Nazara Tech shares plunge 28% in 4 days, breach brokerage target. What’s ahead?

Shares of Nazara Technologies extended their losing streak on Monday, plunging 12% in today’s session alone to hit an intraday low of Rs 1,014.75 on the BSE, marking a total decline of 27.6% across four trading sessions.

The sharp correction was triggered after the Union Cabinet approved the Promotion and Regulation of Online Gaming Bill, 2025, which proposes strict regulations on digital gaming platforms, including a potential ban on real-money gaming (RMG).

Here’s a look at the timeline:

What sparked the decline?

The first leg of the sell-off began on August 20, when the Cabinet cleared the bill aimed at regulating online gaming platforms. The proposed legislation seeks to address concerns around mental health issues, money laundering, and fraudulent financial transactions in the gaming ecosystem.

It introduces provisions such as the criminalisation of digital betting, restrictions on monetary transactions for RMG, and prohibition of advertising and promotion of real-money games across media platforms. The framework also empowers MeitY to regulate illegal platforms and establishes a national authority to promote competitive gaming.

Given Nazara’s exposure to the real-money gaming space through its stake in Moonshine Technology (PokerBaazi), investor concerns mounted. While most other verticals of the company — such as gamified early learning, publishing, and esports — remain unaffected, the possibility of an earnings impact weighed heavily on the stock.

ICICI Securities’ downgrade adds pressure

Amid the sharp fall, domestic brokerage firm ICICI Securities downgraded Nazara Technologies to ‘Reduce’ (from Add) and slashed its target price to Rs 1,110 from Rs 1,500 earlier, citing regulatory overhang.

In its note, the brokerage stated: “In our view, the implementation of the bill would essentially make online Real Money Gaming infeasible in India… Given the ban on RMG, we now cut this to zero.”

The report added that while other business segments remain intact, the valuation cut was necessary given the risks. ICICI Securities said: “Thus, we downgrade Nazara Technologies to REDUCE with a revised target price of INR 1,100, valuing the company using the SoTP framework.”

Notably, the stock had already breached this revised target in Friday’s session.

What should investors do now?

With the stock falling below the revised brokerage target and regulatory uncertainty clouding the earnings outlook, investors are left with difficult choices.

Nazara Technologies remains under pressure, currently trading near Rs 1,031, after the government passed the Online Gaming Bill, 2025, banning real-money games. Its associate Moonshine (PokerBaazi operator) had to suspend operations, sparking investor concerns over potential revenue impact.

While management has clarified that the earnings impact will be minimal, negative sentiment has dominated, leading to heavy selling. From its recent high, the stock has already corrected more than 29%.

On the weekly chart, the stock is trading below its 20- and 50-EMA, highlighting sustained bearish momentum.

“The stock is now approaching its 100 EMA at Rs 997.8, which is expected to act as the first immediate support, while the 200 EMA around Rs 900 is the second key support zone. Any reversal signals near these levels could provide a medium-term buying opportunity for investors willing to take a contrarian stance,” said Mandar Bhojane, Senior Technical & Derivatives Analyst at Choice Broking.

Momentum indicators remain weak, with RSI at 40 trending downward, suggesting further bearish pressure, while the MACD has given a negative crossover, confirming ongoing weakness.

He advises traders and investors to remain cautious and wait for clear reversal signals near the 100–200 EMA levels before initiating fresh positions.

“Sustained trading above Rs 1,050 will be the first sign of strength, whereas a breakdown below Rs 900 may invite deeper correction,” he added.

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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)