The Revival of New-Age Tech Stocks

The Revival of New-Age Tech Stocks [EasyDNNnews:PaidContentStart]

India’s new-age tech stocks are regaining focus, driven by profitability, execution, and sustainable growth. From fintechs to e-commerce, mobility, and enterprise tech, the shift reflects discipline over dreams. Abhishek Wani explores the rally, risks, and future of digital disruptors 

Why Are New-Age Stocks Back in Action? The Reset, the Rally, and the Road Ahead 

For years, India’s new-age stocks have swung between extremes—wild euphoria at IPO launches, followed by sharp corrections when reality lagged behind lofty projections. Zomato, Paytm, Nykaa, Ola Electric, and Swiggy once embodied India’s digital ambition, but by early 2025, many of them had shed 40–50 per cent of their value. Investors had grown weary of cash burn and unfulfilled promises. 

But within months, the tide shifted. Zomato surged nearly 40 per cent in three months, Paytm rose 46 per cent, and Ola Electric rebounded 23 per cent in a single month. Collectively, India’s listed digital firms reclaimed over ₹3 lakh crore in market capitalisation, with Zomato alone crossing ₹3.1 lakh crore and Swiggy above ₹1 lakh crore. This is not 2021’s frenzy—it looks more like a reset where profitability, efficiency, and execution drive investor confidence. 

The moment that captured this shift came when Zomato overtook Hindustan Aeronautics Ltd. (HAL) in market cap. HAL delivered profits of nearly ₹10,800 crore in FY25—20 times Zomato’s ₹527 crore—but investors valued Zomato higher, placing their bets on the scalability of digital platforms over the steady but slower growth of legacy businesses. 

This inversion highlights the new market psychology: valuations now reward firms that demonstrate a credible pathway to profitability in fast-growing digital categories, even if their absolute earnings remain modest. 

What Makes New-Age Tech Companies Different? 

New-age firms are digital-first disruptors built to scale quickly and challenge traditional industries. Unlike legacy businesses that depend on factories and physical outlets, these companies operate through apps, platforms, and technology-driven ecosystems. 

Their models are typically asset-light and growth-led, prioritising user acquisition before profits. Backed by institutional and venture capital, they thrive on innovation and consumer stickiness—traits that set them apart from conventional businesses. 

For investors, they represent exposure to India’s digital consumption story and diversification into high-growth themes like fintech, e-commerce, and EVs. 

Why Invest in Them? 

Despite the risks, new-age tech stocks offer unique appeal. They tap into India’s digital transformation, benefit from shifting consumer habits, and provide investors exposure to highgrowth themes like fintech, online retail, and EVs. Beyond growth, they bring diversification to portfolios and represent a bet on future innovation in the Indian economy. 

Drivers Behind the Surge 

The rally in India’s new-age tech stocks is not simply speculative hype—it is being fuelled by a mix of macroeconomic shifts, policy support, earnings improvement, and structural tailwinds. 

On the macro front, fiscal reforms such as income tax relief with no effective tax liability up to ₹12 lakh and proposed GST rate cuts have lifted sentiment, while monetary easing added a fresh tailwind. Between February and August 2025, the Reserve Bank of India cut the repo rate by 100 basis points—from 6.5 per cent to 5.5 per cent—offering relief to businesses and consumers alike. At the same time, sectoral drivers remain strong: demand for digital-first services, fintech platforms, and electric vehicles continues to accelerate as India’s consumption-driven economy expands. Policy changes, including GST restructuring and the potential inclusion of new-age firms in thematic and sectoral indices, have further reinforced investor appetite. 

Crucially, this surge is not just about macro-optimism. Company-specific improvements have played an equally important role. Q1 FY26 earnings showed a visible shift—most new-age firms reported stronger revenue growth, narrowing losses, or even a move into profitability. Management commentary across the board highlighted tighter cost discipline, operational efficiency, and a sharper focus on sustainable growth—exactly the reset investors had been waiting for. 

Technical factors have also added momentum. The inclusion of companies such as Nykaa into MSCI’s global indices has brought new institutional flows, while domestic institutional investors (DIIs) have increased allocations in names like PB Fintech and Nykaa, treating them as high-growth structural bets. Strategic moves—such as Zomato’s acquisition of Paytm’s ticketing business or Ola’s push into EV diversification—have reinforced confidence in their long-term relevance. 

Finally, valuations have reset. After steep corrections of 20–50 per cent in H1, stock prices now trade 20–40 per cent below prior peaks, creating an attractive entry point for investors betting on long-term digital themes. As a result, the rally feels more like a rerating of credible growth stories than a return to unchecked exuberance. 

