CarTrade Shares Slump 4% In Early Trade

SUMMARY

Despite the broader market slump in recent months dragging down most new-age stocks, CarTrade has delivered a stellar performance

The stock has delivered a positive return of 4.40% in last one month at its current market price

Looking at a broader timeframe, the stock has jumped 61.19% in the last six months and surged 114.78% over the past year

Shares of online classifieds and auto auction platform CarTrade slumped as much as 4% to INR 1476.65 apiece during early trading sessions on the BSE today (February 21).

The stock later trimmed some losses and was trading 3% lower at INR 1,491.00 at 10:53 AM.

At this point, CarTrade’s market capitalisation stood at INR 7,024.81 Cr with a trading volume of 1 Lakh shares.

On February 1, the stock peaked at its 52-week high of INR 1,834.95. Despite the broader market slump in recent months dragging down most new-age stocks, CarTrade has delivered a stellar performance.

While nearly every new age stock under Inc42’s radar has slumped by double digits in the past month, CarTrade has bucked the trend, delivering a positive return of 4.40% over the same period at its current market price.

Looking at a broader timeframe, the stock has jumped 61.19% in the last six months and surged 114.78% over the past year.

On the financial front, the company has consistently reported profits. It posted a consolidated net profit of INR 45.53 Cr in Q3 FY25, a significant turnaround from a loss of INR 23.55 Cr in the year-ago quarter. Sequentially, net profit soared 48% from INR 30.72 Cr in Q2 FY25.

The latest profit comes despite the company absorbing a one-time loss of INR 45.51 Cr after its subsidiary, Sobek Auto India, shut down its auto sales division (C2B business) due to unit economics challenges.

CarTrade currently has a price-to-earnings (P/E) ratio of 110.77 while its earnings per share EPS (TTM) is 13.46.

Despite such notable performance in the last year, the stock is down 3.8% at the previous closing price from its listing price of INR 1,600 on the BSE. It is pertinent to note that the CarTrade was listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) on August 20, 2021.

Brokerage firm Nomura maintained a buy rating on January 31 for CarTrade, raising its target price for CarTrade to INR 1,779 from INR 1,278. Another firm JM Financials reiterated a buy rating on December last year with a target price of INR 1,655.

It noted a significant uptick in the stock following its Q2 FY25 results and highlighted the company’s guidance for robust growth in the Consumer group and New Auto segments. Not to mention, CarTrade Tech’s acquired OLX India’s auto and classifieds business in August 2023.

Founded in 2009 by Vinay Sanghi and Rajan Mehra, CarTrade facilitates the sale of both new and used vehicles. It operates brands like OLX India, CarWale, BikeWale, CarTradeExchange, Shriram Automall, Adroit Auto, and Autobiz. It also provides technology solutions to OEMs and dealers.

CarTrade competes with major players like CarDekho, Droom, and CARS24 in India’s rapidly growing online automotive classifieds market. Except for CarTrade, its competitors like CarDekho, Cars24, Spinny, and Droom are still operating at a loss.

However, at least three of these unicorns preparing for IPOs. Droom is slated to go public by June 2025, while Cars24 and CarDekho are also gearing up to hit the stock market soon.