Refer the Asset side of the Balance Sheet to see the usage.
For an educated and independent judgment, look at the relevant note of the Income statement in the Annnual report of FY22.
Deven bhai… Caravana is in a similar field. But, with a fundamental difference. They are used car dealers. Whereas, Cartrade provides tech.
Caravan would invest in cars they’d want to sell, Cartrade doesn’t do that. It is an asset light model.
So, the revenue model is very different. Cartrade’s revenue comes from putting tech in place for online car dealers, sellers. They are a Platform as a service (PaaS).
One of their platforms facilitates sale of new cars as well (cartrade.com). There is one for car auctions etc.
What I like about this company is their asset light model.
Fixed Assets 1041 Cr
Intangible Assets 898 Cr
Net Fixed Asset only 143 Cr, against this they have generated revenue of 82Cr in June quarter alone. And I believe they are just getting started. Unique user growth YoY is 47% That I find very interesting.
They have cash reserves. I want to know what are their plans to invest this cash, and will it successfully add to the top line.
As per-capita income grows the used and new car market segment will grow. Cartrade Tech is the undisputed online leader. All we need to know is whether the management is astute enough to ride this wave.
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I have an habit to listen every concall in which I made an investment, and I’m regret to say experience with CarTrade concall is the worst till date. You never get acknowledgement from vinay towards investor community and most of the analyst question looking framed rather actual ask. I feel no benefit I’m getting by listening to this call, and the guy only mentions all of his business are in early stage, not sure what his plan with 2000 cr in books, he never nod for in organic growth, not for dividends, not for buyback. I must say, I’m eagerly waiting for pull pack on stock price to mid 700’s, thus, I feel exit with meaningful loss.
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Why is the stock falling from past so many days??
does anyone has any news regarding it?
My guess is the market did not like what they heard about their possible acquisition plans for GoMechanic. Also, accounting year-end tax selling could be a reason for such a fall. I think once there is clarity on their plans for cash management, there should be an upmove. Net assets - Cash on books + Land/building is ~1200 Cr. So effectively the core business is currently valued at ~500Cr! Unfathomable…
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Yeam hugely undervalued. I might be new but the market cap at this price is 1700 Crore i see.
Can you explain how is it 500 CR
So I just subtracted the net assets available on the balance sheet of Cartrade from the market cap (1700Cr-1200Cr) to find ballpark valuation of the actual business.
Sometimes valuing a company based only on market cap can be misleading. Do read about how to calculate enterprise value. It will help you a lot in your investing journey!
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It is not that strange, when company keeps a lot of cash in its books, market would start wondering what management will do with it (as assumption is that this business does not need much cash) and more often than not, they will misallocate though I do not have any proof. Just give you one more example, Just Dial (even after Reliance bought stake around 1025/share and became major shareholder >60%), it has 3800 crs and market value is 4800 crs but it has large business (before corona, it had operating profit 200 crs).
Thanks!
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Well they bought gomechanics and are looking to invest in other automobile ventures trhough car trade ventures.
this may be hoiw they are utilising their money.
No, they have clarified that no definitive decision has been taken to buy GoMechanic - only speculation. The venture arm announcement has been done previously as well - basically as a signal to the market that they intend to use some/all of the cash to acquire companies. The market, rightly so, are not too impressed by this intention as they believe Cartrade might make acquire companies that are not a good fit for the company or not accretive to its earnings.
IMO if Cartrade returns back atleast half of the 1000C of cash on their books to shareholders, that should provide some floor to the stock price and less anxiety to shareholders. They can then use the rest to make well considered acquisitions if need be or better yet, merge with one of their competitors who are not public yet and are facing difficulty raising cash.
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Good set of numbers for Q4!
Highlights:
Recorded highest ever quarterly revenue of Rs 116.60 crores in Q4 FY 23
Reported a consolidated net profit of Rs 17.49 crore for the fourth quarter ended March 2023. In the same quarter of last year, it posted a net loss of Rs 21.39 crore.
Adjusted PAT for the year ended March 31, 2023, stood at Rs 80 crore, logging a YoY growth of 42%. For Q4 FY23, the adjusted PAT stood at Rs 28.09 crore.
Large average monthly unique visitor base of 34 million of which 86% is organic.
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Honestly speaking stock is not going to re-rate unless we hear good commentary towards investor community; other income is the major addition in the balance sheet, and it is sitting idle from a long time, and they strictly said ‘No’ for dividend, buy-back, split, bonus, inorganic acquisition. You look at other cos which are bottom out from the listing price and management at least care about stock price and making promising comments. over and above this, the conference call is a big joke, everything is framed, they neither allow individual investors nor popular brokerages to ask questions.
