“Show me the money,” the memorable line from Tom Cruise-starrer Jerry Maguire, could well be the market’s refrain for India’s new-age IPOs five years on. Back in 2021, when a clutch of these companies hit the stock market, investors were asked to look beyond losses and conventional valuation metrics. With profits largely absent, revenue growth and EV-to-sales multiples became the preferred yardsticks.

Half a decade later, the picture is more nuanced. Many of these companies have delivered strong revenue growth, several have turned profitable, and a few have handsomely outperformed the market. Yet, valuations remain demanding, while reported profits at many firms continue to receive significant support from ‘other income’, and core operating profitability is still evolving. The original question, therefore, has not disappeared; it has simply changed. Can operating profits grow enough to justify the valuations investors continue to assign?

Growth delivered

The strongest argument in favour of the 2021 new-age IPO cohort is that several companies have largely delivered on growth expectations.

Eternal, formerly Zomato, has seen total income surge to ₹55,760 crore in FY26, translating into a four-year CAGR of over 80 per cent. Its adjusted EBITDA margin has improved sharply, from minus 44 per cent in FY22 to 2.2 per cent in FY26. The stock has risen about 341 per cent from its IPO price, far ahead of the 47 per cent gain in the Nifty 50 TRI over the same period.

PB Fintech has grown total income at a CAGR of 46.6 per cent between FY22 and FY26, while its EBITDA margin improved from minus 64.9 per cent to 6.9 per cent. RateGain Travel Technologies recorded a total income CAGR of 48.9 per cent and expanded EBITDA margins from 8.7 per cent to 18.5 per cent.

Nazara Technologies delivered topline growth of 47.9 per cent annually, while Nykaa grew at 27.5 per cent. CarTrade Tech, meanwhile, swung from an EBITDA margin of minus 42.9 per cent in FY22 to 33 per cent in FY26.

The stock-market scorecard, too, is not uniformly disappointing. Eternal, Nazara, RateGain, CarTrade and Nykaa have outperformed the Nifty 50 TRI since their IPOs, while Easy Trip, One97 Communications (Paytm) and CE Info Systems (MapMyIndia) have lagged.

The core profit test

That said, the conversation around these companies remains centred on revenue growth and EBITDA, much as it was at the time of listing. Even after five years, the focus has not fully shifted to robust operating profits.

The tougher test now is whether these businesses have converted scale into durable and meaningful profitability. On that score, the picture remains mixed.

Eternal reported a FY26 net profit of ₹366 crore on revenue of ₹55,760 crore. However, its other income stood at ₹1,396 crore, nearly four times its reported net profit. While operating profitability has improved substantially, an EBITDA margin of 2.2 per cent remains modest relative to the expectations embedded in the stock.

PB Fintech reported a FY26 net profit of ₹670 crore, compared with a loss of ₹833 crore in FY22. Yet other income of ₹372 crore accounted for about 56 per cent of net profit. With proposed insurance distribution reforms likely to weigh on earnings, profitability expectations for FY28 already appear under pressure, with recovery potentially pushed to FY29. The ₹33,000-crore erosion in market capitalisation of the stock over just two trading sessions recently underscored the risks of valuations driven more by future expectations than current cash flows.

Paytm presents an even starker contrast. It reported a FY26 net profit of ₹552 crore, while other income amounted to ₹854 crore. The composition of earnings, therefore, matters as much as the headline turnaround from losses to profits.

To be sure, other income does not automatically imply poor earnings quality. It can include legitimate treasury income, fair-value gains, forex gains, provision write-backs and other non-operating items. Cash-rich companies can justifiably earn substantial income from surplus funds. However, when judging whether these businesses have matured enough to support premium valuations, investors must distinguish profits generated by the core franchise from those arising from non-operating sources.

There are, however, stronger operating performers within the cohort. RateGain’s FY26 EBITDA margin of 18.5 per cent, CarTrade’s 33 per cent and CE Info Systems’ 37 per cent suggest that some companies have begun to demonstrate meaningful operating leverage.

Valuations still pricey

The larger issue is that valuations continue to price in substantial future growth. Collectively, these nine companies generated about ₹2,400 crore in net profit in FY26 but command a combined market capitalisation of more than ₹6.25 lakh crore. In effect, investors are paying roughly ₹260 for every ₹1 of profit generated by these firms. By comparison, investors pay only about ₹28 for every rupee earned by an old-economy company such as Larsen & Toubro.

Bloomberg data based on FY26 earnings shows Eternal trading at about 572 times earnings, Nykaa at 336 times, Paytm at 111 times, Nazara at 105 times and PB Fintech at around 98 times. Their EV/EBITDA multiples are equally demanding, with Eternal at 172 times, PB Fintech at 126 times and Nykaa at 91 times.

By contrast, the relatively mature operating profiles of RateGain, CarTrade and CE Info Systems are accompanied by lower, though hardly inexpensive, valuation multiples. RateGain trades at about 50 times FY26 earnings, even as several leading global SaaS companies trade at single-digit or low-teens P/E multiples. CarTrade trades at 35 times earnings, while CE Info Systems is valued at about 33 times earnings and 23 times EV/EBITDA. Even then, CE Info Systems’ stock remains nearly 15 per cent below its IPO price.

Overall, the burden of proof remains high for the most richly valued names. Five years ago, investors were asked to look beyond losses and pay for future growth. Today, growth is visible and profits have begun to emerge. Yet current valuations still assume another significant leg of margin expansion and earnings growth. For many of these companies, therefore, the story remains very much a show-me one. Sooner rather than later, investors are likely to demand sustained and meaningful operating profits, not just topline growth.

Published on September 26, 2026