Nazara Tech's Focus On Growth Right Now, Not Margins, Says Founder Nitish Mittersain

Nazara Technologies Ltd.'s priority remains reinvesting profits for growth, even as it tries to maintain minimum margins, according to its founder and Managing Director Nitish Mittersain.

"Our priority remains on growth while remaining profitable with positive cash flow. We are not going to optimise our margins today, as many of the areas we are operating in are emerging large businesses at a nascent stage," Mittersain told BQ Prime's Niraj Shah.

According to him, the company has multiple engines of growth, diversification in geographies, products and revenue models.

While they had earlier guided for 50% growth on revenues for FY23, based on second-quarter numbers, that has been revised to 70-75%. "We have significantly upped our growth estimates. We are seeing growth momentum," he said.

Margin guidance was earlier at 12-13%, but now they are expecting to do "at least 10% in the entire year", Mittersain said.

Mittersain said the company is confident of going into FY24 on a strong footing, and doing well next year as well.

For the e-sports business, first and second quarters have been slower but almost 60-65% revenue comes in the third and fourth, he said. "With the addition of the gaming accessories business, Q2 becomes the peak season for this segment because of Diwali and festival sales," he said. "And if we compare Q2 FY23 with Q2 FY22, we are seeing 174% spike."

Other segments of e-sports business also did well, he said. “The company did a BGMI (Battlegrounds Mobile India) championship with Star Sports that did well in the quarter. Our Sportskeeda business continues to grow healthily."

Mittersain said the company is not too worried about the rising cost of acquisition as a lot of their content is created in-house.

Nazara Tech is launching original content in e-sports and the focus is on creating their own IP. "Today, it eats up into our margins, but in the long term, it will become strong profit generators for us."