Best Gaming Stocks in India

29 April 2024
9 min read
Best Gaming Stocks in India
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(The stocks mentioned in the blog are as per Analyst Ratings and Market Capitalization)

India has become the biggest gaming market in the world, with 9.5 billion gaming app downloads and 568 million gamers in the past few years. This growth is fueled by advancing IT infrastructure, widespread use of mobile devices and high-speed internet connectivity. 

Moreover, the incorporation of technologies such as Augmented Reality (AR), Virtual Reality (VR) and the metaverse into console and computer games is also contributing to this expansion. With such a massive user base, it is no surprise that investors are eyeing the gaming sector for potential opportunities.

Gaming Industry in India - A Brief Overview

In recent years, the gaming industry in India has transformed significantly, with a surge in online gaming participation across the nation.

From casual gaming on mobile devices and PCs to organised esports tournaments and leagues, India is witnessing an unprecedented rise in gaming culture. This growth can be attributed to several factors, including the expansion of broadband connectivity in Tier-II and Tier-III cities, along with affordable data costs and smartphones, which have made gaming more accessible to a diverse audience.

In 2022, the Commonwealth Esports Championship marked a significant milestone, showcasing the global recognition of esports, exemplified by the Indian DOTA 2 squad's remarkable achievement of a bronze medal. By 2023, India's online gamer community surged to 442 million, making it the world's second-largest gaming user base, trailing only behind China. 

Furthermore, the Indian government has undertaken several initiatives to promote the growth of the gaming industry. It includes amendments to the Information Technology Rules of 2021 to regulate online gaming and protect gamers from harmful content and addiction. Additionally, the establishment of the Animation, Visual Effects, Gaming, and Comics (AVGC) Promotion Task Force aims to enhance domestic capabilities and foster the growth of the AVGC sector through the creation of a National AVGC policy.

Furthermore, the government's authorisation of 100% Foreign Direct Investment (FDI) in the gaming sector presents opportunities for both domestic and foreign investors to contribute to the industry's expansion. However, the gaming market in India is estimated to reach USD 7.24 billion by 2029, driven by a CAGR of 15.68% from 2024 to 2029.

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Best Gaming Stocks in India 2024 as per Analyst Ratings

The following table highlights the best gaming stocks in India in 2024 as per BUY analyst ratings provided by the I/B/E/S databases. We have listed these stocks based on analyst ratings because stock market analysts review and rate a stock based on their in-depth market study:

S.No.

Gaming Stocks in India (as per analyst ratings)

BUY Analyst Rating (in %)

1.

Nazara Technologies

67

2.

Zensar Technologies Limited

63

3.

Tata Consultancy Services

51

4.

Infosys

48

*Our stock selection criteria for top stocks based on analyst ratings are mentioned at the bottom of this blog.

Top Gaming Stocks in India in 2024 as per Market Capitalisation

Here is a table showcasing the top gaming stocks in 2024 as per market capitalisation:

S.No.

Gaming Stocks in India (as per market capitalisation)

1.

Tata Consultancy Services

2.

Infosys

3.

Tech Mahindra

4.

Zensar Technologies Limited

5.

Nazara Technologies

*Our stock selection criteria for top stocks based on Market Capitalisation are mentioned at the bottom of this blog.

Overview of Best Gaming Stocks in India as per Analyst Ratings

Here is a summarised overview of the best gaming stocks as per analyst ratings:

1) Nazara Technologies

Nazara Technologies Limited is an Indian company that offers a wide range of gaming and sports media services. It operates in three main segments: Gaming, eSports and Ad tech. 

The gaming segment includes Kiddopia, Animal Jam, WCC3 and Classic Rummy. Nazara Technologies is involved in esports through Nodwin, PublishMe and Sportskeeda. Additionally, it offers skill-based, fantasy, and trivia games via OpenPlay, Halaplay and Qunami. It also provides digital ad tech solutions through Datawrkz. 

The company's distribution network covers approximately 52 telecom operators in 58 countries, including Africa, the Middle East and South Asia. Nazara Technologies has subsidiaries like Nazara Technologies FZ LLC, Nazara Pte Limited and Sports Unity Private Limited among others.

2) Zensar Technologies Limited

Zensar Technologies Limited is a company that provides digital solutions and technology services. It caters to various industries like healthcare and life sciences, hi-tech engineering, telecom, banking and financial services, insurance, consumer and manufacturing services. 

Zensar Technologies offers a variety of IT services and solutions across two main segments -  Digital and Application Services (DAS) and Digital Foundation Services (DFS). 

The DAS segment provides custom application management services, including development, maintenance, modernisation, support and testing across different industries and technologies. On the other hand, the DFS segment offers infrastructure management services, such as digital workspace, hybrid IT, unified IT and dynamic security services through a managed service platform utilising autonomics, automation and machine learning. 

3) Tata Consultancy Services

A subsidiary of Tata Sons Private Limited, Tata Consultancy Services Limited (TCS) is a leading provider of information technology (IT) services. These services include IoT, quality engineering, blockchain, consulting, business process outsourcing, business intelligence, cloud services, infrastructure services and enterprise solutions.

It also provides business solutions to diverse industries such as banking, financial services, insurance, media, technology, life sciences, information services, communication, healthcare, retail, manufacturing, energy, hospitality and more. TCS's software products include TCS MasterCraft, TCS Optumera, TCS OmniStore, TCS BaNCS, Jile, TCS iON, TCS TwinX, TAP, Ignio, TCS ADD, Quartz and TCS HOBS.

