Why Growth Alone Doesn’t Ensure Value Creation | Quick ₹eads

by Karnivesh | 17 February 2026

Growth stories dazzle in India's stock market, but flashy revenue spikes often mask deeper flaws in capital use. Companies chasing top-line glory pour billions into expansions, only to erode shareholder wealth when returns lag costs. True value blooms when growth pairs with smart capital deployment, as seen in 2025's contrasting tales.

Paytm’s Payment Pitfall: When Scale Doesn’t Create Value

The story of Paytm is a cautionary tale of how growth alone does not guarantee shareholder value. When Paytm went public in 2021, it was widely seen as the biggest beneficiary of India’s UPI revolution. In the years leading up to the IPO, revenues were growing at over 25% CAGR, user numbers were exploding, and digital payments were becoming deeply embedded in everyday commerce. Expectations were sky-high.

By FY24, Paytm’s revenue had indeed climbed to ₹5,775 crore, up 26% year on year, driven largely by merchant payments and financial services distribution. On the surface, the business appeared to be scaling well. However, underneath this growth lay a structural problem: capital efficiency. Regulatory interventions especially around payments banking and compliance disrupted key revenue engines, while returns on invested capital remained stubbornly below the cost of capital.

Even when operational metrics improved, value creation did not follow. Q1 FY26 marked a psychological milestone as Paytm reported positive EBITDA of ₹72 crore, translating into a modest 4% margin, supported by a 38% YoY rise in revenues. Yet this progress was overshadowed by continued net losses, including a ₹292 crore loss in Q2 FY24, and persistent cash burn. The core issue was that Paytm’s ROIC consistently trailed its WACC, meaning that every incremental rupee of growth destroyed shareholder value rather than creating it.

The result was brutal market repricing. From its post-IPO highs, the stock collapsed nearly 80%, reflecting investor realisation that scale without profitability discipline can magnify losses just as quickly as it magnifies revenues. Paytm’s journey illustrates a classic growth trap: when capital is cheap, expansion looks impressive; when scrutiny rises, weak economics are exposed.

Adani Enterprises: Growth Powered by Leverage

If Paytm’s problem was inefficient capital, Adani Enterprises represents the opposite risk aggressive leverage in pursuit of scale. As the flagship incubator of the Adani Group, the company sits at the centre of India’s infrastructure push, spanning airports, green energy, roads, data centres, and new-age industrial platforms.

In FY25, headline revenue growth appeared muted, inching up just 2% to ₹1,00,365 crore. But this masked a much stronger operational performance beneath the surface. EBITDA surged 26% to ₹16,722 crore, driven by airports and solar manufacturing, while incubation businesses such as Adani New Industries Limited (ANIL) delivered exceptional growth. ANIL alone recorded a 63% jump in revenue to ₹14,236 crore and a stunning 108% increase in EBITDA to ₹4,776 crore, underscoring the earnings potential of the group’s newer verticals.

On paper, profitability metrics looked impressive. ROCE of 25.6% and ROE of around 28% placed Adani Enterprises among the stronger performers in capital-intensive infrastructure. However, these returns came with a rising financial risk profile. Debt-to-equity climbed to 1.65 from 1.45 the previous year, reflecting continued reliance on borrowing to fund expansion. Group-level leverage became a focal point of concern after the Hindenburg episode, during which market capitalisation across Adani companies fell by over ₹2.37 lakh crore at its worst point.

The growth narrative remains compelling solar module sales grew 59% to 4,263 MW, and airport traffic continues to recover but the question investors now ask is sustainability. Infrastructure assets are sensitive to tariffs, regulation, and financing costs. If cash flows disappoint or policy assumptions change, high leverage can quickly turn from an accelerant into a constraint. Adani Enterprises thus sits at a crossroads: operational momentum is strong, but balance sheet risk demands careful monitoring.

Zomato’s Balanced Breakthrough: Scaling with Discipline

In contrast to both Paytm and Adani, Zomato offers a rare example of high growth paired with improving economics. Once criticised for burning cash to chase market share, Zomato has gradually reshaped its model around contribution margins, operational efficiency, and capital discipline.

