- The consolidated business of the CarTrade Tech business consists of the Standalone consumer group businesses like Carwale, Bikewale and CarTrade.com. The business also contains other operations such as abSure, One-Click Purchase and Auto Finance.
- There is also the remarketing business which comes under the consolidated umbrella. These businesses are Shriram Automall, CarTrade exchange and Android Auto.
- The consolidated business revenue stood at Rs. 115.9 crores, registering a YoY growth of 13.3% and QoQ growth of 13.1%.
- The company reported an operating profit of Rs. 10.6 crores for Q3FY23 registering a growth of 29.3%.
- The company reported a profit of Rs. 13 crores for this quarter where the profit almost grew by ~3.8x.
- The ESOP costs for this quarter were Rs. 7.35 crores as compared to 46.7 crores in Q3FY22.
- As per the company’s presentation, it is India's number 1 car and two-wheeler auto portal.
- Automalls and abSure outlets have reached 200+ physical locations.
- Average monthly unique visitors in Q3FY23 stood at 3.5 crores. Organic unique visitors for the company stood at 87.64% in the quarter.
- The company has a debt free balance sheet where the cash balance currently stands at Rs. 1,000 crores.
Earnings call Highlights
- Number of vehicles for auction stood at 2,68,506 units registering a decline of -17.7% on YoY basis and -11.9% on QoQ basis.
- The number of vehicles sold through the auction stood at 59,202 units registering a YoY decline of -18.5% and QoQ decline of -7.5%.
- Q3FY23 was a challenging quarter for the company.
- Remarketing business had a tough quarter which was primarily due to fall in supply of repossessed assets. Operating deleverage kicked in leading to decline in PAT during Q3FY23 by 74% on YoY basis and 35% in 9MFY23.
- Dealer share of the consumer business has increased to 38% where the OEM share stands at 62% during Q3FY23. New vehicle business was at 84% while the used vehicle business made up 16%. Used vehicle business had a substantial growth as it was 10% during Q3FY22.
- Marketing spends will not see dramatic change over next year as the management feels that the competition is strong and the spends will be similar. 12% of marketing spends can be a sustainable number.
- AbSure at 73 locations currently. The rule out is little low than expected as it is a conscious effort to get right locations, right franchise, right model and right customer experience. AbSure is part of the used car business and currently contributes small amount to the overall revenue.
- The growth of new cars business increased by 27% and used car business increased by 154% for 9MFY23 YoY and for Q3FY23 YoY it would 21% and 129% respectively.
- OEM growth is 22% and dealers is 50% growth for 9MFY23 on YoY basis.
- On the consumer (standalone) business the company monetizes the car manufacturers and dealers for the sale of new cars and used cars. The company monetizes them for advertising on as well transaction revenues which are very small in this part. On the auction side it charges transaction revenue from buyer and sellers.
- The company has been through the year where the car sales have grown by 25-28% in CY2022 and it has been strong year for new car industry and used car demand has also been good. The growth rates in future will be much lower than the 25-28%.
- Supply may be higher than the demand as there were shortages of car this year. This will be favourable as the dealers and manufacturers spend more on advertising to sell cars.
DISCLOSURES UNDER SEBI (RESEARCH ANALYST) REGULATIONS, 2014:
Yadnya Academy Pvt. Ltd. (InvestYadnya) is registered with SEBI under SEBI (Research Analyst) Regulations, 2014 with registration no. INH000008349.
Disclosure with regard to ownership and material conflicts of interest:
1. Neither Research Analyst nor the entity nor his associates or relatives has any financial interest in the subject Company;
2. Neither Research Analyst nor the entity nor its associates or relatives has actual /beneficial ownership of one per cent or more securities of the Subject Company, at the end of the month immediately preceding the date of publication of the research report or date of public appearance;
3. Neither Research Analyst nor the entity nor its associates or his relatives has any other material conflict of interest at the time of publication of the research report or at the time of public appearance.Disclosure with regard to receipt of Compensation:
1. The Research Entity and its associates have not received compensation from the subject company in the past twelve months.
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