Stock price index (Jan–Aug 2025) for Paytm, Zomato, Ola Electric, Swiggy 

This year-to-date (YTD) share price index chart tracks the performance of leading new-age tech stocks—Paytm, Eternal (Zomato), Swiggy, and Ola Electric—from January to August 2025. The chart vividly illustrates the dramatic correction these stocks experienced during the first half of the year, followed by a strong and swift rebound in the subsequent months. 

Domestic institutional investors (DIIs) have been a major driver of the rebound in new-age tech stocks, signalling confidence in their shift from cash burn to profitability. Zomato’s DII stake jumped over 10 percentage points year-onyear to 26.5 per cent, fuelling its 40 per cent rally, while Paytm’s holdings nearly doubled to 16 per cent as funds bet on its turnaround. Swiggy saw DII ownership rise sharply from 7.75 per cent to 13.5 per cent within two quarters, aligning with narrowing losses. PB Fintech and Delhivery also recorded steady increases, reinforcing investor belief in insurance digitisation and logistics growth. 

In contrast, Nazara Tech, Affle, and Easy Trip Planner Tech witnessed declining DII interest, reflecting weak performance and company-specific issues. 

The message is clear: the rally has followed the money, with DIIs backing firms that show credible paths to profitability and market leadership. However, the surge in these stocks cannot be attributed solely to higher DII participation. In fact, the opposite has been seen in names like CarTrade Tech and Go Digit, where DII holdings declined but the stocks—especially CarTrade—delivered strong outperformance. 

New Age Stocks: Top Movers (June–Aug 2025) Top 5 Gainers 

New-age tech stocks have seen a sharp divergence in performance this year. On the winning side, CarTrade (+ 50 per cent), Paytm (+ 43 per cent), Eternal (+ 36 per cent), Swiggy (+ 26 per cent), and Delhivery (+ 31 per cent) led the rally, powered by improving profitability visibility and strong domestic institutional investor (DII) inflows. Paytm’s turnaround efforts, Blinkit-led traction for Zomato’s peer Swiggy, and Delhivery’s logistics backbone positioning attracted steady fund flows, while CarTrade gained on digital auto momentum. The common thread was clear—investors backed companies showing credible scale and profit paths. 

Top 5 Laggards 

EaseMyTrip (- 25 per cent), Nazara Tech (- 10 per cent), Affle (+ 7 per cent), FirstCry (+ 3 per cent), and PB Fintech (+ 2 per cent) lagged the pack amid valuation concerns, sector-specific headwinds, and muted earnings visibility. Travel seasonality hurt EaseMyTrip, regulatory and growth challenges weighed on Nazara and Affle, while FirstCry struggled with post-listing corrections. Even structurally strong plays like PB Fintech saw profit booking after past gains. Simply put, the rally has been selective, rewarding firms with profitability visibility while punishing those with stretched valuations or weak fundamentals. 

From Crash to Comeback: What Changed in 2025? 

Zomato (Eternal) — Zomato remains the bellwether of India’s digital economy. Margins in food delivery are improving while Blinkit scales rapidly. The pivot to an inventory-led (1P) model signals a trade-off of higher capital use for better control and margins. CFO Akshant Goyal’s margin commentary and CEO (Blinkit) Albinder Dhinsa’s focus on convenience reinforce brand differentiation. Food delivery growth is slowing, but efficiency and urban demand are tailwinds. 

Paytm (One97 Communications) — Paytm’s Q1FY26 turnaround stunned the Street—net profit of ₹122.5 crore versus a ₹839 crore loss last year, with revenues up 28 per cent year-on-year. Merchant subscriptions, higher GMV, and financial services distribution drove the rebound. New investments in Paytm Money signal deeper wealth-tech plays. Margins need watching, but profitability restores credibility. 

CarTrade Tech — Q1FY26 saw net profit more than double to ₹47 crore and revenues rise 22 per cent to ₹173 crore. Margins expanded to 25 per cent from 15 per cent a year ago, driven by efficiency. With growth across consumer and remarketing, CarTrade has emerged as a consistent new-age performer. 

Swiggy — Swiggy embodies the sector’s duality—strong topline but steep losses. Q1FY26 revenues surged 52 per cent year-on-year to ₹5,048 crore, yet losses widened to ₹1,197 crore. Food delivery remains profitable, but Instamart’s cash burn drags margins. Management expects efficiency gains and seasonality to reduce losses, though investors remain wary. 

Delhivery — Delhivery is strengthening post its ₹1,407 crore Ecom Express acquisition, boosting scale and efficiency. With logistics central to India’s consumption and e-commerce growth, the market is beginning to reassess its undervalued status. 

