Nazara Technologies: Choice sees 45% upside, TP ₹400

What changed in the latest broker note

Choice Institutional Equities has retained its Buy rating on Nazara Technologies Ltd, pointing to improving profitability and what it describes as a more focused, gaming-first business profile. The brokerage said Nazara is transitioning into a “globally diversified, gaming-first platform” with improving earnings quality, strong cash conversion, and rising operating leverage. It also noted that, after portfolio rationalisation over the last two quarters, the business now operates on a structurally cleaner and higher-margin base. Choice expects gaming to contribute about 90% of FY26 EBITDA, underlining a sharper tilt toward the core segment.

A ‘cleaner’ portfolio after restructuring

Choice said recent restructuring has improved Nazara’s operating profile and made the core business more scalable and margin-accretive. In a separate research note included in the provided information, the brokerage highlighted strategic actions such as the de-subsidiarisation of Nodwin and taking upfront impairments in PokerBaazi and Freaks4U investments. Choice described these moves as a deliberate balance sheet reset aimed at improving earnings quality and putting major one-offs behind the company.

The brokerage also said the business mix has “materially simplified,” with drivers including deeper LiveOps, stronger monetisation of owned IP, and a rising contribution from international markets. It expects the core gaming segment to deliver EBITDA margins of 20% to 25% over the medium term.

Key operating triggers: Bluetile, BestPlay, and the COE model

Looking ahead, Choice expects incremental scale from Bluetile and BestPlay to improve earnings visibility. It also flagged the execution of a Centre of Excellence (COE)-led operating model and deeper monetisation of owned intellectual property as levers that could support margin expansion. The brokerage’s thesis is anchored in operating leverage as scale improves and the portfolio becomes more gaming-heavy.

Recent financial performance cited by the brokerage

For Q2 FY26, Choice highlighted what it called broad-based growth. As per the note, revenue rose 65% year-on-year to ₹530 crore, while EBITDA increased 146% to ₹62 crore. The brokerage attributed improved operational efficiency to the ‘Enter Magic’ brand refresh and a push toward AI-enabled, immersive experiences.

Choice also said Nazara’s strategy includes scaling through larger, IP-led global acquisitions. It stated that over 90% of the company’s gaming revenues are generated overseas, with a focus on markets such as the US and UK.

Valuation stance and target prices: SOTP approach stays

Choice reiterated that it values Nazara on a sum-of-the-parts (SOTP) basis. In one section of the provided material, it said its target price is ₹400, and it retains the Buy rating. Based on the same note, it estimated an upside potential of around 45% from an assessed market price of ₹263.

A separate Choice note in the supplied text also mentions a Buy call with a target price of ₹390, projecting around 55% upside from then-current levels (Nazara was quoted near ₹251-₹253 in that excerpt). These targets appear in different notes/time-stamps within the provided material, but both reflect a positive stance from the same brokerage.

How JM Financial reads the same story

JM Financial, as cited in the material, said Nazara reported improving core gaming execution and stronger operating leverage in Q4 FY26, which offset weaker performance in eSports and Ad-tech. JM Financial added that management is increasingly focused on core gaming, and it indicated that non-core segments could potentially be divested in the future. It also noted that Bluetile consolidation is expected to materially strengthen FY27 scale.

JM Financial maintained an ADD rating with a March 2027 target price of ₹300.

Regulatory overhang: Online Gaming Bill 2025 and PokerBaazi exposure

The material also references the Promotion and Regulation of Online Gaming Bill, 2025, passed by the Lok Sabha, which bans real-money gaming (RMG) and related advertisements in India. Nazara clarified in that context that it had no direct exposure to RMG businesses, but the company has indirect exposure through its 46.07% stake in Moonshine Technologies Pvt. Ltd. (PokerBaazi).

Choice noted that Nazara’s minority stake in PokerBaazi is ring-fenced and not consolidated, and it limited potential downside to about ₹1,000 crore of invested capital. The brokerage said it had impaired 80% of this investment in its valuation model, valuing PokerBaazi at ₹200 crore.

Snapshot: key data points mentioned across the material

What market screens and scorecards are flagging

One of the appended scorecards in the text lists a “Snowflake Score” set with Valuation 1/6, Future Growth 3/6, Past Performance 1/6, Financial Health 4/6, and Dividends 0/6. The same section states: earnings are forecast to grow 64.09% per year, but also flags risks such as large one-off items impacting financial results and notes profit margins (2.2%) are lower than last year (6.2%). Another line in the material claims the stock is 48.2% overvalued (as presented in that source).

The provided information also includes historical market data points such as a current share price of ₹266.80 (in one table), and another excerpt noting the stock traded at ₹251.40 on a Tuesday session. Elsewhere, a separate excerpt lists the price at ₹1,164.90, and another states the stock closed at ₹1,401.35 on a Tuesday. These appear to be pulled from different time periods and should be read as separate snapshots rather than a single continuous price series.

Background: Nodwin funding round and Nazara’s stake

The supplied text also includes an older corporate development: Nodwin Gaming raised $18 million, valuing it at $125 million pre-money and $149 million post-money. Nazara disclosed that ₹232 crore was involved in its filing, including a secondary sale of ₹34.76 crore, and that post-transaction it would hold a 52.71% stake in Nodwin Gaming on a non-dilutive basis. Nodwin’s turnover was stated as ₹381 crore in FY23, up from ₹211 crore in FY22 and ₹136 crore in FY21.

Conclusion: what investors will track next

Across the material, the common thread in broker commentary is a sharper focus on core gaming, restructuring-led simplification, and operating leverage as scale improves. Choice’s maintained Buy stance and SOTP-based targets (₹400 in one note; ₹390 in another) contrast with JM Financial’s more cautious ADD and ₹300 target, reflecting different comfort levels on execution and segment volatility.

Key monitorables mentioned in the notes include Bluetile and BestPlay scaling, COE-led execution, IP monetisation, and clarity around the regulatory environment after the Online Gaming Bill, 2025, particularly in relation to Nazara’s indirect PokerBaazi exposure.