Summary
CarTrade Tech Limited - Q3 FY26 Earnings Call Summary Wednesday, January 28, 2026 4:00 PM
Event Participants
Executives 2 Aneesha Bhandary (CFO), Vinay Sanghi (CMD)
Analysts 8 Aditya Yadav, Amit Agicha, Anjali Bajaj, Arpit Shah, Deep Shah, Hardik Doshi, Nishit Jalan, Sachin Dixit, Shrenik Mehta, Siddhartha Bera, Vijit Jain
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Operating Revenue | ₹228 crores | +19% YoY; Highest-ever quarterly revenue in history. |
| Adjusted EBITDA | ₹101 crores | +50% YoY; First time crossing the ₹100 crore mark in a single quarter. |
| Reported EBITDA | ₹78 crores | +56% YoY; Margins expanded to 37% from 28% YoY. |
| Profit After Tax (PAT) | ₹62 crores | +35% YoY; Growth impacted by a ₹6.5 crore one-time labor code provision. |
| Consumer Group Rev | ₹108 crores | +27% YoY; Driven by new car industry growth and high SUV mix. |
| Remarketing Revenue | ₹58 crores | +12% YoY; Margins reached record 30% level. |
| OLX India Revenue | ₹61.7 crores | +18% YoY; Highest-ever revenue since acquisition; EBITDA up 70% YoY. |
| Cash Reserves | ₹1,145 crores | Stable cash position; business generates ~₹100 crore cash per quarter. |
| Average Monthly Users | 85 million | Maintains 95% organic traffic across all platforms. |
| Return on Equity (ROE) | 10.2% | Reached double digits for the first time in company history. |
Geographic & Segment Commentary
- Consumer Group (CarWale, BikeWale): This segment saw 27% revenue growth and expanded EBITDA margins to 43% (up from 35% YoY). Management attributed the performance to a structural shift from offline to digital advertising and a favorable product mix, specifically the surge in SUV sales which carry higher ARPU.
- Remarketing (Shriram Automall): Revenue grew 12% with a 68% jump in profitability. Management noted a temporary conversion lag early in the quarter due to new car price corrections (GST-led) impacting used vehicle valuations, but saw trends normalizing in December.
- OLX India: Since the acquisition, OLX achieved its highest quarterly revenue and a 37% EBITDA margin. Growth was balanced between the automotive and non-automotive categories (electronics, furniture, mobiles), with non-auto slightly outperforming in growth rate this quarter.
Company-Specific & Strategic Commentary
- Consolidated Subscription: The company launched a combined dealer subscription offering for CarWale and OLX to cross-leverage the dealer base and increase market penetration.
- Product Innovation: CarTrade is transitioning deeper into the user journey with products like “Elite Buyer” (OLX) and plans to launch “OLX Verified” and used car financing marketplaces in the coming quarters.
- M&A Discipline: Management confirmed they put the potential CarDekho acquisition on hold to focus on high-growth internal opportunities, incurring ₹1.8 crores in diligence costs during the quarter.
- AI Integration: The company established “CarTrade Laboratories” to build AI-driven tools for instant loan approvals, price discovery, and image recognition to enhance transaction trust and speed.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| OLX Revenue Growth | Expected Acceleration | Management guides for growth rates to exceed the current 18% in Q4 FY26 due to new product adoption. |
| EBITDA Margins | Continued Expansion | Operating leverage is expected to drive margins higher as costs remain stable while revenue scales. |
| Used Car Market | Recovery in 12-15 Months | Anticipated surge in used car demand following the lag in price adjustments relative to new car price cuts. |
| Capital Allocation | Inorganic/Shareholder Returns | Intent is to evaluate strategic acquisitions or eventually return excess cash to shareholders. |
Risks & Constraints
| Risk | Context |
|---|---|
| Price Volatility | Sharp reductions in new car prices (due to GST/policy) create temporary volume lags in the used car market as sellers adjust to lower asset valuations. |
| Competition | While dominant in traffic, the company must continuously innovate in “deep-journey” services (financing/verification) to prevent disintermediation by horizontal AI platforms. |
| Tax Headwinds | OLX has exhausted its carry-forward tax shelters, meaning future earnings will be subject to higher effective tax rates compared to previous periods. |
Q&A Highlights
Deepening the Used Car Journey
- Question: Are there plans for value-added services like financing or insurance? (Nishit Jalan)
- Answer: CarTrade is launching a fintech marketplace for used car financing with major banks/NBFCs. They will act as a marketplace only and will not take any balance sheet or lending risk. (Vinay Sanghi)
The Impact of AI
- Question: Is there a threat of disintermediation by Large Language Models (LLMs)? (Aditya Yadav)
- Answer: Horizontal LLMs only access public data. CarTrade holds private proprietary data on transaction intent and inventory. By offering deep integrations like 1-second loan approvals, the company provides utility that LLMs cannot replicate. (Vinay Sanghi)
Margin Trajectory
- Question: Can margins reach 50% plus in the next 2-3 years? (Nishit Jalan)
- Answer: The company has scaled margins from 9% to 37% over 12 quarters. Since incremental costs are flat, a significant portion of new revenue flows directly to EBITDA. (Vinay Sanghi)
Key Takeaway
CarTrade Tech delivered its strongest quarter to date in Q3 FY26, characterized by record revenues of ₹228 crores and a notable expansion in EBITDA margins to 37%. Each business segment—Consumer, Remarketing, and OLX—hit all-time highs in both revenue and profitability. The Consumer Group benefited from a robust 32% nine-month growth rate, driven by the digital ad spend shift and the SUV volume surge. Strategically, the company is pivoting toward “high-intent” products like Elite Buyer and dealer subscription bundles while maintaining a disciplined cash reserve of ₹1,145 crores. Management remains highly optimistic about Q4 FY26, guiding for accelerated growth in the OLX segment and continued margin expansion across the group as operating leverage takes full effect. The focus remains on dominating the transaction journey through AI-led innovations without assuming balance sheet risk.
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