Ladies and gentlemen, good day and welcome to the CarTrade Tech Limited Q2 and H1 FY 2026 earnings conference call organized by MUFG InTime India Private Limited. As a reminder, all participants' lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Aryan Sumra from MUFG InTime India Private Limited. Thank you and over to you.
Thank you. Good afternoon, everyone. I welcome you all to the Q2 and H1 FY 2026 earnings conference call of CarTrade Tech Limited. To discuss this quarter's financial and business performance, we have from the management, Mr. Vinay Sanghi, Chairman and Managing Director, Ms. Aneesha Bhandary, Executive Director and CFO. Before we proceed with the call, I would like to mention that some of the statements made in today's call may be forward-looking and may involve risks and uncertainties. For more details, kindly refer to the investor presentation and other filings that can be found on the company's website. Without further ado, I would like to hand the call to the management for their opening remarks, and then we can open the floor for Q&A. Thank you and over to you.
Thank you and happy Diwali and happy New Year to all of you. Thank you for joining this Q2 earnings call of CarTrade Tech Limited. I'm Vinay Sanghi, and I'm the Chairman and Managing Director of the company. I want to start with telling you that this has been an extremely good quarter for the company. If you see slide number three, which we've circulated, profits, as you know, have surged 109% to INR 64 crore during the quarter. CarTrade Tech Limited has delivered its best-ever performance. In fact, not only at the consolidated level, but every vertical has achieved its highest ever revenue and profits during the quarter and, of course, during the six months as well. At a consolidated level, we have achieved the highest ever revenue of INR 222 crore for the quarter, which is a growth of 29%.
Profits have grown exponentially to INR 64 crore, which is a growth of 109%. Not only has it grown 109% year on year, but if you see sequential quarter growth, Q1 to Q2, EBITDA is up by 46%, showing the strong momentum in our business as well as our unit economics. As you all know, CarTrade, CarWale, BikeWale, OLX, all our three consumer platforms get more than 150 million yearly active users, which is unique by itself. If you go segment-wise, the consumer group has grown quarter on quarter by 37%, resulting in 82% profit growth. Our EBITDA margin has come to 40%, which is now getting best-in-class. Many of you have asked these questions over the last few quarters, and now you see that the margins are getting best-in-class on an EBITDA basis.
When you look at the remarketing business, it is back on its growth path clearly with a 23% growth and a 30% profit growth. OLX India has now consistently grown quarter by quarter, achieved its highest ever revenues in its history, also back on the growth path with 17% growth and a 200% profit growth. OLX, now with its unique unit economic model and leverage, has reached a 30% EBITDA margin in quarter two. If you look at the key metrics, as you know, we are the number one on slide number four, we're the number one automotive platform in the country, we're the number one news platform in the country, we're the number one vehicle auction platform in the country. Across our platform, we crossed 85 million MAUs as an average for the month MAUs for this quarter.
95% of our traffic, as you know, comes organically, and that's one of the reasons for our high margins of the company. We have 500+ physical locations now, with all our locations expanding, especially AbSure and OLX India outlets. 1.8 million vehicles at the rate we're auctioning in the last quarter, the annual rate we're auctioning in the last quarter. Revenues are INR 222 crores. Adjusted EBITDA with a cash proxy is INR 96 crores for the quarter. We normally give this number because that's the generation of cash. INR 64 crores profit after tax for the quarter on a consolidated basis, and the cash balance is now INR 1,080 crores, up from the last quarter. If you look at slide number five, which is also the consolidated result of the company, as I said, revenues are INR 222 crores, up 29%.
Revenues are also up from INR 198 crores the last quarter sequentially. Half-yearly revenue growth is 28%. EBITDA is up 94% to INR 63.59 crores this quarter, up from INR 43.5 crores sequentially, and, of course, up from INR 32 crores last year. It's almost doubled from last year. On a half-yearly basis, EBITDA has come to INR 107 crores, up from INR 54 crores last year. The margins that you see here from last year, the margins, same period, the margins are on the 21% - 33%, which was a massive margin growth on a consolidated basis. As you can see below, profit after tax is at INR 64 crores, which is 109% up from the previous year, and on a half-yearly basis, 107% up from the previous year.
