CarTrade Tech shares extend gains; Elara projects 43% upside potential

Shares of CarTrade Tech Ltd extended gains for the second straight session in Wednesday's trade, rising 4.36 per cent to hit a high of Rs 2,511. The stock, however, remains 8.82 per cent below its record peak of Rs 2,754 touched earlier this month on September 9.

Elara Capital has initiated coverage on the counter with a 'Buy' rating, projecting an upside potential of 42.97 per cent from the day's high of Rs 2,511.

According to the domestic brokerage, "CarTrade is well set to compound scale without stepping up customer acquisition cost (CAC). We expect MUV CAGR of 8.6 per cent and sold auction unit CAGR of 15.4 per cent in FY25-28E, deepening discovery and throughput. For OLX India, we forecast gross merchandise value (GMV) CAGR of 11.9 per cent, led by market-share gains of +330bps in used cars (from 63.2 per cent to 66.5 per cent) and +200bps in overall used goods (from 36.8 per cent to 38.8 per cent), in FY25-28E, widening monetisation through paid visibility, memberships, and cross-sell of finance, insurance and logistics services. With predominantly organic traffic, CAC is low. So, incremental revenue drives EBITDA margin expansion of 710 bps to 30.6 per cent by FY28E from 23.5 per cent in FY25."

On OLX India, Elara said: "Acquired in Aug-23 for Rs 530 crore (~1.5x sales), OLX India refocused on its profitable classifieds core, exiting the car transaction (CTX) business, doubling reach to 7.5 crore monthly unique visitors (MUVs) with 95 per cent organic traffic and keeping CAC minimal. This adds horizontal optionality in real estate and electronics alongside autos. Monetisation should scale up via paid visibility, pro-seller subscriptions and verified sellers, without step-ups in capex/CAC. Expect classified revenue and EBITDA CAGRs at 18.8 per cent/28.7 per cent in FY25-28E, lifting margin, with non-auto categories and a broader shift to digital ads aiding long-term growth."

The brokerage also highlighted that CarTrade is debt-free with Rs 750 crore net cash, enabling it to fund growth internally. "Through FY25-28E, expect PAT CAGR of 25.4% and the business to generate Rs 210 crore in cumulative free cashflow, supporting continued investment in technology, EV adjacencies, and expansion, while preserving capital efficiency and balance-sheet strength," it said.

Elara added, "CarTrade is a net cash company, reflecting category leadership, low-CAC economics, and a clear monetisation runway. Based on SoTP valuation and ascribing 60x to Consumer/Classifieds and 25x to Remarketing business, on one-year forward EBITDA, we arrive at a TP of INR 3,590. At CMP, the stock trades at ~28.4x FY28E EV/EBITDA and ~39.7x FY28E P/E, leaving ample room for growth-led re-rating. Initiate with BUY. Key risks are slower monetisation at OLX, execution challenges in integration, and auction cyclicality."

Separately, CarTrade Tech on Tuesday announced that its consumer platforms -- CarWale and BikeWale -- recorded their highest-ever single-day traffic. "Traffic surged to an all-time peak, registering a 74 per cent growth compared to the first day of Navratri last year and a 60 per cent increase over the August 2025 daily average. The extraordinary spike highlights the combined impact of festive season demand and the recent GST rate cut, which has enhanced affordability and lifted consumer sentiment across the automobile sector," the company stated.