Nazara returns to profit as revenue growth outpaces cost growth
Operating margin recovered 8.31 percentage points QoQ, but a -37.16% tax rate helped lift net profit above pre-tax profit.
Filed 26 Oct 2026, 19:23 IST · after market close · Nazara Technologies Ltd (NAZARA)
Key takeaways
- Consolidated revenue rose 87.31% QoQ while expenses grew 70.81%, lifting operating margin by 8.31 percentage points to 14.06%.
- Net profit recovered to Rs 35.36 cr from a Rs 82.47 cr loss, helped by a negative tax rate of -37.16%.
- Other income was Rs -9.75 cr, equal to -37.82% of pre-tax profit, making earnings quality a key caveat.
Price around the results
Revenue rebound improves operating leverage
Nazara’s consolidated revenue rose 87.31% QoQ, while expenses increased 70.81%, so operating margin recovered by 8.31 percentage points. Operating profit consequently rose 357.60% QoQ to Rs 112.89 cr. The company’s 14.06% operating margin was 1.56 percentage points above the 12.5% median for 51 Consumer Discretionary peers that had reported.
Depreciation and tax shaped the profit recovery
Depreciation grew 54.18% QoQ to Rs 73.56 cr, while interest increased 6.74% to Rs 3.8 cr, limiting the conversion of operating profit into pre-tax profit. Other income was negative at Rs -9.75 cr and represented -37.82% of pre-tax profit. The -37.16% tax rate then boosted net profit to Rs 35.36 cr against pre-tax profit of Rs 25.78 cr, so the quarter’s earnings were flattered below the operating line.
Margin recovers from Q1, but remains below Q4
The 14.06% operating margin marked a recovery from 5.75% in Q1FY27, after 18.61% in Q4FY26. This breaks the prior quarter’s deterioration but does not yet restore the Q4 level. With no year-on-year comparison available, the sequential rebound is the clearer measure of momentum.
Results filed after market close
Nazara filed these consolidated Q2FY27 results after market close on 26 October 2026. The filing leaves the next trading session as the first opportunity for the market to respond.
Q2FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q2FY27 | Q1FY27 | QoQ |
|---|---|---|---|
| Revenue | ₹803 cr | ₹429 cr | +87.31% |
| Other income | ₹-10 cr | ₹-54 cr | +81.82% |
| Expenses | ₹690 cr | ₹404 cr | +70.81% |
| Operating profit | ₹113 cr | ₹25 cr | +357.60% |
| Operating margin (%) | 14.06% | 5.75% | — |
| Interest | ₹4 cr | ₹4 cr | +6.74% |
| Depreciation | ₹74 cr | ₹48 cr | +54.18% |
| Profit before tax | ₹26 cr | ₹-80 cr | — |
| Tax | ₹-10 cr | ₹2 cr | — |
| Net profit | ₹35 cr | ₹-82 cr | — |
| EPS (₹) | ₹0.95 | ₹-2.16 | — |
Operating margin of 14.06% compares with a Consumer Discretionary sector median of 12.50% across 51 peers that have reported Q2FY27.
What to watch
- Whether operating margin remains above 14.06% after its 8.31-percentage-point QoQ rebound.
- Whether depreciation moves down from the Rs 73.56 cr reported in Q2FY27.
- Whether net profit remains positive without the benefit of a -37.16% tax rate.