I think the one thing to also note here is the cost, which is something there have been many questions on, our leverage in our business. If you see the cost structure, if you look at quarter on quarter, the June quarter, September quarter, even though the revenues have grown, the cost is exactly the same at INR 129 crores. If you look at year on year, the cost escalation is only 8% in spite of a 28% increase in revenue, which shows the leverage in the business. If you look at the standard accounts of the consumer group, which is BikeWale and CarWale, growth has been extremely strong, 37% growth in revenues, operating revenues of the company, which, of course, and again here, the leverage, you see the cost escalation year on year, only 3%.
In fact, quarter on quarter, the cost has actually marginally gone down, which is the result in a 174% increase in EBITDA for three months and 172% over six months. It shows the huge leverage in profits. EBITDA has actually almost tripled in the first six months of this year. Even if you take quarter sequential quarter on quarter, from 19.42 the previous June quarter, it's gone to 30.68, which shows the leverage in the cost when revenues grow. Profit after tax has grown at 82% for three months and 81% for six months. If you look at the remarketing business, the half-yearly results, growth is 28%. The three months' growth is 23%. EBITDA is up 65% for the six months and 89% profit after tax for the six months. For the three months, EBITDA is up 37% and 30%.
The margins here have grown as well from last year, 23% - 26% for three months and from 19% to 25% for six months. If you look at OLX, OLX is up 17% year on year to achieve a highest ever revenue in a quarter. If you look at the total income, it's up 39%. EBITDA is up 93%, again, showing the leverage. If you see cost escalation is zero during the year on year. Margins have been 30% in the quarter, which shows, again, the leverage in the business. Profit after tax has grown by over 200%.
The one thing I want to highlight here, the 17% growth for the last quarter is the beginning of the growth journey for, even though we've grown Q1Q for the last two years, which is we feel a growth which we can surpass or a rate of growth we can surpass in the coming quarters. We feel very optimistic about the next few quarters for growth in OLX. A lot of questions in the last analyst call had come around, you know, the drivers and levers of the growth, which I'll be happy to answer. We feel very optimistic about the growth for this quarter, coming quarter, and the quarters after that at OLX. This is what I had to start off with in the financial overview. I'm happy to take up any questions and clarify all your doubts. Thank you.
Thank you very much. We'll now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Vijit Jain from Citi. Please go ahead.
Yeah, hi. Thank you.
Hi, Vijit.
Hi, Vinay. Congratulations on yet another terrific result. My first question is on OLX, obviously, and it is so good to see now that the business is accelerating in growth. Thanks for providing that update for the next few quarters as well. Could you give a sense of where this growth is coming from? How much of it is driven by the new initiatives you've spoken about recently versus the existing monetization channels? To your comment on the next few quarters, are there any metrics or any additional color on where that will be coming from and which initiatives are panning out better than expected? Any other color you can give on OLX would be super helpful.
Sure. Thank you. A lot of the growth coming in the last quarter, most of the growth coming in the last quarter has come from existing initiatives. I think, as you know, we monitored consumers and businesses for selling new products on OLX India, and a lot of the growth has come from there. We feel a lot of the product initiatives we took in the last six to nine months have started to pay off. User experience has got better. Conversion ratios have got better. Traffic metrics have got better. We gave that guidance in the last quarter that we had the first signs of visibility of greater, you know, metrics or better metrics in the company, which continues to be so. You have to remember, this is a July, August, September number. I just want to say one more thing that it is accelerating.
It is not necessary that the growth rate for all the three months is the same. We are obviously able to also predict that in the next few quarters, with the increase in these funnels and conversion ratios, etc., the growth rates will increase in our existing businesses. This is in the existing B2C businesses. The new products we've launched have actually taken up extremely well. It's been very early days. There will be additional monetization opportunities for us, especially with the Elite Buyer program in the coming quarters and coming years, actually. I think OLX India monetizes two sides of the business, one is sellers and buyers. Right now, almost all the monetization is from the seller side. The Elite Buyer program aims to monetize buyers. Of course, buyers are three times the number of people than sellers on the platform. The product has been launched.
