CarTrade Hits Fresh 52-Week High; Shares Up Over 47% YTD

Shares of auto marketplace CarTrade Technologies rallied as much as 2.7% during the early trading hours on Monday (October 16) to touch their 52-week high of INR 700 on the BSE.

This was the fifth consecutive session of gains for the stock, which has rallied 13% since last Tuesday. 

Though CarTrade shed some of its gains later in the day today and ended the trading session 1.3% higher at INR 690.05 on the BSE, the stock is trading over 47% higher year to date (YTD).

The uptrend in the stock is in line with the rally in other new-age tech stocks, such as Zomato, Paytm, and PB Fintech, following last year’s bloodbath, due to their improving bottom lines. 

In fact, CarTrade reported a profitable FY23, posting a consolidated net profit of INR 40.43 Cr as against a net loss of INR 121.35 Cr in the prior fiscal year.

In Q1 FY24, its profit after tax (PAT) jumped 300% year-on-year (YoY) to INR 13.5 Cr.

Meanwhile, CarTrade’s recent acquisition of OLX’s India business has also provided a major boost to the share price. 

Though its shares declined temporarily following the announcement of the acquisition, CarTrade has gained over 25% since the end of August this year. Currently, the shares are trading at a level last seen in September 2022.

As per JM Financial, CarTrade’s standalone business is expected to grow about 9% sequentially and about 26% YoY in Q2 FY24 given the sustained strength in new auto sales.

However, following the OLX acquisition, CarTrade’s consolidated numbers are expected to take a hit due to losses in OLX’s transaction business. But these losses are expected to decline sharply in the coming quarters, the brokerage said.

It also forecasts CarTrade’s adjusted EBITDA margin (excluding ESOP expenses) to decline sequentially by 798 basis points (bps) to 3.8% in Q2 due to the incorporation of OLX business in its books. 

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