CarTrade Shares Tumble Over 18% After JM Financial Downgrades Rating To ‘Sell’

Update | September 10, 16:38

Shares of CarTrade closed the trading session 10.14% lower at INR 2455.65 today after plunging as much as 18% during intraday. 

The company’s market capitalisation stood at INR 11,690.36 Cr at the end of the session.

Original | September 10, 12:48

Shares of listed car reselling platform CarTrade crashed over 18% to INR 2,222.35 during the intraday trading on the BSE today. The sharp decline came after JM Financial downgraded CarTrade’s rating to ‘Sell’ from ‘Hold’. 

The stock pared some of the losses later in the day and was trading 8.5% lower at INR 2,498.70 on the BSE at 12:10. Its market capitalisation stood at INR 11,895.30 Cr (about $1.35 Bn) and more than 19 Lakh shares were traded till this time. 

JM Financial has a target price of INR 2,350 for CarTrade for September 2026, reflecting a 14% downside from its last close. The brokerage cited a mix of valuation concerns, reliance on cyclical B2B revenues, and growing competitive pressures from generative AI tools as the reasons for the downgrade, according to a report by Business Standard.

Although the company runs B2C platforms, the analysts noted that these offerings do not completely shield it from volatility in the B2B demand.

For the ‘New Auto’ segment, JM Financial said that “a demand boost post-GST cuts does not necessarily translate into a linear rise in revenue”. 

CarTrade’s New Auto segment has witnessed an average growth of 32.9% over the past three quarters. The analysts at the brokerage said that the surge came despite relatively subdued overall demand, driven by original equipment manufacturers’ (OEMs) ability to deliver vehicles consistently and normalised advertising expenses.

However, JM Financial expects a slowdown in growth ahead, noting that OEM advertising spend as a percentage of sales has returned to normal levels, and the GST-related benefits are unlikely to drive further gains.  “… New Auto segment revenue growth would return to early-twenties levels over the coming quarters,” the brokerage said. 

It also identified the rise of generative AI and its widespread adoption as a potential challenge for CarTrade. Surveys suggest that platforms like ChatGPT and Perplexity are diverting traffic from Google search, which drives the majority of users to auto portals. 

“These tools aggregate data from multiple websites and provide instant vehicle comparisons, specifications, and answers, which could impact the traffic to CarTrade’s platforms over time,” the report said. 

Founded in 2006 by Vinay Sanghi, CarTrade operates online marketplaces for new and used vehicles. Its platforms such as CarWale, BikeWale, Mobility Outlook and Shriram Automall, among others, facilitate buying, selling, marketing and financing of cars, two-wheelers, and commercial vehicles. The company expanded its offerings by acquiring multi-product classifieds platform OLX India in 2023. 

On the financial front, CarTrade saw its consolidated profit after tax (PAT) climb 106% to INR 47 Cr in Q1 FY26 from INR 22.8 Cr in the year-ago quarter, driven by increase in its top line and EBITDA margin. Sequentially, profit grew marginally from INR 46.1 Cr in Q4 FY25. 

The company’s operating revenue grew 22% to INR 173 Cr in Q1 FY26 from INR 141.5 Cr in Q1 FY25, driven by robust growth in the core consumer group business.