31-01-2025
CarTrade Tech Ltd (BOM:543333) Q3 FY25 Earnings Call Highlights: Record Revenue and Profit ...
Revenue: INR193 crores for Q3 FY25.
Profit After Tax: INR46 crores for Q3 FY25.
Revenue Growth: 32% increase for the nine months of FY25.
EBITDA Growth: 100% increase for the nine months of FY25.
Consumer Group Revenue Growth: 38% year-on-year for Q3 FY25.
Consumer Group Profit After Tax Growth: 172% for Q3 FY25.
Consumer Group Margin: 35% for Q3 FY25.
Remarketing Business Revenue Growth: 28% for Q3 FY25.
Remarketing Business Profit After Tax Growth: 178% for Q3 FY25.
OLX Profit Growth: 80% for Q3 FY25.
Adjusted EBITDA: INR70.2 crores for Q3 FY25.
Cash Balance: INR885 crores.
EBITDA Margin: 28% for Q3 FY25, up from 18% last year.
Stand-alone Revenue Growth: 38% for Q3 FY25.
Stand-alone EBITDA Growth: 237% for Q3 FY25.
Stand-alone PAT Growth: 70% for the nine months of FY25.
OLX Revenue Growth: 16% for Q3 FY25.
OLX EBITDA Growth: 24% for Q3 FY25.
OLX PAT: INR14.68 crores for Q3 FY25.
Warning! GuruFocus has detected 5 Warning Signs with BOM:500410.
Release Date: January 29, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
CarTrade Tech Ltd (BOM:543333) reported record-breaking revenue of INR193 crores and a profit after tax of INR46 crores for Q3 FY25.
The company's revenue surged by 32% for the nine months, with EBITDA growing by 100% and profit after tax reaching INR99 crores.
The Consumer Group business, including CarWale and BikeWale, saw a 38% year-on-year revenue increase, with a profit after tax growth of 172% and a 35% margin.
Remarketing business experienced a 28% growth in revenue and a 178% profit after tax growth, indicating a recovery from previous sluggish quarters.
OLX India, acquired last year, showed an 80% surge in profits, with continuous quarter-on-quarter growth since acquisition.
Despite strong performance, the company faces challenges in maintaining the high growth rate in the Consumer Group business, as future market conditions remain uncertain.
The remarketing business, although recovering, had previously experienced sluggish growth, indicating potential volatility in this segment.
There is a concern about the sustainability of the current high growth rates, particularly in the Consumer Group, as OEM ad budgets may not continue to grow at the same pace.
The integration and optimization of OLX India are still in progress, with significant work needed to fully realize its potential.
The company's growth is partly dependent on favorable market conditions, such as supply exceeding demand, which may not persist in the long term.
Q: Can you comment on the growth rate in the consumer group business and whether this acceleration is expected to continue? Have you taken wallet share from competitors? A: The industry has seen minor growth, with supply exceeding demand, creating favorable conditions for our consumer group businesses. OEMs and dealers rely more on our platforms, and we expect these conditions to persist. While it's early to confirm wallet share gains, increased advertising spend and traffic growth suggest we may have captured some share. - Vinay Sanghi, Executive Chairman and Managing Director
Q: The remarketing business shows solid growth. Is this due to repossession improvements or broader factors? A: Repossession has grown and is a significant driver, contributing to about half of our volume. This growth seems sustainable, though it's hard to predict long-term trends. - Vinay Sanghi, Executive Chairman and Managing Director
Q: Regarding the OLX business, what is driving the recent revenue growth, and do you expect this to continue? A: Initial efforts focused on platform stability and integration. Recent growth stems from early initiatives in sales, product marketing, and traffic. We aim for stronger revenue growth in the coming quarters, leveraging opportunities in both auto and non-auto segments. - Vinay Sanghi, Executive Chairman and Managing Director
Q: What are the expected steady-state EBITDA margins for the consumer business? A: We anticipate margins will increase as revenue grows. Current margins are around 35%, and we expect them to rise with further revenue growth. - Vinay Sanghi, Executive Chairman and Managing Director
Q: How are you leveraging the integration of CarWale and OLX in the used car market? A: Both platforms have distinct strengths and customer bases. CarWale is strong in larger cities and higher-value cars, while OLX has extensive coverage in smaller towns and lower-value cars. We focus on backend integration to streamline dealer operations across both platforms. - Vinay Sanghi, Executive Chairman and Managing Director
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
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