Shares of CarTrade Tech fell 11% on Wednesday following the company’s December-quarter earnings release, despite reporting strong revenue growth and significant margin expansion. The online auto classifieds firm saw its shares slide as much as 10.7% during the trading session, dipping to a low of Rs 2,270 on the BSE. This decline reflected investor concerns about a slowdown in topline growth.
Key Financial Highlights for CarTrade Tech
– Net Profit Growth: CarTrade Tech’s net profit surged by 31.5%, reaching Rs 56 crore, up from Rs 42.7 crore in the previous year.
– Revenue Increase: The company reported a 19% growth in revenue, climbing to Rs 209.7 crore from Rs 176.2 crore a year earlier. This marked a slowdown from the 25% growth seen in the September quarter.
– Operating Margin Expansion: Operating margins expanded nearly nine percentage points, rising to 37.2% from 28.4% in the corresponding quarter last year. This improvement was also noted on a sequential basis.
– EBITDA Growth: Earnings before interest, taxes, depreciation, and amortization (EBITDA) climbed 56% year over year, reaching Rs 78 crore, compared to Rs 50 crore last year.
Traffic and Engagement
In the quarter, CarTrade Tech engaged approximately 85 million average monthly unique visitors, with organic traffic accounting for an impressive 95% of total traffic. This figure remained consistent with the company’s performance reported at the end of the previous quarter.
Remarketing Business
Additionally, CarTrade Tech’s remarketing business continued to flourish, showcasing an annualized run-rate of 1.9 million auction listings. This positions the company as a leader in the vehicle remarketing segment.
Conclusion
Despite the promising growth in net profit, revenue, and margins, the 11% decline in CarTrade Tech shares illustrates the market’s sensitivity to tempo shifts in revenue expansion. Investors appear cautious, weighing the strong profitability gains against a backdrop of decelerating revenue growth. As the company continues to scale its operations and enhance its market presence, stakeholders will closely monitor these dynamics moving forward.