Ola, Paytm crash up to 50% in H1 2025; are new-age stocks worth buying now?

Share price of Zomato, Ola Electric, and Swiggy have tumbled up to 50 per cent in calendar year 2025. Should you buy or sell new-age stocks for the rest of 2025

New-age stocks to buy: Most new-age stocks have turned out to be wealth destroyers in stock markets, so far, in calendar year 2025. Shares of Ola Electric Mobility, for instance, have plunged nearly 50 per cent in the first half of CY 2025, while those of Swiggy, PB Fintech, Paytm, and Eternal (Zomato) have crashed between 6 per cent and 25 per cent, ACE Equity data shows.

 

Shares of FSN E-commerce, the parent company of Nykaa, has been the only stock gainer, rising 28 per cent till June 27, 2025. By comparison, the benchmark Nifty50 has yielded returns of 8.43 per cent on the bourses, while the Nifty MidCap index has risen 3.82 per cent and the Nifty SmallCap 1.1 per cent.

 

Expensive valuation, relative to broader markets, and low profit visibility going ahead has forced investors to dump the stocks, reason analysts. They suggest investors stay selective in the sector with a long-term view.  READ STOCK MARKET LIVE UPDATES TODAY

 

New-age stocks still expensive?

Vinod Nair, head of research at Geojit Investments Limited, links the recent underperformance in new-age stocks to the disconnect between their valuations and growth outlook.

 

"Select stocks continue to trade at premium valuations relative to the broader market, driven by expectations of a turnaround in profitability and above-average industry growth. However, many of these companies remain loss-making or profitability missing estimates," he said.

 

Notably, Eternal's current price-to-earnings (PE) multiple, based on trailing twelve months, stands at 442 times (x), while that of PB Fintech is 236.1x, and Nykaa is 899.8x.

 

By comparison, Nifty50’s current PE is 23x, and Nifty MidCap, and SmallCap is 33x each.

 

These pricey valuations are at a time when select stocks are facing industry-specific headwinds.

 

Eternal (Zomato) and Swiggy, for instance, are facing heated competition in the quick commerce space with the entry of Rapido and Amazon in the space.  ALSO READ | Sensex, Nifty slip after 4-day rally; PSBs, smallcaps cushion losses 

Paytm, meanwhile, has been facing regulatory challenges from the Reserve Bank of India (RBI) with the fintech company’s lending arm, Paytm Payments Bank, being barred from accepting new deposits or allowing credit transactions since March 15, 2024.

 

Moreover, the Finance Ministry has, for now, dismissed the idea of introducing merchant discount rates (MDRs) for large UPI payments, shunning hopes of a new revenue stream.

 

Loss-laden Ola Electric, on its part, has been losing market share in the electric two-wheeler segment.

 

Nykaa, however, has emerged as a notable exception in H1 2025. The company’s stock, analysts said, has rallied on the back of its inclusion in the MSCI Global Standard Index, which sparked expectations of substantial passive inflows. Secondly, the company posted better-than-expected results in the March quarter (Q4FY25), reporting a 193 per cent year-on-year increase in consolidated profit after tax at ₹20 crore.

 

Zomato, on the contrary, posted a 78-per cent decline in net profit, Swiggy posted 95 per cent expansion in net loss, Paytm saw slightly narrowed net loss of ₹540 crore, and Ola Electric posted 109 per cent surge in net loss at ₹870 crore in Q4FY25.

 

"With global liquidity in a tight spot, due to higher for longer interest rates, investors find it difficult to invest in companies with low or no profitability, trading at 75-110x of Ebitda or price-to-sales (P/S) multiples on FY26 projections," said VaqarJaved Khan, senior fundamental analyst, Angel One.  ALSO READ | Gujarat Industries Power shares charged up 5% in trade; here's why 

Should you avoid or buy new-age stocks?

For Khan of Angel One, Nykaa is the best bet within the new-age pack. The e-retailer's beauty and personal care (BPC) segment is expected to grow around 25-30 per cent in FY26 and FY27, while the fashion segment, too, is expected to turn Ebitda positive in FY27. "Overall, Ebitda margins are expected to touch around 7.5 per cent in FY26E and 9.5 per cent in FY27E," he said.

 

However, those at JM Financial have 'buy' ratings on Eternal (target: ₹280) and Swiggy (target: ₹450) as the brokerage expects the companies' Ebitda losses to have peaked in Q4FY26, paving way for rerating ahead if financials improve.