With this rise, the stock turned positive for 2024. Over the past 12 months, the company’s shares have doubled. The stock had fallen to an all-time low of ₹406 in May last year before rebounding.
However, despite this outperformance, the stock is among the worst performing IPOs since the pandemic and destructive of wealth for investors. The stock still remains 47% below its IPO price of ₹1,618.
CarTrade Tech’s shares were publicly traded in August 2021. The company operates an online marketplace for trading used cars.
For the March quarter, CarTrade Technologies recorded its highest ever revenue of ₹161 crore, a growth of 38% over the year-ago period. Net profit also grew 43% year-on-year to ₹25 crore.
The company also received its highest ever monthly average unique visitors for the quarter of 70 million, and over 92% of that traffic was organic.
“The acquisition of OLX India during this period has not only strengthened our leadership position and also paved the way for substantial synergies between OLX India, CarWale, BikeWale and Shriram Automall,” said Vinay Sanghi, Chairman and founder of CarTrade.
Brokerage firm Nomura retained its Buy rating on the stock with a price target of ₹982. The brokerage said the company’s margin improvement remains on track and expects free cash flow to improve strongly to ₹240 crore by FY2026, implying a free cash flow yield of 6%, which the brokerage says is attractive.
JM Financial characterizes CarTrade Tech’s risk-reward ratio as favorable with three very dynamic and highly profitable business segments. The company believes that the company is perfectly positioned to benefit from the increasing digitalization of the Indian automotive sector. He also maintained his ‘buy’ recommendation on the stock with a price target of ₹1,020.
However, Kotak Institutional Equities has a “sell” rating on CarTrade Technologies, with a price target of ₹530. It’s the only brokerage with a “sell” rating on the stock among the six that have coverage. The remaining five have a “buy” rating. However, none of them have a 12-month price target above the company’s IPO price. The 12-month consensus price target implies a potential upside of 6% from current levels.
On the charts, the stock has entered overbought territory with its relative strength index (RSI) now at 74. An RSI above 70 indicates that the stock is in overbought territory.
Shares of CarTrade Technologies ended 5% higher on Tuesday at ₹849.95. The stock also saw a block deal on Tuesday, during which the Sector Global Emerging Markets Fund acquired over 2.4 lakh shares at an average price of ₹854.93.
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