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CarTrade Tech Limited Q1 FY25 Earnings Conference Call Summary
Key Highlights • Date of Call: July 30, 2024 • Revenue Growth: • 64% increase in operating revenue • 46% rise in overall revenue • 69% growth in profit after tax • Record revenues of INR 156.4 crores • Adjusted EBITDA of INR 43 crores
Business Performance • Consumer Business: • 18% increase in operating revenue • 84-85% of revenue from new cars and two-wheelers • OLX Performance: • Monthly revenue run rate increased from INR 13 crores to INR 15.3 crores • Focus on technology and product development post-acquisition • Non-auto segment already profitable
Marketing and Expenses • Marketing Expenses: • Decreased as a percentage of revenue • No immediate need for increased spending • Operational Costs: • Stabilized expenses with slight increases due to operational costs and team increments
Challenges and Opportunities • Remarketing Segment: • Challenges due to low repossession supply • Retail supply nearly matching repossession supply • Future Growth: • Optimism for continued revenue growth and margin expansion
Competitive Positioning • OLX vs. Competitors: • Need for continuous improvement in targeting capabilities for sellers • Approximately 10% of revenue from Google ads
Employee and Resource Management • Employee Expenses: • Decrease attributed to cautious cost management • New hires and salary increments noted
Non-Auto Business Development • Focus on Paid Listings: • Appointment of a head for non-auto business to build strategy • Investments in manpower and technology rather than financial outlay
Market Share Insights • Used Car Market: • OLX's dominance in C2C sales • CarWale's significant role in B2C sales • Approximately 5 million used cars sold annually in India
Conclusion • Future Outlook: • Management expressed optimism about future growth and performance across segments.
CarTrade Tech Limited Q4 FY24 Earnings Conference Call Summary
Key Financial Highlights • Revenue Growth: 52% increase in revenue, reaching INR 161 crores. • Profit After Tax: 43% increase. • Adjusted EBITDA: INR 49.1 crores. • Cash Balance: INR 750 crores, with a debt-free status.
OLX India Segment Performance • Traffic: 30 million unique visitors monthly, with automotive listings contributing 45-50% of revenue. • Revenue Stability: Flat revenues in remarketing business; retail growth driving stability. • Cost Management: Lease costs rising primarily due to OLX, but overall costs remain steady.
Growth Strategies • Focus Areas: Immediate growth in used car classified business, followed by non-automotive segments. • Monthly Active Users: Slight decline from 35 million to 30 million due to analytics changes. • Future Growth: Potential for 20-25% growth in standalone business based on historical performance.
New Car Business Insights • Growth Rate: New car business grew by 20% in FY '23, outpacing the overall industry growth of 8%. • Market Outlook: Analysts predict 0% to 5% growth for the car industry this year.
Operational Synergies • Integration Efforts: Developing customer and technology synergies across platforms, with ongoing integration of consumer listings with Shriram Automall.
Profitability and Revenue Outlook • Profitability Growth: Expected to outpace revenue growth, with margins improving as costs stabilize. • Paid Listings: Plans to grow both the number of paid listings and average revenue per user (ARPU).
abSure Initiative and Revenue Distribution • Certified Vehicles: Acquisition of OLX doubled certified store count to around 220. • Revenue Split: Stable 65%-35% distribution between auto manufacturers and dealers.
Shareholder Considerations • Potential Buybacks: Acknowledged but noted regulatory constraints. • Future Growth Opportunities: Plans for shareholder returns using the cash balance.
Conclusion • Optimism for Future: Vinay Sanghi expressed confidence in sustained growth and profitability, particularly in the used car classifieds sector.
CarTrade Tech Limited Q3 FY24 Earnings Conference Call Summary
Key Highlights • Date of Call: February 8, 2024 • Revenue Growth: 48% increase in revenue • Profit Growth: 56% rise in profit from continuing operations • User Base: 70 million monthly active users • Financial Position: Cash reserves of INR 720 crores, debt-free
Financial Insights • Adjusted EBITDA: Significant growth reported • Profit Margins: Improved despite challenges in remarketing • PDT Costs: INR 60 crores incurred for technology transition, expected to normalize
Business Performance • Remarketing Challenges: Decline in repossessed vehicle supply affecting the business • Retail Growth: Strong performance in retail, particularly through CarWale • Auction Listings: Increase noted, but conversion rates have dipped
Discontinued Operations • Losses: INR 46 crores attributed to ongoing costs and one-time shutdown expenses • Future Outlook: Expected future losses from discontinued operations to be zero
Market Dynamics • New Auto Business Growth: Currently at 18% year-over-year, below expected growth • Competitors: Main competition from Google and Facebook, not emerging platforms
Strategic Focus • Integration of OLX: Emphasis on stabilizing classified business and leveraging synergies • SAMIL Business: Belief that repossession rates have bottomed out, with retail growth expected to offset declines
Revenue Mix • Repo vs. Retail Sales: 48% from repo sales, 39% from retail • Future Projections: Anticipated increase in dealer share of revenue
Tax and Cash Reserves • Tax Expenses: No current tax due to carry-forward losses of INR 63 crores • M&A Opportunities: Actively seeking acquisitions; buybacks considered if no suitable investments arise
Conclusion • Management's Outlook: Optimistic about growth, margin improvement, and navigating market challenges.
