Nazara Swings to Rs 35 Crore Q2 Profit as Bluetile Deal Lifts Revenue 53%, but Balance Sheet Takes the Strain

Nazara Technologies is back in the black. The listed gaming company reported a consolidated net profit of Rs 35.36 crore for the September quarter on Monday evening, compared with a loss of Rs 33.93 crore a year earlier. Revenue from operations rose 53% to Rs 803.15 crore from Rs 526.46 crore, and EBITDA nearly doubled, up 93% to about Rs 120 crore. The EBITDA margin improved to 14.9% from 11.8%.

Most of that jump came from one transaction. Nazara began consolidating Bluetile and BestPlay, the two mobile game studios it agreed to buy for about $303 million, from August 1. In just two months they contributed about Rs 329 crore of revenue and Rs 64 crore of EBITDA.

Gaming now carries the company

Gaming revenue more than doubled, up 122% to about Rs 656 crore, and now makes up 82% of group sales. Excluding the two acquisitions, gaming revenue still grew 11% and gaming EBITDA 17%. That matters, because it shows the older studios kept growing while the deal added scale.

Results within the older studios were mixed. Curve, the PC and console publisher behind Human: Fall Flat, grew revenue 27% to about Rs 77 crore, and its EBITDA margin climbed to nearly 39%. Kiddopia, the children's learning app, grew revenue 21% but saw EBITDA fall 77% to about Rs 2 crore as it spent heavily to acquire subscribers. Fusebox revenue slipped 4% on fewer organic installs.

The non-gaming businesses, mainly the sports media site Sportskeeda and the ad-tech firm Datawrkz, brought in about Rs 147 crore of revenue but made a small EBITDA loss.

The cost of the deal shows up on the balance sheet

The larger company also carries bigger obligations. Goodwill and other intangible assets rose to about Rs 4,345 crore at the end of September, from Rs 1,421 crore in March. Other current liabilities jumped to about Rs 3,057 crore from Rs 540 crore, mostly because of consideration still owed for Bluetile. Cash, deposits and current investments fell to about Rs 525 crore from Rs 735 crore. Net cash stood at about Rs 438 crore.

Operating cash flow for the first half was only about Rs 57 crore, against Rs 541 crore spent on acquisitions. Equity issuance, including a preferential allotment of 2.38 crore shares at Rs 306 each, filled much of the gap. The company has also raised its authorised share capital to Rs 90 crore from Rs 80 crore.

A large GST overhang at associates

The filing also restated a legal risk. Halaplay Technologies, an associate, has received a GST show-cause notice of about Rs 274 crore, and other associates face notices totalling over Rs 10,369 crore. Nazara says it has fully written off its investments in these entities and does not expect any further hit to the group. Some of the cases are before the Supreme Court.

What to watch

Nazara now has a new leadership team, with Raymond A. Stauffer as CEO since September and Arun Agarwal as CFO since October. The company is building shared marketing, data, product and technology teams so its studios can use common tools, including AI-generated ad creatives and automated game testing. The test over the next few quarters is whether this setup turns the bigger revenue base into steady cash flow. The quarter showed scale. It did not yet show that the company can generate enough cash on its own to pay what it owes for the deal.

Management will discuss the numbers with analysts on Tuesday at noon.

This is an original summary based on public reporting. See our editorial policy for how we source, write, and correct our stories.