CarTrade Tech falls over 4% on Q2 growth slowdown; Nomura sees 37% upside - here's why

The growth was significantly slower than the 27% reported in the September quarter of FY25 and 29% in the corresponding quarter of FY26. Net profit declined 0.8% year-on-year to Rs 59.5 crore from Rs 60 crore in the year-ago quarter. EBITDA increased 20% to Rs 76 crore from Rs 64 crore. OLX India remained a bright spot, with revenue growing 26% year-on-year and EBITDA rising 36%. Despite the slowdown, Nomura maintained its 'Buy' rating on CarTrade Tech and raised its target price to Rs 3,377 from Rs 3,340, citing the growth potential of OLX and improving monetisation opportunities.

The revised target price implies an upside of around 37%, according to the brokerage. Nomura expects OLX's growth to accelerate beyond 30% year-on-year in the second half of FY27, supported by initiatives already in place. Elite buyer and seller programmes are seeing good uptake, while potential growth drivers include an e-commerce model for non-auto products, large dealer partnerships and used-car financing tie-ups.

The brokerage acknowledged the weakness in the Consumer business, where revenue grew 4% year-on-year against its estimate of 17%. It has lowered its revenue estimates by around 3%, mainly due to the Consumer segment, but expects operating leverage to drive 80-100 basis points of margin expansion, leaving its FY28 and FY29 earnings-per-share estimates largely unchanged. Nomura also said CarTrade's valuation remained attractive at around 27 times FY28 forecast enterprise value to EBITDA, adjusted for its 51% stake in unlisted SAMIL.

It expects a 29% EBITDA compound annual growth rate over FY26-29 and retained its target multiples of 32 times enterprise value to EBITDA for Consumer and OLX, and 25 times for SAMIL.