Nazara Technologies , a leading player in the Indian gaming industry, has seen a significant change in its shareholding pattern as Rekha Jhunjhunwala, a prominent investor, sold her entire 7.06% stake in the company.

Transaction Details

• Jhunjhunwala disposed of 61.8 lakh shares
• The shares were sold at approximately Rs 1,225.00 per share
• The total transaction value was nearly Rs 334.00 crore

Other Major Investors

• Madhusudan Kela continues to hold a 1.18% stake
• Nikhil Kamath maintains a 1.62% stake

Market Response

ICICI Securities has downgraded Nazara Technologies to 'reduce' with a revised target price of Rs 1,100.00, down from the previous Rs 1,500.00. This downgrade is primarily due to regulatory concerns surrounding Nazara's exposure to Moonshine Technology (PokerBaazi).

Nazara's Clarification

In response to market concerns, Nazara Technologies has issued a statement clarifying its position:

1. The company has no direct exposure to real money gaming (RMG) businesses.
2. Moonshine Technology's revenue is not consolidated into Nazara's financial statements.
3. There is no contribution to Nazara's quarterly revenues from Moonshine Technology.

Regulatory Impact

The exit of Rekha Jhunjhunwala and the subsequent market reaction highlight the growing regulatory challenges in the Indian online gaming sector. The government's stance on online gaming, particularly real money gaming, has created uncertainty for companies operating in this space.

Conclusion

As the regulatory landscape continues to evolve, companies like Nazara Technologies will need to navigate carefully, potentially reassessing their investment strategies in the gaming sector and managing the financial implications of their existing investments.

Nazara Technologies , a leading gaming and sports media company, has reported robust financial results for the first quarter of fiscal year 2026, demonstrating significant growth across key metrics.

Strong Financial Performance

The company's Q1 FY26 revenue surged by 99% year-on-year to ₹498.80 crore, while EBITDA grew by 90% to ₹47.40 crore. The core gaming business delivered a healthy 24.4% EBITDA margin. Profit After Tax (PAT) from continued operations stood at ₹36.40 crore, with overall PAT reaching ₹51.30 crore, marking a substantial 118% year-on-year increase.

Strategic Deconsolidation of Nodwin Gaming

Nazara announced the strategic deconsolidation of Nodwin Gaming, subject to shareholder approval. This decision aims to sharpen Nazara's focus on core gaming businesses while allowing Nodwin to independently raise growth capital and operate with greater flexibility. Post-deconsolidation, Nazara is expected to hold a stake of approximately 46-47% in Nodwin.

Gaming Segment Performance

The gaming segment showed impressive growth, with revenue increasing by 160% year-on-year and EBITDA growing by 311%. Key contributors to this growth include:

Curve Games

Acquired earlier this year, Curve Games posted revenue of ₹54.60 crore and EBITDA of ₹20.70 crore in Q1 FY26.

Fusebox Games

Revenue grew 49% year-on-year to ₹73.00 crore, with an EBITDA of ₹10.40 crore.

Kiddopia

Reported revenue of ₹45.40 crore and EBITDA of ₹8.50 crore, showing signs of subscriber stabilization.

Animal Jam

Saw a 12.1% increase in revenue to ₹26.40 crore and a robust 55% growth in EBITDA to ₹5.90 crore.

Expansion into Offline Gaming

Nazara has made strategic moves in the offline gaming space:

Smaaash

Acquired through NCLT process, Smaaash delivered revenue of ₹8.10 crore and EBITDA of ₹3.30 crore in the consolidation period starting from June 6th.

Funky Monkeys

Revenue expanded by 6.5% year-on-year to ₹4.90 crore, with plans to add 8-9 new centers this year.

PokerBaazi Performance

Moonshine Technologies, PokerBaazi's parent company (in which Nazara holds a 46% stake), reported its highest quarterly net revenue of ₹191.80 crore. However, it incurred an EBITDA loss due to front-loaded marketing costs related to IPL campaigns.

Future Outlook

Nazara Technologies remains focused on its IP-led gaming strategy and is confident in its ability to scale into a global gaming platform. The company is on track to achieve or surpass its guidance of ₹300.00 crore EBITDA by FY27.

Nitish Mittersain, CEO & JMD of Nazara Technologies, stated, "These results underscore the strength of our IP-led gaming strategy delivering strong topline growth alongside disciplined cost management and a focus on growth with profitability."

As Nazara continues to expand its portfolio and optimize its operations, the company appears well-positioned for sustained growth in the dynamic gaming industry.