It's actually had fantastic early adoption. We feel very optimistic about the Elite Buyer program for the next few quarters. We've also discussed earlier that we're launching a new trust verification program, which will probably get launched by the end of this quarter. That will become an additional monetization opportunity for, you know, mostly the next quarter and the quarters after that.
Got it. Thanks. Thanks, Vinay, for that color.
Thank you.
Any thoughts within this in terms of the metrics that you can share on OLX India that can help us track this would be super helpful. The way you've disclosed certain metrics around other businesses in the past. My second question is on the consumer business. Two questions there. One, I am mindful that you lapped one full year of growth acceleration from CQ of last year in the coming quarter. If you could talk about how else you think about the growth for the consumer business from here on. Within that, if you can talk about the mix between two-wheeler and four-wheeler platforms. I'll just add my second question into this as well. I saw your recent updates on how Google's AI search mode highlights a lot of CarTrade Tech Limited results.
My question is, from AI mode, do you see lower site visits to your platform versus from 10 blue links, if you have any color on that part? Thank you. Those are my questions on the consumer side.
Sure. I think the first part is that the consumer group growth has been extremely strong in the last quarter. You have to remember that the last quarter, the automotive industry itself, because they announced on the GST, it had a very tough quarter, to be honest, because in July and August, if you would see it, sales were muted, and then there was some acceleration of sales for the last part of September. Generally, what we've also shown in the past and over the last many years is that we're really agnostic to the industry as such. No matter whether it grows at a slow rate or a high rate, we tend to grow faster, right? Which is a trend, which is a circular trend going on because more and more money is getting spent on digital, I think, number one.
Number two, more and more money is spent on automotive advertising as well. I think we are gaining there. We're gaining in market share versus competition as well, other digital players as well. Therefore, you see us completely outpacing any industry growth, whether car sales growth or digital sales, digital advertising growth, right? We continue to see this trend, or we do believe that this trend will continue. In fact, we've also given guidance earlier that normally April to June is normally the most muted quarter of the year. July to September is better, but the October to March period is even better than that normally. We do see that trend continuing. We don't see any reason for that to change. If there is acceleration in car sales growth due to GST or other reasons, then that should help us even more than this, right?
We do see the consumer group accelerating growth even further or growing over the next few quarters and definitely a few years as well, number one. Number two is the whole AI question which you had around AI mode for Google or other search LLMs. As we've also discussed earlier, and the reality is a lot of the AI engines or the AI LLMs draw information or content, all these things from our platforms. Therefore, whether the user uses AI mode or search mode, either way, they are directed by some of these LLMs to our platforms. The reality is also in India, the usage of these AI modes versus search is very low at this point. However, the chances of someone coming on AI mode are even greater than search mode.
Having said that, CarWale is also on Google Trends and other places you see on direct traffic, extremely strong. I think whether people come directly, which is a large percentage of our users, or someone uses search mode or AI mode, we feel pretty confident that we have relevant information and content and capability for all those users.
Got it. Thanks, Vinay. Those are my questions, and I'll jump back in with you.
Thanks.
Thank you. Next question is from the line of Shubham Tamrakas from Alterist Investment Management LLP. Please go ahead.
Hi. Thank you for this opportunity. First of all, thank you. It's a great set of numbers or congratulations for that.
Thank you.
My question is that how we are like incremental growth coming in our OLX India business. I have, in your earlier, you have answered regarding the monetization and high conversion ratio. Anything else we are doing, something new, which will drive the incremental growth?
Yeah, of course. There's a lot of work we do on user experience to convert more users. As I said earlier in the previous question, almost all our revenue comes from people who sell products. People who sell products are consumers like you and me. We have more than 2 million consumers a month selling products on OLX India, and we get more than 6.5 million buyers every month on our platform. We currently monetize these 2.5 million consumers who sell products every month. We also monetize the tens of thousands of businesses that sell cars or two-wheelers or electronics, other things, or properties on OLX India. Obviously, we're building more and more capability to help them sell products and therefore improve our conversion funnel, which is what is leading to the growth in revenue.
