This new-age stock is up 125% in 8 months; nears IPO price after over 3 yrs

CarTrade Tech share price today hit an over three-year high of Rs 1,618, its highest level since September 2021

Shares of CarTrade Tech, one of India's largest online classifieds and auto auction platforms, hit an over three-year high of Rs 1,618 on the BSE on Monday. The stock gained 3 per cent intraday, in an otherwise subdued market, on expectation of strong earnings. The stock of the smallcap company was trading at its highest level since September 2021.  

 

CarTrade Tech share price had hit a record high of Rs 1,610 on its debut day i.e. August 20, 2021. The company had raised nearly Rs 3,000 crore by allotting shares at an issue price of Rs 1,618 per share in the initial public offer (IPO).

 

Over the past eight months, the stock price of CarTrade Tech has more-than-doubled, appreciating 109 per cent from a level of Rs 717.75. It has bounced back 340 per cent from its record low level of Rs 341.05 which it hit on March 29, 2023.

 

CarTrade Tech is a multi-channel auto platform with its presence across all vehicle types and value-added services. The platform operates under several brands: CarWale, CarTrade, Olx India, Shriram Automall, BikeWale, CarTrade Exchange and Adroit Auto. These platforms enable new and used automobile customers, vehicle dealerships, vehicle OEMs, and other businesses to buy and sell vehicles in a simple and efficient manner. The platform got roughly 77 million average monthly unique visitors in Q2FY25 and, based on Q2FY25 annualised numbers, has 1.4 million listings for auction.

 

In the July to September quarter (Q2FY25), CarTrade Tech reported a remarkable financial performance, achieving the highest-ever quarterly revenue of Rs 172 crore. This was a 27 per cent growth year-over-year (Y-o-Y). This robust quarter-on-quarter performance resulted in a 44 per cent Y-o-Y increase in profit before tax. Earnings before interest, tax, depreciation and amortisation (Ebitda) grew 54 per cent; and margins improved 300bps to 21 per cent. Profit after tax (PAT) increased 6 times to Rs 30.73 crore from Rs 5.04 crore in Q2FY24.

 

On Wednesday, December 4, CarTrade Tech said the current festive season saw a strong revenue growth for the company. The company's asset light business model continues to set it apart, delivering consistent profitability. In Q3FY25, the company anticipates an approximate growth of 25-30 per cent in PAT over the previous quarter driven by strong operating margins.

 

Analysts at JM Financial Institutional Securities reiterate 'BUY' rating on CarTrade Tech with a March-2026 target price of Rs 1,655.

 

"CarTrade has seen a strong uptick since posting a reputable Q2FY25 result with the stock up over 40 per cent since result day. While increasing understanding of the company's business models and their growth drivers along with the operating leverage story justifies the uptick, it has caught further strength with the company twice sharing guidance on Q3FY25 – 30 per cent Y-o-Y growth in Consumer group and 25-30 per cent PAT growth sequentially," the brokerage noted.

 

While PAT growth guidance was in-line with the brokerage firm's estimate, a 30-per cent growth in New Auto vertical, considering the relatively muted auto sales environment, was a positive surprise.

 

Analysts expect these to drive sharp upgrades in consensus estimates. Furthermore, considering rising credibility of robust growth along with margin expansion, the brokerage firm has upgraded the valuation multiples for New Auto and OLX segment to 30x FY27E EV/Ebitda.