. So I think we will continue to focus on improving EBITDA margins as well as continue to ensure that the company generates strong operating cash flows. You have cash on the books right now as well any other major investments which or partnership which you have what exactly with the utilization you know going forward. So we are definitely looking at new acquisitions. As you know, the company has raised good amount of capital. We raised 950 crores in the previous year and the company has a cash balance of over 14150 crores. The company is very financially in a good position to make acquisitions and over the next few months we will surely make new announcements around acquisitions that we have made and I think that should drive stronger growth in the years to come. Alright, interesting. Thanks very much Nitish for giving us markers for growth as well as and road map as to what your levers are going to be down the line. If you like this video then like, share and subscribe to ET Now.