I think at the end of the day, someone like you or me listing a product for sale is being served better, or the likelihood of them selling a product or the response they're getting on OLX India is going up. That's one of the reasons why our monetization is going up. We're continuously improving on this. There's a lot of work to be done and continuously improving on this to enable our B2C revenue. If a consumer today listed for free, our attempt is to convert the consumer to pay to list so that the chance of them selling the product goes up. I think that's getting better every day, number one. There's a long, long headroom to grow there.
Number two is we are building products like the Elite Buyer program, where if you're a buyer and you're three times the buyer as a seller, how do we monetize by giving a better buying experience so that the chance of you buying a product goes up? The multiple products that the Elite Buyer program has launched last quarter, and obviously, our objective is to, over the next quarters and years, make that a significant monetization opportunity for us and a whole new monetization opportunity. I think the third part is that when you're buying a used product, you want a certain amount of verification trusted on the platform. We're building a product today, which will get launched sometime this quarter, which will monetize all buyers and sellers. There are three or four more initiatives that come the quarter after that.
The multiple monetization opportunities, it's about existing sellers, consumers, and dealers. It's about existing buyers. It's about what's the platform for other value-added services, plus trust and safety, etc., etc.
Okay. Is there any employment cost that will be increased as we increase our business, or will it be stabilized like this only, like this year we have OLX India?
Cost across the group, I would say, across the consumer group, all in OLX India, our life should be very stable. We don't really see any real cost escalation for all these initiatives.
Okay, we'll enjoy operating like this.
Yes.
Yes, thank you. It was great, thank you.
Thank you.
Thank you. The next question is from the line of Yashowardhan Agarwal from IIFL Capital Services Limited. Please go ahead.
Hello, everybody.
Yes, we can hear you.
Yeah, hi sir, thank you for the opportunity and congratulations on both sets of numbers.
Thank you.
My question is on the consumer business, which is a market-mixed model. In my understanding, the growth could either be driven by the increasing number of dealers or the cars or bikes boosted by them or the leads generated. The growth that we are witnessing now, out of all these factors, which of them is actually driving growth for us?
In the consumer group, our revenue comes from manufacturers and dealers. The revenue is being driven by incremental spend on leads, advertising transactions by manufacturers and dealers. That's coming from manufacturers allocating more of their money to digital, and within digital, more of their money to us versus other digital platforms. I think the growth is coming from there. As you know, the car industry over the last many months has been close to 0% - 2% growth. It is not coming as yet from incremental industry sales. It's coming mostly from manufacturers and dealers allocating more money to platforms like ours, which gives them more returns. I think as one of the things we've always talked about, there's a lowest cost of sale for any manufacturer or dealer in the country, and we pride ourselves on that.
When manufacturers need to sell vehicles, the number one platform they come to is us.
Okay. I'm just wanting to understand because, of course, it's the situation where supply is more than demand, will be in a more favorable way. Since we are seeing taking up in the auto sales, is it possible that there could be a slowdown in the growth that we are witnessing now? Are there any chances for it?
We've shown data and performances in many, many quarters that even in industries growing at large numbers or large percentages, we've grown faster. I think we're witnessing the fact that platforms like CarWale have a tremendous amount of, or BikeWale, a tremendous amount of traffic growth, number one. Dealers and manufacturers, irrespective of whether they're flat or they grow at high rates, need to use platforms like CarWale, BikeWale, or CarWale and BikeWale for incremental sales or sales of their products. I think all over the world, also, it's seen that platforms like this are used as places to sell vehicles by manufacturers and dealers just because consumers love coming here. I think that's the main thing. As I said, whether the, and we're witnessing that in the last month or so with car sales growing, car sales have actually grown even further.
That's pretty helpful. I'm just wanting clarity on how AbSure and OLX are shaping up. Even in AbSure, where we do partnership with the dealers and where we are providing our brand as AbSure, which helps build more customers because these dealers, how is that shaping up? How do we track the number of cars which are sold on them? How is their revenue reported in which of these segments?
