Full Breakdown
Divergent Q3 Performance of India's Internet Companies
2/23/2026, 11:32:25 AM
Overview of Q3 Performance
India's internet companies exhibited a stark contrast in their financial performance for the third quarter of 2026. While some platforms reported significant revenue growth and profit expansion, others struggled with weak earnings and increasing losses. This divergence has contributed to a broader decline in investor interest, with share prices of several new-age companies falling by up to 28% year-to-date.
Notable Performers
Among the standout companies, Eternal, which operates Zomato and Blinkit, reported a remarkable 202% year-on-year increase in revenue and a 73% rise in profit after tax (PAT). Despite these impressive figures, the stock has remained relatively flat since the earnings announcement. Similarly, PB Fintech, the operator of Policybazaar, achieved a 37% revenue growth and a 164% increase in PAT, although its shares have declined by 18% year-to-date.
One 97 Communications, known for its Paytm platform, marked a significant turnaround with a PAT of INR225 crore compared to a loss of INR208 crore in the previous year, alongside a 20% revenue growth. Nykaa also showed resilience with a 3% return in 2026, reflecting a cautious investor sentiment.
Struggling Companies
Conversely, several companies faced challenges. EasyMyTrip reported a mere 0.72% revenue growth, with PAT plummeting by 90.87%. Nazara Technologies experienced a 24% decline in revenue and a 37% drop in PAT, resulting in only a 1% return this year. Just Dial's shares fell by 13%, despite modest revenue growth of 6%.
Swiggy and FirstCry continued to report widening losses, even as their revenues grew by 54% and 12%, respectively. Newer entrants like Lenskart Solutions, however, showcased a remarkable 6,983% increase in PAT, aided by a low base effect.
Market Outlook and Analyst Recommendations
Despite the mixed results, analysts remain optimistic about certain stocks. Brokerages have expressed support for companies like Paytm and Groww, citing improving fundamentals and long-term growth potential. Nuvama has revised its target for Paytm upwards, reflecting a positive outlook on growth and profitability.
Criticism and Concerns
Critics have raised concerns about the sustainability of growth among internet companies, particularly those reporting widening losses. The pressure on profitability, especially in sectors like travel and e-commerce, has led to skepticism regarding future performance. The overall sentiment in the market remains cautious, with investors closely monitoring the evolving landscape.
Verbatim Quotes
The contrasting performances of India's internet companies in Q3 2026 highlight the complexities of the sector, where growth potential exists alongside significant challenges.
