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What is the story about?
Nitish Mittersain, Joint MD & CEO of the Mumbai-based gaming company, Nazara Technologies, expects organic growth of 15-20% in 2026-27 (FY27), with margins in the core gaming business improving to nearly 25% by end of FY27 from 19.5% in the March quarter.
The acquisition of Bluetile Games could potentially double the company’s revenue and earnings before interest, taxes, depreciation, and amortisation (EBITDA) for FY27.
“AI is not just a narrative, but it's evident in the numbers,” Mittersain said while discussing Bluetile’s operations and productivity levels.
Smaaash 2.0 expansion and growth in Funky Monkeys will also support its offline gaming business over the coming years.
Nazara Tech's EBITDA margins for the March quarter nearly doubled to 20%, while EBITDA rose 66% year-on-year.
The company, which has a current market capitalisation of ₹9,702.48 crore, has seen its shares lose more than 9% over the last year.
This is an edited transcript of the interview.Q: When I look at your revenues on a year-on-year basis, the decline is on account of the deconsolidation of Norway that happened in Q3 and Q4 as well. But on a quarter-on-quarter basis, it's flattish at ₹397 crore versus ₹402 crore. Could you explain that? And what do you expect in FY27?A: For us, structurally, we've transformed the company in FY26 with a very strong focus on our core gaming business that drives much higher margins, which is why you will see year on year for this quarter, our margins have almost doubled to nearly 20% now. So, we're on the right track with our focus on the core gaming business. Our centres of excellence are driving great synergies, and therefore, while the revenues may not have scaled, our EBITDA is up 66% year on year.
More importantly, if you also look at our cash flows, setting aside other income, etc., our operating cash flows stood at ₹213 crore, which is up 81% year on year. So, the company is in a very healthy position. We are creating Nazara as a global gaming operating platform, and we are well on our way to achieving that.
In FY27, due to our recently announced acquisition of Bluetile Games, with target companies as big as Nazara itself, we expect to significantly scale up in FY27. So FY26 was a year of transformation for us. FY27 is a year of scale-up for us on a very strong foundation.
For the full interview, watch the accompanying video Q: For FY27, what would organic growth look like? And plus, with the Bluetile acquisition, what would the growth look like? Can you sustain EBITDA margins above 20%? A: Yes. So, especially in the last 12 to 18 months, we have created these centres of excellence on artificial intelligence, on user acquisition, on data analytics, and these synergies are percolating across all our studios and all our 40-plus gaming IPs that we operate. So, we expect healthy organic growth to kick in. We should do 15% to 20% this year, and with the Bluetile acquisition, once it is closed, we expect that it will lead to potentially doubling our revenue and EBITDA for FY27.
Q: And what kind of operating leverage are you factoring in? Your EBITDA on an absolute basis doubles, but that's on account of the acquisition. But post acquisition, and with the synergies of your organic growth coming in as well, what is the kind of margin expansion that you're foreseeing?A: Our intention is to move up our margins in our core gaming business. Q4 came in at 19.5%, and we should be able to creep up to 25% by the end of next year. So, there is a clear-cut opportunity, especially leveraging AI, because you have to remember, Nazara is a product-first company and owns a lot of popular IPs, and if you own them, then you can leverage AI very well to improve your cost efficiencies and deliver more content at a lower cost. And this can directly have a margin-positive impact.
Also Read | Nazara Technologies to raise ₹500 crore via preferential warrants
Q: On the talent part as well, the Bluetile acquisition brings Raymond Stauffer as well, and he is a big name in the gaming industry. What does that do for your business from a leadership standpoint and from the product rollout standpoint?A: Yes, we're very excited to have Raymond come on board the Nazara platform, and with him and his core team of approximately 50 people, largely based in Barcelona, this team is extremely ahead on leveraging AI for gaming. If you look at their previous year's revenues, they did about ₹1,450 crore in revenue and ₹250 crore in EBITDA with only a team of 50 people. So clearly, AI is not just a narrative, but it's evident in the numbers. So, that's going to be one real game changer, beyond consolidation of numbers, etc., for Nazara.
Secondly, they also have a sister platform called BestPlay, which is a reward-based game discovery platform, and many of Nazara's existing games and IPs will go on to that platform and potentially get a large boost.
