PokerBaazi Writeoff Drags Nazara To INR 34 Cr Loss In Q2

Gaming company Nazara Technologies plunged into the red in Q2 FY26, posting a net loss of INR 33.9 Cr against a net profit of INR 16.2 Cr in the year-ago quarter. In the previous quarter, Nazara’s PAT stood at INR 51.3 Cr.

The company fell into a loss due to the ban on real-money gaming, which impacted one of its portfolio companies, PokerBaazi. In its balance sheet, Nazara recognised an aggregate reduction of INR 914.7 Cr in its investment in PokerBaazi, shedding the investment value to INR 96.5 Cr.

“After recognising the impairment loss, Nazara reported a standalone net loss of INR 966.95 Cr during the quarter and INR 939.34 Cr for the year-to-date period. Despite this exceptional and non-recurring loss, the company’s standalone net worth remains strong at INR 2,236.42 Cr, reflecting a stable financial position,” Nazara said.

Important to mention that Nazara CEO Nitish Mittersain had earlier said that the company “will evaluate the potential impairment” of the write-off of its investment in PokerBaazi… “with our strong revenues, profitability, and cash flows, Nazara is well placed to absorb any impact with ease,” he said in August.

Meanwhile, operating revenue for the quarter jumped 65% YoY and 6% QoQ to INR 526.5 Cr. Total income stood at INR 1,630.9 Cr, bolstered by an ‘other income’ of INR 1,104.5 Cr, which came on the back of Nazara reclassifying Nodwin as an associate entity from a subsidiary earlier.

Total expenses surged to INR 534.3 Cr (up 66% YoY) in Q2 FY26 from INR 321.3 Cr in the same period last year.

The company remeasured its investment in Nodwin at fair value on the date of loss of control and resulted in a gain of INR 1,098.5 Cr in its balance sheet.

In July, Nazara announced that Nodwin Gaming would raise a fresh funding round from its existing investors, with Nazara opting not to participate. 

With the hive-off, Nazara also booked a loss of INR 223.7 Cr due to Nodwin’s impairment of its investment in Freaks4U.

While the impairment of Freaks4U came due to stagnation in the European markets and stagnation in growth of esports in developed markets, Nodwin also faced challenges with its acquired gaming accessories brand Wings.

Adding to regulatory pressure, Nazara and group entities Halaplay and OpenPlay are also currently facing GST issues. The demands pertain to the government’s recent move to levy 28% GST on the full value of player deposits instead of net gaming revenue, an issue affecting the entire gaming industry. The company has challenged these notices.

However, the auditor flagged the issue in its report. 

“We draw attention to… details and uncertainties regarding the matters related to Goods and Service Tax with respect to one subsidiary of Holding Company and three subsidiaries of the associate of the Holding Company, where in the show cause notice (SCN) raising tax demand amounting to INR 27,421 Lakh and INR 11,59,678 Lakh respectively have been received by them, in respect of which no adjustments have been made in the accompanying unaudited consolidated financial results,” the auditor noted.

Segment Wise Revenue Breakdown

Nazara primarily earns revenue from mobile gaming, offline gaming, adtech, its sports media arm. Here is the segmentwise breakdown of the revenue. 

Mobile Gaming: Revenue surged 81% YoY to INR 206 Cr in Q2, with EBITDA rising 95% to INR 24 Cr. Flagship IPs such as Love Island, Big Brother, Kiddopia, and Animal Jam contributed strongly. Nazara said it plans to expand Animal Jam to Roblox and launch Bigg Boss for Indian markets.

PC & Console Publishing: Now consolidated after the Curve Games acquisition, the vertical delivered INR 60.7 Cr in revenue and INR 18.7 Cr in EBITDA during Q2. Human Fall Flat sold 1.25 Mn units in September, while Wobbly Life crossed 2 Mn units and will launch on Switch 2.

Offline Gaming: The segment (including Smaaash and Funky Monkeys) contributed INR 29.6 Cr in revenue and INR 6 Cr in EBITDA. Nazara said Smaaash’s revamp and CRM-led strategies are improving footfalls and repeat visits.

Adtech: Revenue rose 501% YoY to INR 145.1 Cr, while EBITDA increased 289% to INR 7 Cr, following the consolidation of Space and Time with Datawrkz.

Sports Media: Sportskeeda’s revenue fell 23.8% YoY due to a drop in organic traffic post Google’s core update, but management has begun cost optimisation, targeting a 40% YoY cost reduction in Q3. Other sites like Pro Football Network, Soap Central, and PrimeTimer saw growth of over 80–170%.

Besides, the company entered a share purchase agreement to make an investment of INR 27.1 Cr in Rusk Media by way of secondary acquisition of 4,276 Series A CCPS from Nodwin.

Shares of Nazara ended 0.12% higher at INR 256.6 Cr on BSE today.

Edited by Akshit Pushkarna