Yeah, it's actually both OLX Trusted Outlets or AbSure Outlets are our franchise stores where we provide our services and brand and technology to dealers. Obviously, it's an asset-light business for us. The number of stores have dramatically grown. The number of sales have dramatically grown. It's a new business only in the last three years or so. We think in the long term, it helps us as the business, as the whole buying process of cars gets more digital. It's a platform we're building so that we have the capability to provide a digital end-to-end experience for consumers like you and me, which means that if you want to buy a car, you can come online to one of the AbSure or OLX Trusted Outlets and buy a car online quick. That's our attempt. It's actually done very well. It's grown extremely well.
I think the number of stores now is over 400-odd stores. Sales continue to accelerate there. The revenue is reported in OLX's revenue and then separately. For the OLX stores and CarWale's revenue in the consumer group revenue independently.
Okay. Can I ask you how big is the opportunity in this? Because we are probably a public of the trust, right? If anyone is buying a second-hand product, if they are seeing the surety of the AbSure, which can help the dealers as well.
For us, you know, we have, as I said, over 400 outlets. This will accelerate, in our opinion, in the next three, four years. I think more than accelerating, it'll provide another curated experience for our consumers where they can get a one-click like environment to buy a used car online. That's the attempt. I think for us, it's a very strategic part of our business, which will continue to grow. You've got to remember, this is part of another large used car business where we have thousands of dealers listing products on OLX and CarWale. It's part of that, but this is a curated business within that. We see a big opportunity in helping used car dealers, the fragmented set of used car dealers selling cars on OLX or CarWale. We also see an opportunity in OLX and AbSure outlets selling vehicles on CarWale and OLX.
Got it. The last question, the utilization of cash. Currently, we're having more than INR 1,100 crore of cash on our books. How do we intend to utilize it?
We've said this before that if we get any, I mean, an opportunity which, of course, is strategic enough, we'll just attach to that purpose. Over, of course, as our tax shelters go away, we will also distribute. If we do not use it for M&A, we'll probably distribute it out to shareholders. We've said this before.
Got it. Thank you.
The business doesn't require cash. The current businesses don't require cash. They're all generating cash.
Yes, sir. That's true. Thank you, sir.
Thank you.
Thank you. The next question is from the line of Shrenik Mehta from [IndoElseWealth]. Please go ahead.
Good afternoon, Mr. Sanghi.
Good afternoon.
We have built a CarTrade Tech Limited business as a very strong and sustainable business, given that you have a strong turnaround in the last few quarters. However, our ROE last year was below the cost of capital at 6%. I'm sure we're looking at increasing this further to maybe at least 20% - 25% levels in the next few years. Can you share your vision when you see this happening?
It's correct. If you see the ROE itself over the last three years has dramatically gone up. If you look at it, we just annualize the current profits. You already see it's likely to maybe double, close to double this year. We do see, over the next two to three years, and as you already know, our margins are at 33% on a consolidated basis. With very little use of cash in our current businesses or cash generation coming in, we do see that our ROE will get best-in-class in the next few years.
Okay, you want to put a frame to it, like.
No, we don't give guidance on timeframe. We don't give guidance on this, but you can already see it's dramatically improved in the last year and likely to get even better and better. If you just analyze the current quarter's pack, you'll find that it's already far, it's already more than double from last year.
Thank you.
Thank you.
Thank you. A reminder to all the participants, please restrict yourselves to two questions. The next question is from the line of Hardik Doshi from White Whale. Please go ahead.
Thank you for taking the question.
Thank you.
I want to ask about the expenses on the expensive side. If I see, you know, actual expenses increased about 7%, but pretty much all of it has been driven by, you know, the employee costs and the remarketing side, which went up 35%. Firstly, can you just talk a bit about, you know, what drove that increase?
Sure.
And secondly.
And that's.
Is it okay?
No, go ahead. Sorry.
No. Just secondly, I know you mentioned there's more operating levels going forward. Absolutely, excluding these employee cost increases, the expenses are essentially flat. Do you expect expenses to remain stagnant at these levels, or will they start accelerating and in what areas?
Yeah. I think the second question first. We see the expenses to be exactly the way they are. I mean, there's minor differences or changes. That's just the nature. If you look at the financials over the last two to three years, you'll find the same trend where expenses tend to grow marginally, but revenues tend to grow faster. Therefore, the leverage in the business is such that when revenue grows, almost all of it goes to profit. I think that's just been the trend over the last two to three years. That's the second question. The first question is the growth of cost or employee cost in the remarketing business. Actually, now what's happened is that if you see six-month growth, about 28%, but we had an increment cycle, which we changed.
