Nazara Technologies, a key player in India's online gaming sector, announced its Q4 FY25 results, showcasing robust growth in revenue and a significant jump in net profit, supported by performance across its core gaming titles.

Net Profit Soars Over 20x Year-on-Year

The company reported a net profit of ₹4 crore for the quarter ended March 2025, up from a mere ₹18 lakh in the same quarter last year. This marks a staggering increase of over 2,122% year-on-year, highlighting a strong turnaround in its bottom line.

While this surge may seem dramatic, it is essential to consider the low base of the previous year. Nonetheless, such a leap reflects better operational efficiencies and improved revenue dynamics within its primary business verticals.

Revenue Grows 95% YoY Driven by Key Gaming Titles

Nazara’s revenue from operations jumped 95% YoY to ₹520.2 crore, up from ₹266.2 crore in Q4 of the previous fiscal year. This strong revenue growth is attributed to continued traction in its core gaming portfolio, particularly from:

• Fusebox – known for its storytelling and simulation experiences

• Animal Jam – an educational game for children

• Kiddopia – an early learning app for young kids that also witnessed improved unit economics

The company stated in its official release that these games played a pivotal role in driving topline performance during the quarter.

CEO’s Outlook: Positioned for Accelerated Growth in FY26

Nitish Mittersain, Joint Managing Director and CEO of Nazara Technologies, shared an optimistic outlook for the upcoming fiscal year, stating:

“As we enter FY26, we are poised for accelerated growth with increasing contributions from our core gaming portfolio.”

The statement underlines the company’s strategic focus on digital entertainment and mobile gaming, which continue to drive user engagement and monetisation.

Dip in Profit from Continuing Operations and PBT

Despite the growth in net profit and revenue, the company’s profit from continuing operations fell to ₹13.7 crore, marking a 19% decline year-on-year.

Moreover, profit before tax (PBT) also declined, slipping to ₹5.7 crore from ₹16.93 crore in the corresponding quarter of FY24. This dip suggests that while Nazara is growing top-line metrics, cost structures and operational margins remain areas of concern.

The declines raise questions about sustainability and scalability in some verticals of the company, especially those outside of gaming.

Stock Reaction: Shares Down Amid Mixed Financials

Following the results, shares of Nazara Technologies closed at ₹1,270.95 on the NSE, registering a 2.78% drop. The market appeared to respond cautiously, likely reflecting investor concerns over declining PBT and operational profits, despite robust revenue figures.

Segment Performance Highlights

Let’s look at the segment-wise performance contributing to the Q4 FY25 numbers:

• Gamified Early Learning (Kiddopia): Delivered improved unit economics and better customer retention.

• Freemium Gaming (Animal Jam): Continued to attract high engagement among children and parents.

• Interactive Story Games (Fusebox): Drove monetisation through in-app purchases and episodic content.

These verticals show how diversification within gaming content is helping Nazara achieve scale and profitability.

Challenges Ahead: Margin Pressure and Strategic Investments

While topline performance is commendable, the fall in profit before tax and operating profit indicates margin pressure. The company is likely investing heavily in:

• User acquisition

• Platform scalability

• Game development

• Technology integration

Nazara might need to strike a balance between growth and profitability as it scales up operations in India and globally.

What to Expect Going Forward in FY26

Nazara is entering FY26 with strong momentum. The company’s management expects:

• Further expansion in the gaming vertical

• New content releases across key IPs

• Continued cost rationalisation for improving margins

The company also hinted at international expansion strategies, potentially tapping markets in North America and the Middle East for new growth avenues.

Investor Takeaways

For retail and institutional investors, the Nazara Q4 FY25 earnings offer mixed signals:

• Positive: Strong YoY growth in revenue and net profit, promising gaming portfolio, positive management commentary.

• Negative: Falling profits from continuing operations, lower PBT, concerns over cost control and margin protection.

Final Thoughts

Nazara Technologies’ Q4 FY25 results demonstrate the resilience and potential of India’s digital gaming sector. With a solid lineup of high-performing titles and a forward-looking strategy, the company is poised for continued growth in FY26.

However, maintaining profitability across verticals, managing cost structures, and scaling global operations will be crucial for long-term shareholder value.

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