Ola Electric — Ola Electric epitomises the sector’s reset. Chairman Bhavish Aggarwal has shifted focus from breakneck expansion to balancing growth with profitability. Q1 saw near-neutral operating cash flow on the back of working capital and inventory improvements. The Roadster motorcycle launch added a new growth lever. Backing from the PLI scheme and rare-earth sourcing discussions bolster prospects, though capital intensity and margin risks remain. 

The Underperformers: When Policy and Promoter Actions Weigh Heavier than Growth 

Not every new-age story is about revival. While leaders like Zomato, Paytm, and Ola Electric staged comebacks, Nazara Technologies and Easy Trip Planners (EaseMyTrip) remind investors how regulation and governance can derail even promising businesses. 

Nazara Technologies — Strong earnings could not shield Nazara from policy risk. In Q1FY26, revenues doubled year-on-year to ₹499 crore and net profit jumped 237 per cent to ₹54 crore. Yet, the stock slid 20 per cent in August after the Online Gaming Bill, 2025 imposed a blanket ban on realmoney gaming (RMG). With RMG suspended, investors fled despite strong core growth. Valuations (~50x earnings) stay rich, but a policy shift could spark recovery—until then, regulatory clarity is decisive. 

Easy Trip Planners — Unlike Nazara’s external shock, Easy Trip’s woes are structural. Q1FY26 saw sales drop 22.5 per cent year-on-year to ₹113.8 crore and PAT crash 99 per cent to ₹0.44 crore. Sentiment worsened after promoter Nishant Pitti exited his 14.2 per cent stake via a ₹780 crore block deal at a steep discount, raising questions on long-term confidence. Weak performance coupled with governance overhang makes its recovery far tougher. 

Tailwinds from Megatrends
The comeback of new-age tech stocks is not happening in isolation—it is being fuelled by powerful megatrends reshaping India’s economy. Artificial intelligence, electric mobility, fintech, and online retail are not just buzzwords but multi-year growth engines. 

The AI market, projected to expand at 25–35 per cent annually under the IndiaAI Mission, is creating new opportunities in automation and cloud adoption. EVs are moving from niche to mainstream, with Ola Electric benefitting from rare-earth supply tie-ups and government incentives that target 30 per cent penetration of EV by 2030. 

Fintech remains a structural growth story as UPI adoption soars and regulatory clarity strengthens the business models of Paytm and PB Fintech. E-commerce too continues its upward march, with Nykaa and FirstCry capturing a bigger share of India’s online consumption—retail penetration is expected to climb to 17 per cent by 2030. 

The government is a quiet but steady catalyst. Productionlinked incentives (PLIs) for EVs and electronics, BharatNet’s rural digital rollout, and fintech-friendly regulations are accelerating adoption. 

Still, opportunities come with pressures. Globally, higher rates and tighter liquidity are forcing disruptors to show fiscal discipline. At home, EV and food delivery firms face thin margins and stiff competition. Quick commerce (Blinkit under Zomato) and digital payments continue to expand rapidly, but investors are scrutinising profitability more closely than ever. 

How to Pick the Best New-Age Stocks

For investors, the task is separating hype from substance. A checklist helps: 

1.  Business Model: Does it scale sustainably? (e.g., Zomato’s expansion into Blinkit).
2.  Growth Trends: Is growth resilient? (Affle steady but margin-pressured; Nazara hit by policy).
3.  Leverage & Cash Flow: Is expansion funded responsibly?
4.  Ownership: Are institutions backing the story? (Zomato and Paytm saw DII holdings surge) 

Risks That Investors Cannot Ignore

Volatility remains a defining feature. Regulatory shocks hurt Nazara Technologies despite strong earnings, while governance issues weighed heavily on EaseMyTrip after promoter exits. Valuations, though reset, remain steep compared to legacy players. That means execution missteps or renewed cash burn could quickly reverse gains. 

Conclusion: A Reset, Not a Bubble

The 2025 comeback of India’s new-age stocks is not a replay of the frothy IPO days—it is a disciplined rerating. Markets are rewarding profitability, governance, and credible execution, while punishing weak models. 

For investors, the takeaway is simple: judge these companies with the same rigour as legacy firms, but recognise their disruptive potential in megatrends shaping India’s economy. Corrections can offer entry points, but allocations should remain moderate given inherent volatility. 

Zomato surpassing HAL in market cap. is not about food versus defence—it reflects where investors see India’s next trillion-dollar opportunity. 

Investor Takeaway: New-age stocks are evolving from hype-driven stories into execution plays. Back those proving profitability and governance strength, avoid chasing momentum, and treat them as long-term bets—rewarding if chosen carefully, risky if followed blindly. 

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