Submission Details • Date of submission: November 17, 2023 • Earnings call date: November 09, 2023 • Participants: • Mr. Vinay Sanghi, Chairman and Managing Director • Ms. Aneesha Bhandary, Executive Director and CFO • Transcript submitted to BSE and NSE, available on the company website.
Financial Highlights • Revenue Growth: 44% increase • Profit After Tax (PAT): 132% increase • Monthly Active Users: 70 million (90% organic growth) • Net Revenue: Rs. 148 crores • EBITDA: Rs. 32 crores • Acquisition Impact: Expanded physical presence to 350 locations.
Consolidated Results • Six-Month Growth: 32% overall • Consumer Business Growth: 25% • OLX Revenue: Rs. 23 crores in 50 days • Transaction Business: Incurred losses, leading to scaling down.
Future Plans • Focus on profitable classifieds business. • Transition away from loss-making transaction business by December. • Anticipated reduction in one-time technology costs.
Competitive Landscape • CarWale holds significant market share: 84% new, 16% used cars. • OLX's strong presence in the used car sector. • Google Trends indicate CarWale's dominance over competitors.
Q&A Highlights • Production and Tech Expenses: Minimal costs until September; Rs. 30 crores expected this quarter. • Remarketing Business: Stabilizing but not yet growing. • C2B Business Closure: Due to high operational costs and low interest. • OLX's Revenue History: Rs. 170-180 crores annually with Rs. 100-110 crores profit. • Future of OLX: Focus on enhancing used car business and expanding into other categories.
Acquisition Insights • OLX acquisition expected to increase revenue by 40%. • Initial transition costs anticipated but expected to decrease over time. • Emphasis on product development for both OLX and CarWale.
Conclusion • Vinay Sanghi expressed optimism about the acquisition and its potential for growth. • The call concluded with well wishes for Diwali.
Acquisition Details • Date of Announcement: August 28, 2023 • Acquisition Value: Rs. 535 Crores • Target: 100% of Sobek Auto (includes OLX and consumer-to-business automotive transactions) • Revenue Generation: Classified business generates Rs. 177 Crores; transaction business currently at a loss but with growth potential. • Technology Transition: Expected completion by March 2024.
Financial Insights • Classified Business Growth: Approximately 20% growth over recent years. • Profit Margins: Classified business has a trailing profit of Rs. 111 Crores. • Cost Reduction: One-time tech transfer cost of Rs. 60 Crores expected to reduce ongoing tech costs by 40-60%.
Strategic Focus • Unit Economics: Plans to improve unit economics in the transaction business, even at the cost of initial growth. • Marketing Strategy: Shift towards organic customer acquisition to optimize marketing costs.
Competitive Positioning • Profitability Outlook: Confidence in avoiding losses in the next fiscal year due to strong classified business performance. • Asset-Light Model: Differentiates CarTrade from competitors like OLX and CarDekho.
Integration Plans • Classified Business Integration: Emphasis on the larger used classified market compared to C2B. • Revenue Streams: Includes dealer classifieds, consumer listing fees, ad sales, and non-auto dealer advertising. • Platform Operations: CarWale and OLX to operate separately but aim for simplified user interactions.
Future Growth Potential • Synergies with Shriram Automall: Potential for cost savings and improved vehicle storage. • Optimism for Both Sectors: Anticipated growth in classified and transaction businesses post-integration.
Submission Details • Date of submission: August 18, 2023 • Call date: August 10, 2023 • Addressed to: BSE and NSE • Participants: • Vinay Sanghi (Chairman and Managing Director) • Aneesha Bhandary (Executive Director and CFO) • Document signed by: Lalbahadur Pal (Company Secretary and Compliance Officer) • Transcript available on the company's website
Key Metrics and Financial Performance • Physical Locations: Over 200 • Vehicles Auctioned: Nearly 1 million annually • Monthly Unique Visitors: 34 million (85% organic traffic) • Financial Results: • Revenues: INR 107 crores (up 18% YoY) • Adjusted EBITDA: INR 31 crores (up 74%) • PAT: INR 13.5 crores (up 307%) • Stand-alone business revenue increased by 28%
Challenges and Strategies • Remarketing Segment: Revenue declined by 7% due to repossession business drop (45% of operations) • Retail Supply Growth: Increased to 40% • Acquisition: Signed agreement to acquire Sobek Auto for INR 537 crores, including OLX Classified business
Business Mix and Market Insights • Used Cars: Now 27% of business (up from 16% YoY) • New Car Revenue: Increased by 29% • Used Car Revenue: Increased by 33% • Overall Auto Industry: Stable with rising traffic across platforms
Operational Insights • Repo Segment: Decline noted, but retail growth is positive • Auction Efficiency: Over 1 million vehicles auctioned annually • Cost Structure: Remains flat, positioning for profitability • Complementary Markets: CarWale and Cars24 operate in different segments
Inventory Management and Future Outlook • Inventory Management: Minimal and auctioned post-dealer transaction confirmation • Electric Vehicle Impact: Minimal effect on business • Profitability Aspirations: Aim for higher EBITDA margins similar to peers
Additional Financial Discussions • Inter-Corporate Loan: INR 40 crore loan for Bizloan, secured by dealers' receivables • Future Discussions: Cash reserves and potential share buybacks to be discussed post-transaction closure
Conclusion • Vinay Sanghi thanked participants, concluding the call with a positive outlook for the company's growth and strategies.