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yep agreed they should do buybacks/dividends. They are not doing anything to boost shareholder confidence.
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https://entrackr.com/2023/05/why-did-cardekho-shut-down-used-car-retail-biz/
Cardekho is exiting Retail biz, Ola exited last year itself. Used car market is dominated by small dealers.
If Cartrade ‘absure’ can demonstrate technology driven benefits for these used car dealers, they can gain lot of market share.
Their Automall business has taken a temporary hit as the big jump in repossesed cars that was witnessed due to loan defaults in 2020/21 are waning back. Used car demand should likely normalise in 2023
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Carvana which is similar US based company has started deliverying profit, Cartrade has started making profits in last 4 quarters,
Profit each quarter is steadily increasing and Used Car platform seems to be stabilzing with likes of OLA and others moving out, Revenue wise company is growing at 20%+
Company is also almost debt free and i believe in Promoters vision for platform.
In the worlld of starts up where it has become fashion to burn cash and never become profitable, these guys are very conservative with cash burn and started making consistent profit.
Last but not the least, this company is very good candidate for Acquisition by likes of Tatas and Ambanis who can acquiring numerous starts up recently.
I feel this is the right time to buy the stock. What do you guys think?
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I completely agree. You need understand why company is making profit and others are not. Most of new age business has/had always choice whether to take profit and invest back in business. They can’t even provide any update abSure which they boasted as big thing for company (see latest investor presentation and you will not find much of detail about this). I have written numerous mail to their investment department and none of them got reply. I have included Warburg pincus mail ID to show them that how much unfriendly is this company towards minority shareholders.
Company just passed resolution to increase salary of MD and chairman and I do not see any reason for this hike, though they claim that they are growing and profitable company (but most of their profit comes from reserve of 11 Bn INR - if you just put FD at 7%, you can get 70 crs). He do not even come to any forum to clarify investor doubt T.V or any other format (I have see few interview of head of consumer business Banvari Lal Sharma and one interview of head of old car business - Mr. Sandeep) and they will keep issuing ESOP. Founder holds only 2%. It is my believe he thinks that it is not his responsibility to address company’s minority shareholder’s concerns/query as It was FPO and not IPO so no money came to company but he always boast about status of public company (that they are the first listed car trading platform).
Company’s investor presentation is worst - copy pasted financial statement and add Adjusted details to show good margin.
Just to give you one example, Laurus did concall when it acquired Richcore for 275 crs. This is company invest >500 crs (~ 20-25% of market cap) and not even single interview on any forum to explain rational for this. they did not give any thought to buyback itself. It is major reversal in terms of policy as they always mentioned that we are asset light business but I am not sure how they will keep this policy after OLX Auto acquisition so they should be forthcoming on this one but as usual no detailed communications by company.
Disc - Stuck since FPO - Have averaged and looking for exit.
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Appreciate honest inputs even though you both are looking for an exit. Just to give back to this wonderful community, I would suggest pls get views from some Technical Analysts as the chart pattern suggest atleast some short term upmoves so exit accordingly.
ESOPs vesting coming to an end could be the trigger… I dont track it closely enough
Carvana is a used car co that buys Used car inventory on own balance sheet, refurbishes and then sells to typically subprime buyers. They also give financing and then selldown those loans to investors of subprime loans.
Cartrade is not at all a similar business. CT runs new car research and discovery website and makes its revenues from ad sales and dealer leads. They also own Samil which is a used car yard business.
Recovery in Carvana has nothing to do with cartrade.
ESOP is not a as big issue as management. If I remember correctly, in on one ESOP grant - fair value is around 800-860 INR/ share so they had to book cost based on this. If stock price is itself comes down from that price than actually it less cost than what they have booked in PnL so in a way company was making a bit more profit than it had reported. In stock market, you have to nimble and always try to see what is value and price and difference between them. at around 350-400 it was good value (not great!) but after acquisition of OLX and as I do not have much information on the same so it hard to value. Last ESOP grant had exercise price was around 470 INR/ Share so at that price employee get the stock.
There is one more thing - if unallocated ESOP expires then company can change exercise price with shareholder approval so you want to keep this in mind.
Need more details on acquisition as they have spent almost an half of the reserve but at this moment they are saying that they can disclose after transaction close.
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