Choice Institutional Equities has maintained its 'Buy' rating on Nazara Technologies Ltd, citing strengthening profitability and an expanding gaming portfolio.

The domestic brokerage said, "Nazara is increasingly transitioning into a globally diversified, gaming-first platform with improving earnings quality, strong cash conversion and rising operating leverage."

It added, "Following portfolio rationalisation over the last two quarters, the business now operates on a structurally cleaner and higher-margin base, with gaming accounting for ~90 per cent of FY26 EBITDA."

It further highlighted that recent restructuring has improved the company's operating profile, making the core business more scalable and margin-accretive.

Looking ahead, Choice Institutional said incremental scale from Bluetile and BestPlay, execution of the Centre of Excellence (COE)-led operating model, and deeper monetisation of owned intellectual property (IP) are expected to enhance earnings visibility and support sustained margin expansion.

The brokerage also reiterated its valuation approach.

"We value Nazara on a SOTP basis, arriving at a target price of Rs 400 and retain our BUY rating. We believe current valuations do not fully capture the platform's improving profitability profile and long-term compounding potential," it said.

Based on the target price of Rs 400, the brokerage sees an upside potential of around 45 per cent from its assessed market price of Rs 263.

Meanwhile, JM Financial noted that Nazara reported improving core gaming execution and stronger operating leverage in Q4 FY26, which offset its weak performance in eSports and Ad-tech.

"Management is increasingly focused on core gaming (potentially by divesting non-core segments in future), and Bluetile consolidation is expected to materially strengthen FY27 scale. Maintain ADD with Mar'27 TP of Rs 300," it stated.