CarTrade Tech Limited Q4 FY23 Earnings Conference Call Summary
Compliance and Participants • Date of Submission: May 6, 2023 • Call Date: April 28, 2023 • Participants: • Mr. Vinay Sanghi, Chairman and Managing Director • Ms. Aneesha Menon, Executive Director and CFO • Compliance: Transcript submitted to BSE and NSE per SEBI regulations.
Financial Performance Highlights • Record Financials: • 20% revenue growth for FY23, totaling INR 427.7 crores. • 28% increase in adjusted EBITDA, reaching INR 124.9 crores. • Highest quarterly revenue of INR 116.6 crores and profit after tax of INR 40.4 crores. • Consumer Platform Growth: • 34 million unique monthly customers, 86% organic growth. • Standalone Financials: • 35% revenue increase for the quarter, 38% for the year. • 101% growth in adjusted EBITDA for the quarter. • Challenges: • Remarketing business faced slight declines in growth and EBITDA margins.
Growth Outlook • New Car Sales: • 28% increase this year, predicted slowdown to 8-10% next year. • Long-term Growth: • Five-year CAGR of 23%. • Cost Structure: • Allows for disproportionate EBITDA growth relative to revenue.
Strategic Initiatives • abSure Initiative: • New signature outlets and 136% growth in used car segment. • Buybacks: • Board considering potential buybacks, no conclusion reached.
Other Income and Financial Adjustments • Other Income: • Treasury income from conservative mutual and overnight funds, generating ~6% on INR 1,100 crores. • Adjusted PAT: • Approximately INR 79 crores after adjustments for deferred tax and cashless ESOPs.
Market Trends and Competitive Landscape • Used Car Market: • Improvement in supply linked to new car availability. • Rising average ticket sizes for new and used cars. • Advertising Trends: • 29% increase in OEM advertising spend. • Stable pricing for automotive advertising.
Future Growth and Acquisitions • Revenue Drivers: • Long-term vision for integrating insurance and loan disbursement services. • Acquisition Strategy: • Cautious approach, ensuring alignment with current business model.
Closing Remarks • Overall Outlook: • Confidence in business outlook for FY '24, particularly in new and used car platforms. • Acknowledgment: • Recognition of record revenue and profitability despite challenges.
CarTrade Tech Limited Q3 FY23 Earnings Conference Call Summary
Key Financial Metrics • Date of Call: January 25, 2023 • Revenue Growth: 23% year-over-year • Adjusted EBITDA Growth: 30% year-over-year • Quarterly Revenue: Approximately ₹116 crores • Adjusted EBITDA: ₹36.6 crores • Remarketing Business: 9% revenue decline due to reduced supply of repossessed assets • Consumer Business (CarWale): • Revenue increase: 45% • Adjusted EBITDA increase: 128%
Q&A Highlights • Future Margins and Marketing Expenditures: • Marketing spend expected to remain stable • Wage increases anticipated but not proportionate to revenue growth • AbSure Initiative: • Currently in early stages with 73 locations • Focus on quality in rollout
Segment Performance • New and Used Car Growth: • New cars: 27% growth • Used cars: 154% growth • Revenue Mix: • OEMs: 22% • Dealers: 50%
Business Dynamics • Remarketing Segment: • Contribution decreased from 70% to around 50% • Focus on diversifying into commercial vehicle auctions and retail vehicle sales • Challenges in Remarketing: • 9% decline attributed to specific customer contracts and inspection costs • Need for diversification strategies highlighted
Market Conditions and Future Outlook • Retail and Remarketing Sectors: • Positive trends in retail vehicle sales • Digital platform adoption strengthening relationships • Financial Considerations: • Annual ESOP cost: approximately ₹27 crores • Exploring inorganic growth opportunities without specific plans disclosed
Conclusion • Mixed Performance: • Strong results from consumer group • Challenges in remarketing group • Future Plans: • On track to reach 90-95 AbSure outlets by year-end • No current plans to monetize consumers directly in the media business