CarTrade zooms 9% to near 52-week high on robust Q4 results; stock up 110% in 1 year- Grow Mudra

CarTrade zooms 9% to near 52-week high on robust Q4 results; stock up 110% in 1 year

07 May , 2024 By : Debdeep Gupta

CarTrade Tech shares surged over 9 percent, extending the previous session's handsome gains. The 18 percent sharp spike in two days comes after the company on May 6 reported a net profit jump of 50 percent to Rs 22.5 crore for the quarter ended March 2024.

The company's revenue surged 51 percent YoY to Rs 145.27 crore, largely helped by OLX’s classifieds business.

CarTrade Tech operates an automotive digital ecosystem that connects automobile customers, OEMs, dealers, banks, insurance companies, and other stakeholders. The company owns and operates under several brands: CarTrade, CarWale, and AutoBiz.

Its EBITDA in Q4FY24 climbed 23 percent year-on-year to Rs Rs 49.11 crore and EBITDA margins expanded to 18.9 percent during the quarter under review.

At 9:42 am, the multi-channel auto platform's stock was trading 7.4 percent higher at Rs 870.80 on the National Stock Exchange (NSE). So far in the day, a total of 15 lakh shares of the company changed hands on BSE and NSE combined, compared to the 1-month average trading volume of 4 lakh shares.

JM Financial, in a report dated April 24, said that the stock remains underappreciated as investors have become disenchanted having burnt fingers considering the stock performance since 2021.

"Moreover, CarTrade’s business models and moats are yet to be understood by the investor community, necessitating the need to elaborate on them in greater depth," it said.

Analysts at JM Financial believe that CarTrade operates in an incrementally benign competitive landscape with levers in place to sustain 20-25 percent topline growth along with significant margin expansion potential.

The brokerage reiterated a 'buy' rating on the stock with a March 2025 target price of Rs 1,000, implying a 23.6 percent potential upside from the previous close. It expects the stock to further sustain 20-25 percent annualized compounding.

CarTrade Tech shares have a one-year beta of 0.4, indicating very low volatility. In the last year, the stock has delivered multi-bagger returns of 110 percent.

The stock has gained 20 percent so far this year, outperforming benchmark Nifty 50 which has risen around 3 percent during this period.