As there is no thread created so far, I’ve decided to make one on CarTrade.
CarTrade Tech Ltd is a multi-channel auto platform provider company. The company operates various brands such as CarWale, CarTrade, Shriram Automall, BikeWale, CarTradeExchange, Adroit Auto, and AutoBiz. The platform connects new and used automobile customers, vehicle dealers, vehicle OEMs, and other businesses to buy and sell different types of vehicles. The company offers a variety of solutions across automotive transactions for buying, selling, marketing, financing, and other activities.
Business and their Brands
1) CarWale and CarTrade
Car shoppers can visit CarWale and CarTrade platforms to research and connect with dealers, OEMs and other partners to sell and buy cars from the large variety of new and used cars offered by them. In addition, they engage in financing and automotive ancillary companies to offer their products and services on CarWale and CarTrade.
2) Bike Wale
Customers looking for new and used two-wheelers can research and connect with dealers, OEMs and other partners on BikeWale to sell and buy two-wheelers from the large variety of new and used two-wheelers offered by them.
3) Shriram Automall
Shriram Automall, facilitates sales of pre-owned cars, two-wheelers, commercial vehicles, four-wheelers, and farm and construction equipment.
4) Adroit Auto
Adroit Auto offers vehicle inspection and valuation services used by insurance companies, banks and other financial institutions.
5) CarTrade Exchange
CarTrade Exchange is an online auction platform and a used vehicle enterprise resource planning tool. It is used by consumers, business sellers, dealers and fleet owners to sell vehicles to automotive dealers and fleet owners. Automotive dealers also use CarTrade Exchange to manage their processes for procurement, inventory management and customer relationship management .
AutoBiz provides new car dealers a CRM solution to manage their customers in an efficient manner.
- A leading platform for Automotive Sales with a Synergistic Ecosystem.
- Strong Brands and Superior Customer Experience Driving Powerful Network Effects
- Asset light business model (97% of the auto malls are leased out)
- A comprehensive range of services i.e. automotive buying, selling, financing, marketing, etc.
- Proprietary End-to-End Technology Platforms
- Focus on Data Science to Provide Superior Solutions
- Profitable and scalable business
- Increase in competition among automotive digital platforms
- Investment by OEMs and/or dealers in their own digital platforms
- Reduced ownership of vehicles and increasing dependence on ride sharing services
- Fraudulent behavior of sellers and buyers who list their vehicles on its platforms
- Disruptions, failures or breaches of the technology platforms
- Continuing impact of the currently ongoing Pandemic
- Theft or damage of vehicles at their auto malls
- Dependency on third-party service providers for many aspects of their business
- Goodwill is roughly 50% of their current net-worth and maybe impaired due to poor operating results in the future
- Inability to acquire, use and maintain its domains and trademarks
CarTrade clearly specified that they don’t have an identifiable promoter group. The existing investors have sold 40% of their stake in the IPO.
The valuations are on the higher side, currently priced at 73 PE ( adjusted PE is 270 without the impact of deferred tax credits)
Vinay Vinod Sanghi is the Chairman, Managing Director and the Chief Executive Officer of the Company. He was appointed as the Chief Executive Officer of the Company on September 1, 2009. He has previously been associated with Mahindra First Choice Wheels Limited and Project Automobiles (Bombay) Private Limited. He has over 30 years of experience in the automobile industry.
Aneesha Menon is the Executive Director and Chief Financial Officer. She is a Chartered Accountant and has 13 years of experience in the field of Finance. She was previously employed with S.R. Batliboi & Co. LLP (audit member firm of Ernst & Young).
Victor Anthony Perry III is a Non-Executive Director of the Company. He holds BSC. in Civil engineering from the University of Virginia and an MBA from Harvard University. He was previously the president and chief executive officer of TrueCar, Inc.
- Biggest positive is it is the only company which is profitable in the Auto platform business.
- Can dominate in the auto platform business due to the expected growth in the Auto sector in the coming 3-5 years.
- It can continue to trade at high valuations due to the nature of platform businesses.
Disc:- Already invested in the company