Now, they have given more details on acquisition. It’s not that bad as it also include whole OLX classified (buy- sell for all other items than cars) so tech and products are good but I have only one questions after years of trying to make this work (if i remember correctly OLX has invented whole buying selling of second hand things (Olx (OnLine Exchange) was founded around 2006 as per google) and still revenue is only 177 crs (though 111 crs profit before product and tech cost) and it had one of the best backer of tech company (Prosus) and still they could not scale much. Now current management did not build most things as they have acquired most of the business.
They have also schedule concall on Monday for the same. Not sure if this has been planned after mail or they were planning to do it after closing transactions.
I believe that in the backdrop of cash pile in their books, OLX Acquisition is the best bet from available options. OLX Classified is highly profitable. If the company succeeds in reducing the cost of C2B Transactions as they have fully focused on it, it might be a great value addition for Cartrade. However, it will be clear only in next few quarters.
We wish to inform you that our shareholdings in the Company have increased to 3,395,611 shares, representing 7.193% of the capital of the Company as at 30 September 2024.
You must be realizing via MoM Car/Vehicle numbers being reported by Indian OEMs
It does mean that used car cycle has bottomed out. Historically, when OEMs / new cars are peaking then used cars start doing well.
Globally, digital ad spends are ~45-50% whereas in India, it is still at ~15% hence a lot
of potential to grow.
CarTrade generates 85-90% of traffic organically. Rest 10-15% is via performance
marketing.
In Consumer business, 85% of revenue comes from New cars in which OEMs contribute
~65% and Dealers contribute ~35% whereas Used car revenue is 15% of total
consumer segment revenue.
The repossession business has bottomed out and in the next couple of quarters SAMIL
should deliver reasonable performance.
OLX has a robust brand recall with customers across different city tiers driving organic
traffic to the platform. Also, OLX has limitless TAM as it basically handles all used
products in India. It’s the number one or leading place where any consumer can sell a
used product or buy a used product. OLX now holds a monopolistic position in preowned classifieds with the sector.
Some months back I tried to sell my used couch in OLX and quickr. All I got were scam calls that too some 10 calls within 30 min. I would never go back to these platforms which could not curb scamsters.
Cartrade tech announced milestone achievement in unique user visits in Carwalw, Bike wale and OLX.
The interesting part is they are projecting 25-30% PAT growth QoQ …
Amazon Autos started its journey in USA. Currently tie up with Hyundai but more maker in pipeline. But looks like Amazon Autos is starting with bigger scope and features like trading your old car for a new one. Probably they will keep it close to USA to tune in the model.Definitely it will hit Indian shore if successful in USA and will directly compete with CarTrade’s platforms.
Let them atleast prove this model in their home turf. Plus model is also a Proof of concept. If this succeeds then we can see Cartrade being the early adopter
The EV sales would be very minimal as the total penetration of ev’s in general is very low.
Although the duty hike is 6% it would be directly transferred to the customers not impacting the business as such . Also majority of revenue of cartrade comes from advertising and not second hand sales . Technically stock recovered well despite the decision showing strength so i assume there won’t be much impact in near future.
Disc - invested and biased
Cartrade has done really well recently and it hovering around the IPO times, The auto sector is plagued with high inventory at dealerships.
With this kind of sectoral background, the ad spends should rise and likely help Cartrade to a large extent. Other unlisted peers are also looking to IPO which would mean Cartrade might end up doing nicely around the news of the IPO or funding rounds too. We have seen the same template play out with Zomato and Swiggy too.
Olx marketplace is also a niche brand value of its own. Don’t think the Cartrade is out of steam and infact imo it might just surprise with the kind of platform growth it can generate if they just keep their head down and focus on plugging in the inefficiencies
