Nazara Technologies Ltd

Nazara Technologies reported Q4FY26 revenue of ₹398.8 crore, down 23.5% YoY and 2% QoQ, primarily due to the deconsolidation of Nodwin Gaming and seasonal softness across segments. While Esports and Adtech revenues remained under pressure, the company’s core Gaming business continued to perform strongly. Gaming revenue, which contributes nearly 70% of total revenue, grew 78% YoY, supported by improving traction in Kiddopia, Animal Jam, Fusebox, and PC & console publishing.

Despite lower overall revenue, EBITDA margins expanded sharply by 280 basis points sequentially to 19.5% in Q4FY26. The improvement was driven by a richer mix of high-margin gaming revenues, lower content costs, and better operating efficiencies. Profit from continuing operations surged to ₹46.9 crore from ₹9.8 crore in the previous quarter, reflecting the benefits of cost optimization and operating leverage. This margin improvement has emerged as one of the biggest positives for investors.

Management remains optimistic about FY27 growth, driven by subscriber recovery, better monetization, and expansion of narrative gaming intellectual properties (IPs). Kiddopia subscribers increased 2.1% QoQ to over 220,000 users, while ARPU improved to USD 7.49. Nazara is also investing heavily in AI-driven user acquisition, analytics, and engagement capabilities, which management believes will strengthen execution efficiency and support long-term profitability. Upcoming Roblox launches and Bluetile integration are expected to further enhance the company’s gaming ecosystem.

While the gaming segment continues to gain strength, visibility in Adtech and Esports remains moderate. The company also indicated that ongoing investments in user acquisition, platform expansion, and new IP launches could keep near-term earnings progression gradual. Brokerage estimates suggest Revenue/EBITDA/PAT CAGR of 13.5%/30.4%/81.9% over FY26–FY28, reflecting confidence in long-term operating leverage despite short-term uncertainty.

Nazara Technologies is increasingly positioning itself as a higher-margin, globally diversified gaming company rather than a broad-based digital entertainment platform. Although revenue growth remains uneven due to portfolio restructuring, investors are focusing on margin expansion, stronger gaming monetization, and AI-led operational efficiencies. This shift in business mix and profitability outlook is becoming the key driver behind the renewed interest in the stock.