Multibagger CarTrade Tech shares tumble 19%; add or avoid?

Shares of CarTrade Tech Ltd slumped 18.68 per cent in Wednesday's session to hit a low of Rs 2,222.35. The stock, however, pared some losses and was last trading 8.26 per cent lower at Rs 2,507.15. Despite the fall, the multibagger counter has surged 173.33 per cent over the past year.

Both BSE and NSE have placed CarTrade Tech under the long-term ASM (Additional Surveillance Measure) framework. Exchanges impose short-term or long-term ASM to alert investors about heightened volatility in stock prices.

The digital marketplace said the government's recent cut in GST on passenger vehicles, two-wheelers and used vehicles would improve affordability, boost consumer sentiment and spur transaction volumes in both new and used categories.

"The company's consumer platforms, CarWale and BikeWale, have seen a rise of over 25 per cent in traffic following the GST cut. With this tax benefit and the upcoming festive season, industry momentum is likely to strengthen further," it added.

On the technical side, some analysts pointed out that the stock looked weak on charts, suggesting investors should refrain from fresh entries at current levels.

Ravi Singh, Senior Vice-President of Retail Research at Religare Broking, said the stock looked weak and could slip further towards Rs 2,360, with Rs 2,480 acting as immediate resistance.

Drumil Vithlani, Technical Research Analyst at Bonanza, noted, "CarTrade Tech rallied strongly in the past month, moving from around Rs 2,000 to above Rs 2,600, before sharp profit booking hit today. Given the recent upmove and profit-taking, the risk-reward is not favourable for fresh entry. Short-term traders should avoid new positions until stability returns."