Slow Auto Sales To Augur Well For This Used Car Player — Stock Target Price Hiked
CarTrade reported a 34.1% sequential jump in its net profit to Rs 30.7 crore in the second quarter of the current financial year.
(Representative image. Source: Jason Briscoe/ Unsplash)
CarTrade Technologies Ltd., the online classifieds and auto marketplace platform, is set to be the key beneficiary of slowing auto sales in the country, Nomura said while it hiked its target price.
The auto platform reported a 34.1% sequential jump in its net profit to Rs 30.7 crore in the second quarter of the current financial year. Revenue for the company rose to Rs 154 crore against Rs 141 crore in the previous quarter.
Operating income, or earnings before interest, taxes, depreciation, and amortisation, rose 50.8% to Rs 32.6 crore. The Ebitda margin expanded to 21.2% from 15.3% in the same period the previous year.
Auto segment—45% of revenues—will be the key focus area in the near term and non-auto will be a longer-term driver, the brokerage said in a report on Oct. 28.
Nomura maintained about 20% revenue CAGR in the financial year 2024-27 for consumer business by higher spending by dealers given high new vehicle inventory. Nomura retained its 'buy' target with a target price of Rs 1,278 per share, up from Rs 1,042 apiece earlier, implying an upside of 30% from the previous close.
The standalone consumer business saw sustained organic traffic and revenue growth accelerated, Citi Research said in a note on Oct. 28.
Robust consumer traffic trends, cost-controls across the three verticals and commentary on near-term monetisation opportunities in Olx India were other positives, Citi said. It raised its Ebitda estimates for the current fiscal up by 19% on operating leverage and lower costs.
The remarketing business multiple raised to 15 times enterprise value to adjusted Ebitda versus 12 times earlier led by a pick-up in auction volumes, Citi said. It retained its 'buy' rating with a target price of Rs 1,232 per share, up from Rs 1,075 apiece earlier, implying an upside of 18% from the previous close.
The stock rose as much as 9.35% to a two-year high of Rs 1,074.2 per share after the company reported its second-quarter earnings. It has risen 53% during the last 12 months and has advanced by 46% on a year-to-date basis.
Four out of the five analysts tracking the company have a 'buy' rating on the stock, one has a 'sell', according to Bloomberg data. The average of 12-month analyst price targets implies a potential upside of 4.9%.
