Nazara Technologies Limited has received an adverse ruling from the GST appellate authority, with its appeal against a significant tax demand being rejected. The company disclosed this development through a regulatory filing under Regulation 30 of the SEBI Listing Regulations.

Appeal Order Details

The Office of the Commissioner of CGST & CX. Appeals-I, Mumbai issued an Appeal Order dated December 30, 2025, which the company received on February 05, 2026. The Appellate Authority rejected and disposed of the appeal application filed by Nazara Technologies, upholding the earlier tax demand and penalty.

Background of GST Dispute

The original order was issued by the Additional Commissioner, CGST & C. Ex, Mumbai South Commissionerate under Section 74(1) of the Maharashtra Goods and Services Tax Act, 2017. The demand arose due to non-receipt of export proceeds within the stipulated time period for FY 2017-18 and FY 2018-19.

The company had previously informed exchanges about this matter through intimations dated February 05, 2025 and May 09, 2025, when it first received the original GST order and subsequently filed the appeal.

Company's Response and Next Steps

Nazara Technologies is currently evaluating appropriate legal options following the rejection of its appeal. The company's available remedies include:

• Filing an appeal before the appropriate appellate authority
• Approaching the relevant tribunal against the Appeal Order
• Exploring other legal avenues as deemed appropriate

Financial Impact Assessment

The company has provided clarity on the financial implications of this development. Management stated that the financial impact would be limited to the extent of the demand raised and penalty levied under the Appeal Order. Importantly, the company emphasized that there would not be any material impact on its financial position, operations, or other business activities.

This regulatory disclosure ensures transparency with stakeholders regarding the ongoing GST matter and its potential implications for the gaming and sports media company.

Nazara Technologies delivered strong operational performance in Q3FY26, demonstrating significant margin expansion and profitability turnaround. The gaming company reported consolidated net profit from continuing operations of ₹8.8 crores compared to a loss of ₹33.9 crores in the previous quarter, showcasing effective execution of its profit-led growth strategy.

Financial Performance Highlights

The company's financial metrics showed robust profitability improvements with EBITDA margins expanding significantly both year-over-year and quarter-over-quarter. The results reflect the impact of disciplined capital allocation and focus on scalable gaming operations.

For the nine-month period, Nazara demonstrated exceptional growth momentum with revenue increasing 29.7% YoY to ₹1,431.2 crores and EBITDA surging 73% YoY to ₹177.2 crores, with margins expanding to 12.4%.

Gaming Segment Delivers Strong Performance

The mobile gaming division achieved impressive results with the gaming segment delivering a 25% EBITDA margin in Q3FY26. The company's focus on scalable gaming IP and franchises showed positive momentum across multiple properties.

Kiddopia Recovery Through Centre of Excellence Strategy

The implementation of Centres of Excellence across User Acquisition, Data Analytics, Growth, and Product functions proved instrumental in Kiddopia's performance turnaround. The educational gaming app achieved subscriber growth recovery in Q3FY26 after several quarters of decline.

Strategic Investments and Business Expansion

The board approved strategic investments including nCore Games, developers of the made-in-India franchise 'FAU-G', and a primary capital infusion of up to ₹15 crores into Rusk Media, a mobile-first entertainment platform for Gen-Z and Gen-A audiences. These investments underscore Nazara's commitment to supporting the Indian gaming ecosystem.

Diversified Portfolio Performance

The PC and Console publishing division maintained strong performance with ₹70.9 crores revenue and ₹27.8 crores EBITDA in Q3FY26. The offline gaming segment delivered healthy margins with approximately 36% EBITDA margin, while the AdTech division showed robust growth momentum.

Adjusted for Nodwin deconsolidation, Q3FY26 YoY revenue growth stood at 9.8%, reflecting the underlying strength of Nazara's core gaming operations and successful implementation of strategic initiatives across multiple business verticals.