FY24 marked a turning point. Gross order value (GOV) across B2C businesses surged 48% to ₹47,918 crore, while adjusted revenue jumped 56% to ₹13,545 crore. Food delivery, still the core business, grew at a healthy 23% GOV, but the standout performer was quick commerce. Blinkit expanded aggressively, with GOV up 93% and store count reaching 526, reflecting strong consumer adoption and improved execution.

What truly differentiated Zomato, however, was its path to profitability. Adjusted EBITDA swung to a positive ₹372 crore from a loss of ₹783 crore the previous year, and the company reported a PAT of ₹351 crore its first full-year profit. Contribution margins improved meaningfully, with food delivery margins rising to 6.9% and quick commerce turning positive at 2.1%. These gains indicated that scale was now enhancing, rather than eroding, returns.

The market rewarded this shift. Despite ongoing volatility, the stock rose around 68% over the year, reflecting confidence in Zomato’s ability to grow without sacrificing unit economics. Strategic choices such as expanding EV delivery fleets, improving logistics density, and tripling Zomato Gold membership to 7.4 million strengthened customer loyalty while controlling costs. Zomato’s experience highlights a powerful lesson: growth creates value only when paired with discipline.

Bajaj Finance: The Power of Relentless Efficiency

If Zomato represents a successful transition story, Bajaj Finance exemplifies consistency. Unlike platform businesses chasing profitability, Bajaj Finance has long operated with a clear focus on returns, risk management, and funding efficiency.

In FY25, assets under management grew 26% to ₹3.3 lakh crore, while revenue increased by 25%, reflecting strong demand across consumer, SME, and rural lending. Even as competition intensified and margins faced pressure, the company maintained a healthy ROIC well above 15%, comfortably exceeding its cost of capital. Although ROE moderated slightly to around 17% from 19%, it remained among the highest in the sector.

A key differentiator is Bajaj Finance’s liability structure. Access to low-cost deposits and a well-optimised debt-equity mix gives it a structural advantage over peers dependent on wholesale funding. Net profit of ₹15,560 crore in FY25 reinforced its status as a compounding machine, while steady dividends underlined management’s confidence in cash generation.

Over the past three years, the stock has roughly doubled, demonstrating how high-quality, capital-efficient growth can consistently reward shareholders even without headline-grabbing expansion rates. Bajaj Finance proves that in the long run, efficiency and discipline trump raw volume growth.

The Bigger Lesson

Together, these four stories underline a simple but often ignored truth: growth is not value creation unless capital works hard. Paytm shows how scale can destroy value if returns remain subpar. Adani Enterprises highlights the fine line between ambitious growth and balance sheet risk. Zomato demonstrates how disciplined execution can transform a loss-making model into a profitable one. Bajaj Finance stands as proof that compounding quietly, with high ROIC and prudent leverage, is often the most reliable path to wealth creation.

In markets obsessed with growth, it is capital efficiency not just expansion that ultimately separates winners from disappointments.

Growth Traps Exposed

India Inc's 2025 sales leaders: Bharti Airtel +25% (₹1,25,125 crore), Bajaj Finance +22% (₹62,969 crore). But Coal India (6.97% yield) sales dipped -1.48%; ONGC -0.93% despite ₹1,60,253 crore revenue.​

EVA studies show EVA-reporters boost performance via ROIC focus leverage drives value only with discipline. Paytm's woes: Losses despite growth; Adani's ambition risks debt spiral if cash flows lag.

Zomato flipped FY23 losses (-₹971 crore PAT) to profits via margin expansion (adjusted EBITDA + from -₹783 crore). Dixon Tech's 39.95% ROCE pairs 28.79% sales growth.

Metrics That Matter

ROIC = NOPAT / Invested Capital gauges efficiency; >WACC creates value. Growth sans it erodes equity Paytm's capex burned ₹12,872 crore cash despite pivots.​

Bajaj's 17% ROE sustains compounding; Adani's 28% tempts but debt (₹12,681 crore) looms. Nifty firms average ROE 15%, but top like Ashoka Buildcon 54% blend growth/returns.

Sustainable Value Blueprint

India's $5 trillion quest favors allocators over expanders. Zomato's 71% revenue jump to ₹12,114 crore with profitability signals win; Paytm's 32% chase falters without.

Investors: Scrutinize ROIC trends, debt loads. Growth headlines lure, but value endures via capital wisdom from Adani's infra bets to Bajaj's lending master