Most listed new-age startups improve Q4 profitability; Swiggy, Ola lag behind

Economic Times

05-06-2025

Out of the 17 new-age companies listed on Indian stock exchanges, 11 reported an improvement in profitability for the January-March quarter, either by expanded profits or narrower losses, in a sign of better operational performance. This group includes Nykaa, Delhivery, BlackBuck, Paytm, Policybazaar, Go Digit, Ather Energy and Ixigo.
However, six others saw a deterioration in their bottom lines. These include food and grocery delivery firms Swiggy and Eternal, which ramped up cash burn amid intensifying competition in the fast-growing quick commerce sector. Losses also widened for FirstCry, Mobikwik and Ola Electric. For Ola Electric, the fourth-quarter loss more than doubled to Rs 870 crore even as its operating revenue plummeted 62%.
Among the lot of these 17 companies, beauty and fashion retailer Nykaa and Policybazaar parent PB Fintech were the top performers, having posted 24% and 38% year-on-year growth in revenue for the fourth quarter, while also more than doubling their profits.Brokerages underscored the improvement in margins for these two companies, which went public in 2021, suggesting the momentum could continue. For PB Fintech, Citi Research highlighted a one-percentage-point expansion in contribution margins for the March quarter — which came after three quarters of contraction — in addition to reduced expenses on employee stock option plans as key drivers behind its strong profitability momentum. On Nykaa, brokerage firm JM Financial said strong working capital enhancement ensured that the company had its first year of positive cashflow since Covid, after adjusting for lease liabilities and capital expenditure. 'We believe core BPC (beauty and personal care) will benefit from repeat purchases from customers acquired this year, resulting in sharper margin improvement in the coming years. Nykaa's ability to deliver robust growth in a tepid demand environment along with margin enhancement demonstrates its differentiated market positioning,' the firm said.
Beauty retailer Honasa Consumer, the parent of Mamaearth, meanwhile saw its profits falling 15% during the quarter on back of the company's offline restructuring exercise. The company's management indicated that it is now expected to see the positive impact of the rejig.
Quick burn
The fourth quarter saw increased cash burn for Gurgaon-based Zomato parent Eternal and Bengaluru-headquartered Swiggy in their quick commerce units, Blinkit and Instamart, respectively. This impacted their consolidated earnings, particularly at a time when their largest segment of food delivery is undergoing a slowdown.
Going ahead, senior executives of the two companies laid out differing views on how they see profitability. Eternal said Blinkit will aggressively chase market share even if it comes at the cost of near-term profitability. On the other hand, Swiggy group CEO Sriharsha Majety said the operating losses for Instamart peaked by the end of the January-March quarter, and the company expects to 'progressively unwind losses' from here on. Eternal reported a 78% fall in its net profit to Rs 39 crore in the past quarter, while Swiggy's net loss nearly doubled to Rs 1,081 crore.A research note from HSBC Securities said Blinkit lost Rs 2 for every Rs 100 of gross order value (GOV), while Swiggy lost Rs 18. 'Cash burn for Swiggy was even higher than profit losses. In terms of competitive intensity, while the next few months are tactically favourable for Blinkit and Swiggy Instamart, competition may get intense again in the second half of this year and next year (2026),' it said.
EV mixed bag
For Ola Electric, the March quarter saw not only expanding losses but also a significant fall in revenue as the company went from being the leader in electric two wheeler segment to now falling behind legacy players such as TVS Motor and Bajaj Auto in terms of market share.Analysts at Kotak Institutional Equities, while downgrading their call on Ola Electric's stock to 'sell', said its future 'hinges on scaling up volumes' and a 'successful motorcycle foray', and that the company 'faces executive and credibility challenges'.According to the brokerage firm, the company's performance during the past couple of quarters has been marred by weaker scooter volumes and rising warranty provisions, which have weighed on its profitability. 'Volume trends have been impacted by increased competitive intensity and several quality issues faced by customers,' the analysts added.
The company's operating revenue for the March quarter came in at Rs 611 crore – lower than its rival Ather Energy, which posted Rs 676 crore in top line. To be sure, Ather Energy, which went public in May, clocked less than half the scooter volumes compared with la Electric in fiscal 2025. Even though Ola Electric's losses expanded, Ather Energy saw its loss narrowing 17% during the March quarter.
Logistics on firm ground
New-age logistics firm Delhivery and truck aggregator platform BlackBuck both reported profits for the fourth quarter, compared to losses in the year-ago period. For Delhivery, the profitability in the March quarter meant it posted its first full year of net profit as its core transportation business continued to show improvement in operating efficiencies.
BlackBuck, which went public last year, reported a net profit of Rs 280 crore, a major chunk of which was on account of a one-time tax credit. However, even on a pre-tax basis, BlackBuck turned profitable, reporting a Rs 41 crore profit, as it tightened expenses particularly under the heads of employee benefits and interest costs.