Most of the increments for the business last year came in the third quarter, but this year, we did it earlier. I think the change in increment cycle from last year to this year has just had a base effect. Over the course of the year, you'll see you won't see the growth rate of expenses in Shriram Automall. It is just because the increments that last year were done on 1st October, so they didn't come in the first two quarters. This year, they were done much earlier. I think that's the change you'll see.
Okay. I mean, the number of employees are not increasing significantly in the recent.
It's not significant. There have been some increase, but not significant. No.
Got it. Okay. The second question is, you know, at the end of the presentation, you used to disclose metrics around traffic and energy, etc., which you stopped now. Any reason for that?
I think we've given the traffic upfront in the first step. Aneesha, you want to just clarify?
Yeah, it's on. It's on slide four, Harvick. If you look at the footnote, I believe it's covered over there. The 85 million miles, we have split it in the footnote below, and that belongs to the consumer group and OLX. Nearly the 128 million auction listings, the footnote carries the listing volume and the auction volume.
Okay. Got it. Great. Thanks for that.
Thanks, Hardik.
Thank you. The next question is from the line of [Nilab Jade] from Ashmore Research. Please go ahead.
Okay. Sir, possible congratulations on a very good sales number.
Thank you, Ashmore.
Sir, actually, I have a very personal thing to share, and I want to see, my question is related to how you are leveraging AI. Because, see, personally, I was searching to buy a new car, and I went to ChatGPT, and I found that most of the questions, I visited your site, but I found most of my questions, and when I'm giving the prompts, ChatGPT is already throwing. Except for viewing the car and seeing some comparative prices, I did not need to go through extensively through your website. That's a little worrying for me. Like you, I was following your question answers regarding the AI part, and you are telling that they are scanning through your website and getting the data. How are you handling this particular problem?
This is going to accentuate because most of the stuff, people who are maybe throwing some data and getting all the things, and they may not need to visit. They're doing directly, visit the dealers, say, Hyundai or Maruti, and see the products live in front of them. How are you handling, we feel this is a little worrying part for me. Can you please answer this?
Sure. First, the fact that since any LLM, ChatGPT, Google, or Google AI mode, or others have come, our traffic has grown at faster rates. I think that's the first part you must know. I think the one thing you have to keep in mind when you buy a car, a new car, average size for about INR 1 million, it's a very involved purchase. I think you might want a certain, very superficial kind of questions answered by somebody, which could be a friend, a relative, or even ChatGPT or CarWale. It doesn't matter. Eventually, when you go down to buy a car, it's going to go on a deep involvement in terms of understanding the quality of the car, what other people think about it, finding the car, what price to pay, how to get a loan approved.
Today on CarWale, we have 25 banks giving approvals for loans, or getting a discount on the car, or connecting to a dealer, or buying it online, etc. We call that the journey from discovery to purchase. We are working on all segments there to create a differentiated service, and that's been a 15-year journey. It's not a one-year or a six-month journey. For the last 15 years, people come to CarWale because they find a difference between a horizontal like Google and us. That is why we get a large percentage of the traffic today, which is coming through also a direct source. People use CarWale or BikeWale on an app or directly come to us. That's the reason why. The second part is how we're using the AI as a massive opportunity for us in our group.
A large part of our resource of technology and product is going to producing AI-driven tools and products for our own use, our consumers' use, our dealers' use, our manufacturers' use. We are in that phase of launching multiple AI products out there for you and for dealers and for manufacturers as well and for our own people, to make our business far more intelligent. On various test bases on multiple platforms, AI tools have got launched. We obviously believe when you look at AI, if you look at the LLMs, which are like, say, Google for that matter, and you look at us, Google surfaces our information. There are four levels of data sitting here. First, Google can only surface public information, which means the data we expose to public is something Google can surface. The layers of data we have are, of course, public data.
