Nazara’s revenue increased by 70% to INR 223 crore in the first quarter of FY23

• ByStartupStory     |    July 30, 2022

Nazara Technologies, located in Mumbai, increased its consolidated profit after tax (PAT) by 22% year on year (YoY) to INR 16.5 Cr in the April-June quarter of the fiscal year 2022-23 (FY23), owing to robust development in its esports and real money gaming operations. On a quarter-on-quarter (QoQ) basis, the company’s PAT more than quadrupled during the period from INR 4.9 Cr recorded in Q4 FY22.

Nazara’s operational revenue increased by 70% to INR 223.1 Cr in Q1 FY23, up from INR 131.2 Cr in the same period last fiscal year. Every quarter, it was 27% more than the INR 175.1 Mn recorded in Q4 FY22. Esports was the largest contributor to income, accounting for 46%, preceded by gamified early learning (24%). Esports revenue increased to INR 102.3 Cr in Q1 from INR 53.2 Cr in the previous quarter. Nazara’s gamified prior learning, on the other side, produced an overall income of INR 52.5 Cr, a small increase year on year.

“As revenues from media rights, personal IPs, and the D2C business grow, the advantages of operational leverage will kick in, resulting in improved EBITDA margins for the esports sector,” Nazara explained in an investor presentation. Meanwhile, Nazara’s overall costs increased by 90% in Q1 FY23 to INR 193 Cr, with expenditures on the content, event, & web server fronts contributing the most. In the first quarter, the gaming firm spent INR 71.2 Cr on content, events, and web servers, compared to INR 21.3 Cr in the same quarter the previous year.

Advertising & business promotion costs increased by 53% year on year to INR 65 Cr, up from INR 42.4 Cr in the previous quarter. Employee benefit spending increased over 96 percent to INR 28.4 Cr in Q1 FY23, up from INR 14.5 Cr in the same period the previous year. In this regard, it is worth noting that Nazara recently purchased a controlling investment in programmatic advertising & monetization firm Datawrkz, which has become one of its subsidiaries alongside Sportskeeda, NODWIN, and others.

According to a 2021 KPMG research, the number of online gamers in India would increase to almost 400 million by mid-2020 from around 250 million in 2018, giving the country the second-largest base of online gamers after China. While the company’s development appears to be excellent, it remains to be seen how the ultimate decision on the modification of the goods and services tax (GST) charge on the gaming sector affects firms such as Nazara.

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