Q: Will his scope of operations go beyond Bluetile and, at some point, come into Nazara as well with the stuff that you all are doing?A: We would love to see that happen over a period of time. At this point in time, we have a clear-cut agenda for Bluetile and BestPlay. And I think a lot of the energy of that team is going to be focused, at least for FY27, on achieving what they have set out to achieve.
Q: Wanted to ask you about the turnaround strategy of Smaaash 2.0. There was a bit of a degrowth this time around as well. So, what's giving you that confidence, and what are the targets on that one? And also, what's the timeline for Nodwin Gaming's IPO? Anything in the offering? Should we look at it in this fiscal?A: I would not worry a lot about Q4 degrowth because it's a seasonal business. Q3, the October-to-December quarter, is obviously the peak season. But after acquiring Smaaash, what we have set out to do is completely reinvent it using our technologies and our gaming IPs. And we can bring a completely first-time experience to the consumers. So, later in the year, we will launch the first store or instance of Smaaash 2.0, and once it is successfully established, we will look at expanding it across all the existing centres. We operate about 11 centres currently in India, and then eventually expand it to 40-50 centres over a three-year period.
Also Read | Canara Bank says asset quality is stable, can absorb ₹10,000 crore ECL impact
So most of Smaaash is still a work in progress in FY27; you'll see the real impact in FY28. But our other offline IP, which is Funky Monkeys, is expanding very well. When we acquired it at 10 stores, we doubled those stores in one year, and we're continuing with very aggressive growth over here. So quite excited about that.
Q: Do you want to answer the point of Nodwin's IPO as well?A: Yes, from a Nazara perspective, in FY26, we took a call ourselves to focus on our core gaming business. So, we have multiple other businesses, such as Nodwin in the eSports space, Sportskeeda, and we are exploring opportunities to extract value from those businesses one way or the other, because we can clearly see a large opportunity to redeploy whatever we get into our core gaming business. We are not in a big hurry. We will look at getting the right values for the business. And from that perspective, Nodwin is also exploring an IPO, maybe in FY28.
Q: No acquisitions in FY27 for now, right?A: Nothing immediately.
Catch all the latest updates from the stock market here
The acquisition of Bluetile Games could potentially double the company’s revenue and earnings before interest, taxes, depreciation, and amortisation (EBITDA) for FY27.
“AI is not just a narrative, but it's evident in the numbers,” Mittersain said while discussing Bluetile’s operations and productivity levels.
Smaaash 2.0 expansion and growth in Funky Monkeys will also support its offline gaming business over the coming years.
Nazara Tech's EBITDA margins for the March quarter nearly doubled to 20%, while EBITDA rose 66% year-on-year.
The company, which has a current market capitalisation of ₹9,702.48 crore, has seen its shares lose more than 9% over the last year.
This is an edited transcript of the interview.Q: When I look at your revenues on a year-on-year basis, the decline is on account of the deconsolidation of Norway that happened in Q3 and Q4 as well. But on a quarter-on-quarter basis, it's flattish at ₹397 crore versus ₹402 crore. Could you explain that? And what do you expect in FY27?A: For us, structurally, we've transformed the company in FY26 with a very strong focus on our core gaming business that drives much higher margins, which is why you will see year on year for this quarter, our margins have almost doubled to nearly 20% now. So, we're on the right track with our focus on the core gaming business. Our centres of excellence are driving great synergies, and therefore, while the revenues may not have scaled, our EBITDA is up 66% year on year.
More importantly, if you also look at our cash flows, setting aside other income, etc., our operating cash flows stood at ₹213 crore, which is up 81% year on year. So, the company is in a very healthy position. We are creating Nazara as a global gaming operating platform, and we are well on our way to achieving that.
In FY27, due to our recently announced acquisition of Bluetile Games, with target companies as big as Nazara itself, we expect to significantly scale up in FY27. So FY26 was a year of transformation for us. FY27 is a year of scale-up for us on a very strong foundation.
