Cars24 registered marginal growth in revenues in FY23

Data sciences, AI, and other tech is helping Cars24 lower manual hours and instead increasing productivity across the board.

Cars24, the used car platform, saw its revenues increase from Rs 5,136.5 crore in FY22 to Rs 5,535 crore in FY23, a marginal growth of 7.8 percent year-on-year (YoY), on the back of improved gross margins. The Gurugram-based unicorn had a gross margin of 3 percent in FY22, which improved to 11 percent in the financial year which meant Cars24 earned more money on each car it bought and sold through its platform.

Along with the minimal growth in revenues, SoftBank-backed Cars24 also saw its losses widen from Rs 248 crore in FY22 to Rs 468 crore FY23 even as it reined in expenses like marketing, as per regulatory filings.

The company has however said that its EBIDTA for FY22 has been adjusted by excluding one-off sale transaction (of Rs 845 crore) of Intellectual Property to Singapore parent company. Considering the adjustment, Cars24's net loss was Rs 1,093 crore in FY22.

“Both growth and profit are priorities right now. There has been strong growth in FY24 so that has been our top priority for now. However, given the times we are in, we cannot ignore our costs. We are taking steps to ensure our bottom line is healthier by reducing operating expenses,” said Gajendra Jangid, co-founder of Cars24 told Moneycontrol.

“FY24 is looking better than FY23, we should turn profitable in the coming years, but I wouldn’t want to give a specific timeline to that goal,” Jangid added.

That was despite Cars24 telling Moneycontrol that it is "almost profitable" in November 2022. 

The fresh comments come at a time when Cars24’s total expenses have reduced 3 percent from Rs 6,256 crore in FY22 to Rs 6,058 crore in FY23, helped by cost cuts across the board.

In May 2022, the company exited markets like Indonesia and Saudi Arabia which helped lower some costs. Rest of the expenses were lower primarily because of a reduction in employee-related expenses. Employee costs were down 13 percent from Rs 548 crore to Rs 478 crore during the period, filings showed.

In July 2022, Cars24 had nearly 9,000 employees as per reports but that count had now reduced to over 6,000. In May last year, the company had fired 600 staffers in a cost-cutting drive.

Data sciences, AI, and other tech was helping Cars24 lower manual hours and instead increasing productivity across the board, per Jangid.

“We realised a little late that our business is very human intensive. So, in hindsight, we would have liked to leverage automation earlier than we did in our journey. That was a key learning for us in FY23,” Jangid said while adding that there were no job cuts because of automation.

Founded in 2015 by Vikram Chopra, Gajendra Jangid, Ruchit Agarwal, and Mehul Agarwal, Cars24 runs a technology platform where consumers can buy, sell and finance used cars. The company has raised over $1.4 billion was last valued at over $3 billion.