We have our own private data. We have customer data. When you look to buy something, right, we are able to use three, four levels of data, whereas Google can only use what is public. I think that becomes a differentiation of experience automatically. We feel extremely excited about the opportunity. By the way, like I said in the earlier question which came, the chance of it coming through ChatGPT or Google to us is very, very high because they're using all our information. If you see, when you search ChatGPT, the source will always be CarWale, or OLX for that matter, for used products. The reality is that it's more evident that you come to us through that because the information surface is very superficial.
When you buy a INR 1 million product, you need to go deeper into that journey and come to a platform like CarWale and BikeWale. We actually are throughput gone up because of these people.
Sure, just one question more. Maybe I'll speak quickly. Are many consumer-based websites now trying to directly integrate with some of these? I'm not preempting your products, but are you thinking in that line? They are integrating the ChatGPT or Google in the product, in the website itself, for quick answers?
No, I don't think we can integrate. I don't think we can even integrate the information and the content because they take information and content from us. In India, where CarWale or OLX India are so dominant on used cars or new cars, they are using our information. We don't need information from them. We are integrating on various other parameters for various other users, but the information is going from us to them, not from them to us. In fact, as I told you, they can only take from us information which we publicly show on our website. They can't take all the backend private data we've got, which is very, very valuable to us, which is why that information always is short of the information we provide to you.
Sorry. Thank you. Last question. I'm really sorry. Making it hard for you. Last question is that is there any way you are trying to monitor it because I'm telling Iso is trying to monetize with this because this ChatGPT or other LLM or.
Just to tell you, they say this claim in India, they have less than 20 million users. Google has over 800 million on search. In very early days, for users today in India, we are building a lot of technology, and some of them are available to users on all our platforms. It will become a monetization opportunity maybe in the future. Today, I think we're all building technology, understanding what we're doing, and providing a better experience. I think monetization of AI will take some time.
Very good. Thank you. Thanks a lot.
Thank you. Thank you.
Thank you. The next question is from the line of Sachin Dixit from JM Financials. Please go ahead.
Hi, Vinay. I'm Dimi. Congratulations.
Hi, Sachin. Thank you.
My first question was in consumer business. We want to grow to 50 by BSE, right? The group has grown 30% + over the last four quarters. Does that give you confidence of a sustainability of growth of maybe about, I don't know, 10%, which earlier used to be more like a 20% growth to 50% of our business? I'm thinking more long term, not looking at any near-term guidance. Think of like three to five years. Can we build a sustainable growth rate of 25%-ish in this business, or this is still an 18 %- 20% growth business according to you?
The one way to think about it is that we obviously believe that the three core driving factors, right? One is obviously the growth of the industry and advertising spend per car. The second is the shift to digital and our market share within that. Third is what production we build so that we move our market share of spend further to us, which is all part of the strategy, right? If you look at the last three, four years, CAGR, we're much higher, 25% today. We've obviously been very confident with, and the industry actually in the last 18, 20 months has seen very minimal growth. We believe that the growth rate that when I'm giving guidance will be strong. We also believe that, you know, our ability to build products for users will shift, you know, market share of digital spend towards us.
We can be confident about growth rates in the future in the consumer group business, whether it's for cars, bikes, both of them, actually.
Understood. Sure. Vinay, on the same piece, right? As we see, that cost base is largely fixed in nature. It doesn't grow as rapidly as revenue growth. If we build, let's say, whatever, somewhere between 20% - 21% growth rate for the consumer group for the next three, four years, margins tend to reach, assuming the growth rate in cost remains what it is, margins tend to reach almost 55% - 60%. Do you believe at some point OEMs or who serve the customer bases, which includes dealers as well, will try to ask for their fair share out of these margins, or do you think sustainably this business can operate at like 50% of margins?
It's at 40% last quarter. Even in the coming quarters, you'll see it higher than that automatically. It's bound to be.
Thanks. Yeah.
Likely not drop. You'll see it immediately drop in the next few quarters, which doesn't require much time or years for that, number one. Number two, I don't think manufacturers and dealers are connected with our margin structure. They will look at what it costs to sell a car through CarWale or BikeWale or a bike. That's where we pride ourselves, that our ability to make sure that we are a very economical cost of customer acquisition or sale for OEMs or dealers is our strength. That comes from the millions of customers we have, and that also comes from the 95% organic traffic we have. It's a combination of all of that. It comes from the fact that we have a fixed cost structure and not a variable cost structure.
