Wheels and deals turbocharged CarTrade Tech
(CARTRADE IN) is a multi-platform auto and classifieds marketplace, offering discovery, remarketing and value-added services. Its consumer portals , CarWale and BikeWale, anchor discovery, driving qualified leads. These leads are monetised through pro- seller and dealer memberships, advertising, and value-added services — abSure certified listings, finance, insurance, logistics. SAMIL (Shriram Automall) and CarTrade Exchange add auction fees.
Further, with the acquisition of OLX India, CARTRADE deepened its leadership in auto classifieds, adding India’s largest C2C audience and listings density, to drive lead generation and strengthen pricing power. This also opened up scaled non-auto categories (electronics, real estate), broadening monetisation without a step-up in customer acquisition cost (CAC). The combined reach is 75mn monthly unique visitors (MUVs), with 95% organic traffic, keeping acquisition costs low. So, for FY25-28E, we expect revenue/EBITDA/PAT CAGRs of 25.1%/36.7%/25.4% to INR 12.6bn/INR 3.8bn/INR 2.8bn. Initiate with BUY and a TP of INR 3,590.
Platform-led auto ecosystem scaling rapidly: CARTRADE is well set to compound scale without stepping up CAC. We expect MUV CAGR of 8.6% and sold auction unit CAGR of 15.4% in FY25- 28E, deepening discovery and throughput. For OLX India, we forecast gross merchandise value (GMV) CAGR of 11.9%, led by market-share gains of +330bps in used cars (from 63.2% to 66.5%) and +200bps in overall used goods (from 36.8% to 38.8%), in FY25-28E, widening monetisation through paid visibility, memberships, and cross-sell of finance, insurance and logistics services. With predominantly organic traffic, CAC is low. So, incremental revenue drives EBITDA margin expansion of 710bps to 30.6% by FY28E from 23.5% in FY25.
Scale optionality with profitable classifieds: Acquired in Aug-23 for INR 5.3bn (~1.5x sales), OLX India refocused on its profitable classifieds core, exiting the car transaction (CTX) business, doubling reach to 75mn MUVs with 95% organic traffic and keeping CAC minimal. This adds horizontal optionality in real estate and electronics alongside autos. Monetisation should scale up via paid visibility, pro-seller subscriptions and verified sellers, without step-ups in capex/CAC. Expect classified revenue and EBITDA CAGRs at 18.8%/28.7% in FY25-28E, lifting margin, with non-auto categories and a broader shift to digital ads aiding long-term growth.
Cash-rich, debt-free, asset-light platform: Debt-free with INR 7.5bn net cash, CARTRADE can fund growth internally. Through FY25-28E, expect PAT CAGR of 25.4% and the business to generate INR 2.1bn in cumulative free cashflow, supporting continued investment in technology, EV adjacencies, and expansion, while preserving capital efficiency and balance- sheet strength.
Initiate with Buy and a TP of INR 3,590: CARTRADE is a net cash company, reflecting category leadership, low-CAC economics, and a clear monetisation runway. Based on SoTP valuation and ascribing 60x to Consumer/Classifieds and 25x to Remarketing business, on one-year forward EBITDA, we arrive at a TP of INR 3,590. At CMP, the stock trades at ~28.4x FY28E EV/EBITDA and ~39.7x FY28E P/E, leaving ample room for growth-led re-rating. Initiate with BUY. Key risks are slower monetisation at OLX, execution challenges in integration, and auction cyclicality.
