Whalesbook
📉 The Financial Deep Dive
Nazara Technologies navigated a complex quarter (Q3FY26) marked by the de-consolidation of Nodwin, which led to a reported 24.1% YoY revenue decline to INR 406.0 Cr. However, excluding Nodwin's impact, the company achieved a robust 9.8% adjusted YoY revenue growth. This strategic shift, while impacting top-line figures, underscored a strong operational focus, as evidenced by a 29.4% YoY surge in EBITDA to INR 67.8 Cr. Margins were a key highlight, expanding to 16.7% in Q3FY26 from 9.8% in the prior year period, a testament to the success of its Centres of Excellence (COEs) strategy and operational efficiencies.
For the nine months ended December 31, 2025 (9MFY26), revenue from operations climbed 29.7% YoY to INR 1,431.2 Cr, with EBITDA soaring 73.0% YoY to INR 177.2 Cr. The 9MFY26 EBITDA margin stood at 12.4%, a significant improvement from 9.3% in 9MFY25.
Profitability presented a mixed picture. PAT from continued operations for Q3FY26 saw a marginal 2.8% YoY increase to INR 8.8 Cr. However, for 9MFY26, PAT from continued operations experienced a sharp 77% YoY decrease to INR 11.3 Cr. This decline, alongside a marginal dip in PAT before share of profit/(loss) from associates in Q3FY26, warrants investor attention. Conversely, PAT before share of profit/(loss) from associates for 9MFY26 showed substantial growth of 407.4% YoY to INR 259.3 Cr, boosted by an "Other income" of INR 1,192.9 Cr.
Segmental performance indicated healthy underlying growth. Mobile Gaming revenue grew 48% in 9MFY26, while AdTech saw significant YoY increases in revenue (86%) and EBITDA (95%) in the same period. Offline Gaming maintained healthy EBITDA margins of approximately 36%. Sportskeeda focused on cost optimization, reducing costs by 32% YoY in Q3FY26.
Key events impacting the results include an impairment loss of INR 384 crore recognized by NODWIN related to the de-consolidation of its subsidiary Freaks 4U Gaming GmbH. Kiddopia's subscriber growth resumed, and the company is expanding its IP footprint. Detailed balance sheet and cash flow data were not provided in this update.
🚩 Risks & Outlook
The primary challenge remains navigating the impact of de-consolidations on reported financials while demonstrating sustained underlying growth. The significant year-on-year decline in PAT from continued operations for 9MFY26 requires careful scrutiny. Management's focus on "Profit-Led Growth, Scalable Execution, and Capital Discipline" is crucial. Investors will watch for continued margin expansion, effective capital allocation, and the path to profitability for segments like NODWIN, which aims for EBITDA profitability in FY26. The lack of detailed balance sheet and cash flow statements is a data gap.
Management Guidance: While specific revenue guidance wasn't provided, the emphasis is on profitable growth and operational efficiencies through COEs. NODWIN targets EBITDA profitability in FY26.