For the full interview, watch the accompanying video Q: For FY27, what would organic growth look like? And plus, with the Bluetile acquisition, what would the growth look like? Can you sustain EBITDA margins above 20%? A: Yes. So, especially in the last 12 to 18 months, we have created these centres of excellence on artificial intelligence, on user acquisition, on data analytics, and these synergies are percolating across all our studios and all our 40-plus gaming IPs that we operate. So, we expect healthy organic growth to kick in. We should do 15% to 20% this year, and with the Bluetile acquisition, once it is closed, we expect that it will lead to potentially doubling our revenue and EBITDA for FY27.
Q: And what kind of operating leverage are you factoring in? Your EBITDA on an absolute basis doubles, but that's on account of the acquisition. But post acquisition, and with the synergies of your organic growth coming in as well, what is the kind of margin expansion that you're foreseeing?A: Our intention is to move up our margins in our core gaming business. Q4 came in at 19.5%, and we should be able to creep up to 25% by the end of next year. So, there is a clear-cut opportunity, especially leveraging AI, because you have to remember, Nazara is a product-first company and owns a lot of popular IPs, and if you own them, then you can leverage AI very well to improve your cost efficiencies and deliver more content at a lower cost. And this can directly have a margin-positive impact.
Also Read | Nazara Technologies to raise ₹500 crore via preferential warrants
Q: On the talent part as well, the Bluetile acquisition brings Raymond Stauffer as well, and he is a big name in the gaming industry. What does that do for your business from a leadership standpoint and from the product rollout standpoint?A: Yes, we're very excited to have Raymond come on board the Nazara platform, and with him and his core team of approximately 50 people, largely based in Barcelona, this team is extremely ahead on leveraging AI for gaming. If you look at their previous year's revenues, they did about ₹1,450 crore in revenue and ₹250 crore in EBITDA with only a team of 50 people. So clearly, AI is not just a narrative, but it's evident in the numbers. So, that's going to be one real game changer, beyond consolidation of numbers, etc., for Nazara.
Secondly, they also have a sister platform called BestPlay, which is a reward-based game discovery platform, and many of Nazara's existing games and IPs will go on to that platform and potentially get a large boost.
Q: Will his scope of operations go beyond Bluetile and, at some point, come into Nazara as well with the stuff that you all are doing?A: We would love to see that happen over a period of time. At this point in time, we have a clear-cut agenda for Bluetile and BestPlay. And I think a lot of the energy of that team is going to be focused, at least for FY27, on achieving what they have set out to achieve.
Q: Wanted to ask you about the turnaround strategy of Smaaash 2.0. There was a bit of a degrowth this time around as well. So, what's giving you that confidence, and what are the targets on that one? And also, what's the timeline for Nodwin Gaming's IPO? Anything in the offering? Should we look at it in this fiscal?A: I would not worry a lot about Q4 degrowth because it's a seasonal business. Q3, the October-to-December quarter, is obviously the peak season. But after acquiring Smaaash, what we have set out to do is completely reinvent it using our technologies and our gaming IPs. And we can bring a completely first-time experience to the consumers. So, later in the year, we will launch the first store or instance of Smaaash 2.0, and once it is successfully established, we will look at expanding it across all the existing centres. We operate about 11 centres currently in India, and then eventually expand it to 40-50 centres over a three-year period.
Also Read | Canara Bank says asset quality is stable, can absorb ₹10,000 crore ECL impact
So most of Smaaash is still a work in progress in FY27; you'll see the real impact in FY28. But our other offline IP, which is Funky Monkeys, is expanding very well. When we acquired it at 10 stores, we doubled those stores in one year, and we're continuing with very aggressive growth over here. So quite excited about that.
Q: Do you want to answer the point of Nodwin's IPO as well?A: Yes, from a Nazara perspective, in FY26, we took a call ourselves to focus on our core gaming business. So, we have multiple other businesses, such as Nodwin in the eSports space, Sportskeeda, and we are exploring opportunities to extract value from those businesses one way or the other, because we can clearly see a large opportunity to redeploy whatever we get into our core gaming business. We are not in a big hurry. We will look at getting the right values for the business. And from that perspective, Nodwin is also exploring an IPO, maybe in FY28.
Q: No acquisitions in FY27 for now, right?A: Nothing immediately.
Catch all the latest updates from the stock market here
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