4) Infosys

Incorporated in 1981, Infosys Limited is a digital services and consulting company that provides technology-driven business solutions. Its services include data analytics, AI, digital workspace, digital process automation, digital marketing, cybersecurity, blockchain, salesforce, IoT, engineering, cloud services and consulting. 

These offerings are tailored to various industries, including agriculture, consumer packaged goods, aerospace and defence, communication services, high technology, automotive, healthcare, education, financial services, insurance, mining, oil and gas and life sciences.

It also caters to industries such as media and entertainment, logistics and distribution, professional services, the public sector, retail, travel, hospitality, and utilities. Infosys operates with a presence in over 56 countries and has 13 subsidiaries all over the world.

Factors to Consider Before Investing in Gaming Stocks

Before you decide to invest in gaming stocks, there are some factors you should keep in mind. These factors are as follows:

  • Evaluating New Game Ideas

Assessing the potential of new and innovative game concepts is essential. Investing in promising new ideas with good initial funding can increase the chances of commercial success and higher returns on investment.

So, keep an eye out for unique concepts that have the potential to capture the market's attention.

  • Management Quality

Before investing in gaming stocks, it is crucial to evaluate both the leadership and management teams of gaming companies and their ethical conduct. Assess the leadership team for their industry experience and track record of success.

Look for companies known for ethical practices to align investments with integrity and minimise risks.

  • Valuation

Consider the current valuation of a gaming company. Make sure it aligns with its financial performance and growth prospects. This helps you determine if the investment is justified.

  • Competition

The gaming industry in India is competitive. To succeed, you need to assess a company's competitive position compared to its peers. Look at factors like product offerings, customer base, and pricing to understand how it stacks up against the competition.

  • Regulations

When thinking about investing in the gaming industry, be mindful of regulatory and legal risks.

Changes in gaming laws or regulations can impact the industry, so it is crucial to invest in companies that are well-versed in the regulatory environment. Laws related to privacy and data protection can significantly affect the industry's revenue potential. 

  • Financial Performance

Evaluating a gaming company's financial performance is crucial. You must look at factors like revenue growth, profit margins and cash flow to identify financially stable companies with growth potential.

Should You Invest in Gaming Stocks?

Before investing in gaming stocks, understand the obstacles and risks that the Indian gaming market might face as it grows.

One big challenge is dealing with rules and regulations, especially when it comes to data privacy laws. This can be tough because India is still catching up with global standards. Moreover, the fact that software patents are not allowed makes it hard for companies to innovate, especially those making digital products. 

They need to protect their software code within the laws that already exist. Additionally, adhering to diverse compliance rules can be costly and hinder growth, particularly for new firms. Even though gaming stocks seem promising, knowing about and dealing with these challenges is crucial before investing.

The Bottom Line 

If you are planning to invest in gaming companies in India, be assured of their potential. With ample growth prospects and impressive revenue generation, now is a prime opportunity to consider investing in gaming stocks. However, research thoroughly and align your investment with your financial goals before prioritising this emerging sector.

*Stock Selection Criteria for Top Stocks Based on Analyst Rating

Investors must carefully read through the following information on stock selection criteria while running through the stocks based on analyst ratings-

These stocks have been shortlisted as per Analyst ratings provided by the I/B/E/S (The Institutional Broker’s Estimate System) database, further aggregated by Refinitiv. Ratings are determined by analysts' forecasts of company performance, taking into account metrics like earnings per share, sales, and net income. These ratings should not be construed as investment advice/recommendations/offer/solicitation of an offer to buy/sell any securities by Groww Invest Tech Pvt. Ltd. (formerly known as Nextbillion Technology Pvt. Ltd.).  

Before investing, investors must conduct independent research and not solely rely on the information provided here. This will allow investors to make appropriate investment decisions based on their financial goals, investment objectives and risk tolerance.

*Stock Selection Criteria for Top Stocks Based on Market Capitalisation

These stocks are chosen based on their market capitalization, which represents the total value of a company's outstanding shares. The selection is arranged in descending order, placing the largest companies first and the smaller ones later. This helps prioritize stocks based on their market size. 

It is important to note that market capitalization in no way guarantees a company’s performance or the returns from its stocks. However, it can be used as a criterion for shortlisting companies from within a sector. Investors should recognize that other factors, such as financial health, management efficiency, and market trends, play crucial roles in determining the actual success of an investment. 

This stock selection should not be construed as investment advice/recommendations/offer/solicitation of an offer to buy/sell any securities by Groww Invest Tech Pvt. Ltd. (formerly known as Nextbillion Technology Pvt. Ltd.).

Disclaimer: This blog is solely for educational purposes. The securities/investments quoted here are not recommendatory.

To read the RA disclaimer, please click here
Research Analyst - Aakash Baid

Disclaimer

The stocks mentioned in this article are not recommendations. Please conduct your own research and due diligence before investing. Investment in securities market are subject to market risks, read all the related documents carefully before investing. Please read the Risk Disclosure documents carefully before investing in Equity Shares, Derivatives, Mutual fund, and/or other instruments traded on the Stock Exchanges. As investments are subject to market risks and price fluctuation risk, there is no assurance or guarantee that the investment objectives shall be achieved. Groww Invest Tech Pvt. Ltd. (Formerly known as Nextbillion Technology Pvt. Ltd) Ltd. do not guarantee any assured returns on any investments. Past performance of securities/instruments is not indicative of their future performance.
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