B&K initiates coverage on CarTrade with 'buy' rating; ups target price to Rs 1878 per share 

cartrade

Brokerage B&K has initiated coverage on CarTrade Tech with a buy rating and increased its target price to Rs 1878 a share from its current market price.

"We believe that CarTrade is a classic non-linear business which has growth longevity; SAMIL business being ripe to benefit during economic pains; a cash cow and lastly the means to re-invest that cash. We undertake a DCF-based valuation, implying 40x FY27E P/E with a target price of Rs 1,878. The stock trades at 47x/33x FY26/27E P/Em" said CarTrade in its note.

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B&K says CarTrade began as an automobile classifieds portal and grew into a market leader through strategic product development, granular data, dealer-focused investments, and acquisitions. Its remarketing arm dominates vehicle auctions, generating robust cash flows. The acquisition of OLX India strengthened CarTrade’s foothold in new and used vehicle markets while introducing horizontal opportunities in non-auto segments.

With three cash flow streams, CarTrade has achieved consistent profitability since FY18, with a 15% revenue CAGR from FY19–24, CFO/EBITDA at ~83% (FY21–2HFY25), and cash reserves of Rs8.3 billion post-OLX acquisition. Its strength is evident in ~47 million monthly active users (93% organic), it said.

B&K said CarTrade’s inventory-free model ensures steady cash flows, reserved for strategic opportunities like OLX India. Known for enabling transactions across 12 sub-verticals, OLX is a recognized brand for used products and attracts diverse user cohorts. By shutting down loss-making ventures, CarTrade leverages OLX India’s potential to drive exponential growth and expand into new sub-verticals.