CarTrade Stock Target: Citi Bets on Strong Growth Ahead, here’s why

Synopsis: CarTrade Tech Limited is supported by Citi’s Buy call, driven by ARPU expansion, SUPER SERIES integration, strong operating leverage, and a rapidly growing OLX Trusted Outlets network, offering over 31% upside potential.

This small-cap company, engaged in operating digital platforms for buying and selling new/used cars and bikes via brands like CarWale, BikeWale, and Shriram Automall, connecting consumers, dealers, and OEMs, is in focus after Citi gave a target of Rs. 3,560, which has an upside potential of 31.20 percent.

With a market capitalization of Rs. 13,383.34 crore, the shares of Cartrade Tech Limited were currently trading at Rs. 2,797.35 per equity share, rising nearly 3.10 percent from its previous day’s close price of Rs. 2,713.35. 

Citi, a prominent brokerage firm, has recommended a “Buy” call on Cartrade Tech Limited with a target price of Rs. 3,560 per share, indicating an upside potential of 31.20 percent from its previous day’s close price of Rs. 2,713.35.

Rationale for the Target:

Citi has a positive call on CarTrade Tech Limited, supported by strategic initiatives aimed at improving platform integration and dealer engagement. The launch of the new integrated dealer offering, “SUPER SERIES,” allows dealers to access CarTrade’s user platforms through a single interface, simplifying operations and improving overall experience. While details on monetisation are still awaited, Citi believes this move strengthens dealer stickiness over time.

The brokerage also sees potential synergies from the OLX India acquisition, which could be better leveraged through integrated offerings like SUPER SERIES. By bringing multiple platforms together, CarTrade may unlock operational efficiencies and long-term revenue opportunities. 

Along with this, the growing OLX Trusted Outlets / abSure network supports CarTrade Tech Limited’s growth through an asset-light franchise model, enabling rapid scale with limited capital. With over 400 stores across over 500 locations, the network builds trust, offers a digital end-to-end car buying experience, and strengthens monetisation across both OLX and Consumer segments.

Operating leverage has emerged as the key earnings driver, with stable costs and rising revenues leading to strong margin expansion across businesses, including around 30% EBITDA margins in OLX and nearly 40% in the Consumer segment. At the same time, OLX is moving away from a dealer-heavy monetisation model toward a broader flywheel approach. 

Management is increasingly focused on monetising consumer sellers and buyers through Elite Buyer offerings and trust-verification services, creating multiple revenue streams. This multi-pronged ARPU expansion strategy improves earnings visibility and supports sustained profitability as the platform continues to scale.

CarTrade Tech Limited is engaged in operating India’s leading digital automotive platform for buying, selling, and servicing new and used cars, bikes, and commercial vehicles. Through brands like CarWale, BikeWale, CarTrade, and Shriram Automall, it connects consumers, dealers, OEMs, and financiers with services including auctions, inspections, and remarketing across India.

CarTrade Tech Limited has built a strong and diversified presence across India’s auto ecosystem. It operates the country’s number one auto portal, covering used classifieds and vehicle auctions, and reaches around 85 million monthly active users across its platforms, supported by over 100 million app downloads. 

The company also has a growing offline footprint with more than 500 physical locations through Automall, abSure, and OLX India outlets. In FY26, CarTrade recorded about 1.8 million auction listings, highlighting strong platform activity and its ability to connect buyers and sellers efficiently across both digital and physical channels.

Coming into financial highlights, Cartrade Tech Limited’s revenue has increased from Rs. 154 crore in Q2 FY25 to Rs. 193 crore in Q2 FY26, which has grown by 25.32 percent. The net profit has also grown by 106.45 percent from Rs. 31 crore in Q2 FY25 to Rs. 64 crore in Q2 FY26.

Cartrade Tech Limited’s revenue and net profit have grown at a CAGR of 16.55 percent and 36.14 percent, respectively, over the last five years. In terms of return ratios, the company’s ROCE and ROE stand at 7.59 percent and 6.24 percent, respectively. Cartrade Tech Limited has an earnings per share (EPS) of Rs. 39.4, and its debt-to-equity ratio is 0.06x.

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