The July-September quarter this year tells us a story of both the successes and failures of India’s new-age tech firms. Backed by the growth in online insurance, PB Fintech, the parent of Policybazaar, an online insurance firm, reported a 38 per cent hike in revenue, and a higher 165 per cent in profit after tax. The revenue of FSN E-Commerce Ventures, better known as Nykaa, was up 25 per cent, and profit a higher 154 per cent. In the case of Eternal Brands, which owns delivery services like Zomato and Blinkit, revenue was up 183 per cent, but profit plummeted 63 per cent. India’s EV (electric vehicle) marvel Ola Electric’s revenue slipped 43 per cent, even as the quarterly loss widened to more than Rs 400 crore.
Possibly, the lesson is that the disciplined firms gain, and exuberant ones derail. Probably, they are at different points in the evolution, and learning curves. PB Fintech has recurring revenue, cross-sells products, and earns higher premiums. Nykaa, once criticised for erratic profitability, focuses on gross margins, even as it adds new stores. When Eternal’s Blinkit opts for a rapid rollout, it drives the top-line but compresses profitability. Ola Electric’s weakness is structural, with factors that may be out of management control.
This is reflected in the stock market quotes, as some firms inch towards consistent profits, and others continue to burn cash, and convert growth into profits. A tracker by Inc42 estimates that while the profitable new-age firms saw post-listing gains of 31 per cent, the loss-making peers dropped 42 per cent since the debuts. The aggregate market cap of the new-age basket, however, declined a tad from $109 billion to $106 billion, according to WhalesBook, even though most reported double-digit revenue growths. Investors too take a more considerate, and considered approach.
Delhivery’s numbers illustrate the combination of higher, and muted noise. Its shareholder letter shows that while the second quarter’s (FY 26) revenue is up 16 per cent year-on-year, with a net profit of Rs 59 crore, market reports cited a net loss of nearly Rs 50 crore. Accounting for acquisitions possibly blurs the perception. The broader takeaway is that investors closely parse filings for evidence related to incomes, and operations. Analysts highlight such changes.
With high global and Indian valuations, and inflows from venture capitalists into Indian start-ups down nearly 60 per cent year-on-year in 2025, domestic investors are conservative. Growth is no longer what catches their attention. Cash flows do. Hence, Nykaa’s decision to slow store expansion, PB Fintech’s emphasis on renewals, and Eternal’s focus on segmental disclosure signal positive signs. Competition adds another layer. Zomato, and Blinkit may dominate quick commerce, but Zepto and Swiggy grow 15-20 per cent quarter-on-quarter. Nykaa’s first-mover advantage is tested by conglomerate muscle. In payments, PayTM’s regulatory setbacks open spaces for PhonePe and Google Pay to deepen integration with UPI Lite and credit on UPI. In EVs, Ather and TVS iQube nibble at Ola’s share. The once-clear line between “tech start-ups” and “traditional companies with tech ambitions” blurs.
Governance and disclosures, once peripheral, are central to the investor calculus. The central bank’s actions against PayTM payments bank, questions related to related-party transactions in Honasa Consumer, and revenue-recognition adjustments in logistics companies shift attention from marketing narratives to management credibility. Investors read the fine print before assigning multiples. Two broad observations emerge, less as verdicts and more as plausible outcomes. First, the new-age sector is entering a sorting cycle. If profit growth sustains, capital may move towards platforms with proven track records. Asset-heavy or regulatory-exposed peers face multiple compression or strategic mergers.
Second, the definition of “tech company” may evolve. EV manufacturers and logistics players may trade like industrials, with valuations tied to utilisation and yield per shipment. Digital platforms with repeat-purchases may resemble FMCG players. The Q2-FY26 numbers are therefore less a scorecard than a referendum on business maturity. The next test will be consistency, and this will encompass profits, governance, and competitive resilience. For investors, the coming quarters will reveal which celebrated disruptors survive, and which do not, after the easy money runs out.
A recent article highlights the challenges. According to one of the experts quoted in it, the real story is not about revenues and profits, but of performance. If the “bread-and-butter businesses, the core units… are growing, and are profitable, and these companies are also adding new verticals, they will continue to attract investor interest.” Ironically, the new verticals lead to losses. Hence, firms need to strategise in the sense that the contribution of old-core profitable businesses exceed those of the new verticals, which guzzle money initially. It is akin to having 2-3 verticals that make money, and one that is new, and requires money for the next 1-2 years.
For example, Swiggy’s core food-delivery business, according to the article, generates cash, and subsidises the new verticals, like quick commerce. The company hopes to raise Rs 10,000 crore to invest in the latter one. In the case of Urban Company, which offers professional household services, the quarterly loss was up from Rs 2 crore to Rs 59 crore, largely because of the investment in InstaHelp, which provides services to professionals. Minus this division, the company, says Abhiraj Singh Bhal, co-founder, earned an EBIDTA of Rs 10 crore, which implies that the core business is profitable.
There is an issue with expectations among the initial investors, and the later ones, especially, when a start-up goes public. The early investors expect quick top-line growth, or scalability, so that a firm reaches a revenue level that is attractive to the latter investors, and allows the initial ones to cash out. But when a company opts for a listing, the later investors want to see profits. Hence, there is always a conflict between the top-line and bottom-line. As expectations change, the co-founders are caught in a quandary, whether to pursue growth or profits, or both. This results in mismatches.
More importantly, as recent IPOs indicate, there are variations between institutional and retail investors while the firms get listed. The former are willing to wait, and are not bothered about valuation issues. The latter wish to see instant gains, and believe in instant gratification, and bet on listing gains. Hence, the discounted post-IPO stock prices enrage, and worry the small investors. This leads to debates about valuations, and the role of the regulator, as has happened in India in the recent past. The listed start-ups begin a new journey that is saddled with quarterly demands.
