Indian tech IPOs move from growth to profitability as market demands proof of sustainability

Five years after India’s first wave of new-age listings, investors now seek demonstrable operational profitability, shifting focus from mere growth to sustainable business models amid high valuations and evolving market expectations.

Five years after India’s first wave of new-age listings, the market is asking a different question from the one it posed in 2021. Back then, investors were urged to look past losses and conventional valuation measures and focus instead on growth, scale and the promise of future profitability. Today, several of those companies have indeed expanded rapidly, a handful have turned profitable and a few have rewarded shareholders handsomely. But the central debate has shifted from whether these businesses can grow to whether they can turn that growth into durable operating profits that justify the prices investors continue to pay.

The strongest case for the cohort is that many of the leading names have delivered the top-line expansion once promised. Eternal, the company formerly known as Zomato, has seen total income climb sharply over the period, while its adjusted EBITDA margin has moved from deep losses to modest positive territory. PB Fintech has also recorded strong growth and a marked improvement in margins. RateGain Travel Technologies, Nazara Technologies, Nykaa and CarTrade Tech have each posted notable revenue gains, with CarTrade in particular moving from heavy operating losses to a much stronger margin profile. According to the article in The Hindu BusinessLine, several of these stocks have also outpaced the Nifty 50 since their initial public offerings.

Even so, the quality of those profits remains under scrutiny. The article notes that reported earnings at several companies are still being helped materially by other income, which can include treasury gains, foreign-exchange gains, fair-value changes and other non-operating items. That distinction matters. Eternal reported a profit in FY26, but other income was nearly four times that figure. PB Fintech’s reported profit was also supported by non-operating income, while Paytm’s earnings turnaround was similarly underpinned by income outside core operations. The piece argues that investors should separate genuine franchise profitability from accounting items that may not be repeated.

There are, however, clearer signs of operating maturity in parts of the group. RateGain, CarTrade and CE Info Systems are all cited as examples of companies that have developed more meaningful operating leverage, with stronger EBITDA margins than many of their peers. That does not make their valuations cheap, but it does suggest that some businesses within the cohort are moving beyond the pure growth phase and beginning to demonstrate the economics required for a more sustainable public-market case. According to the article, the challenge is no longer simply to prove demand; it is to prove that scale can be converted into profitable, cash-generating businesses.

Valuation remains the hardest part of the story. The Hindu BusinessLine article says the nine companies it tracks generated roughly ₹2,400 crore in net profit in FY26, yet together carried a market value of more than ₹6.25 lakh crore, implying investors were paying a very rich multiple for each rupee of earnings. Bloomberg-based earnings multiples cited in the piece show several of the names still trading at demanding levels, including Eternal, Nykaa, Paytm, Nazara and PB Fintech. Even the more established operators, such as RateGain, CarTrade and CE Info Systems, trade at levels that are elevated by traditional market standards. The broader message is that the market has moved on from rewarding merely the prospect of growth. What it now wants is evidence that growth can translate into sustained operating profit, not just a better-looking income statement.