The business architecture, the unit economics, the brand leads to the fact that we can offer manufacturers and dealers the lowest cost of acquisition, number one, and number two, also leads to the fact that our margins keep growing.
Margins to buy better on margin spend potentially.
Sorry.
Sure, go ahead.
Mr. Dixit, sorry to interrupt. Should you follow up?
Yeah, just a second.
Sorry.
It's okay. Just finish your question. Just finish your question. It's okay.
I was just following up on the same piece, right? By better logic, we can sustainably do a 55%-60% margin as well.
I just see no reason why not. I don't see any reason why the margin will not continue to grow. I think all of you all would have this question about a year back when you said, "Would you get to 40%?" Now that you got to 40%, you'll say, "Will you get to 55%?" I mean, that's the question.
Sure, sure. Thanks, Vinay. All the best in the future.
Thank you. Thank you, Sachin. Thank you.
Thank you. A reminder to all the participants, please restrict yourselves to two questions. The next question is from the line of Anjali Bajaj from Naredi Investments. Please go ahead.
Good morning, sir. Congratulations over this set of numbers. OLX India's profit after tax grew by 213%, while revenue increased only 17%, showing a strong profit growth. Could you explain to me what efficiency step led to this sharp rise in profit?
Sure. I think one is, as you said, the cost has been zero increase in cost. In business, a lot of cars, it grew at 17% or 20%. When you have no increase in cost, it almost all goes to profit. In this case, all has gone to profit, which is the reason why profit has grown at a sharp rate. There has also been an increase in another income, which has led to it. As I said, the primary driver of this is that all the revenue has gone to profit. There is also cost escalation.
Thank you. My last question is, sir, other income ramped up by 59% year-on-year basis this quarter. Since the company holds large cash balance, please specify the verification of the other income.
Sure. It's a combination. Aneesha, you want to exchange this? Hello? Hello? Aneesha, you want to exchange this or do you want me to take this? I think she's not with me, but I think there's a combination of other income which is based on.
Any other.
Aneesha, go ahead.
Any other?
Yeah.
Hello?
Yeah, go ahead.
I'm sorry. I think there's a problem in the line. I think you're referring to the consolidated set of results where you see a 59% growth, I believe. Like you rightly said, there is treasury income in this company where the income has gone up because of the treasury balance also being accumulated. Apart from that, in the segment, the results also being disclosed, there is a write-back in OLX of provisions which are no longer required. It's a combination of both, which is disclosed in note number four of the accounts.
Okay. Thank you.
Thank you.
Thank you, Anjali.
Thank you. The next question is from the line of Nishit Jalan from Axis Capital. Please go ahead.
Yeah. Hi, Vinay. Hi, Aneesha.
Hi.
Congratulations on group setup number five.
Hi.
Aneesha.
Yeah. Vinay, I have two questions. First question is on OLX. I think you made an interesting point that you have started monetizing. You are monetizing sellers right now, but looking to monetize buyers also. My question here is, when you are saying you are monetizing sellers, are you able to monetize individual sellers as well, or is it just the dealer sellers you are able to monetize? If yes, what are the ways by which you are monetizing the sellers of used vehicles on OLX website?
Yeah. We monetize, we've been able to monetize consumer sellers and dealer sellers. By the way, it's not just for cars, but it's for all products across categories, which is where they're selling off. I also disclosed market share numbers across categories. You know, 25% of almost all mobiles are sold in India listed on our platform. There's a large, large number of consumer sellers on the platform for all products, not just cars. Cars, of course, are 60-odd percent of all listings, but it's also high in many other categories, electronics, mobiles, furniture, etc., etc. We are modeling consumers and businesses across all categories. We're heavily working on improving the consumer funnel, and we've had very good, we've had decent success on that. I think OLX over the many years, over the last maybe like maybe 10, 15 years, has mostly tried to monetize dealers.
We are actually, in the last six, eight months, thinking, or we do believe that monetizing consumer sellers by giving them better products and better conversion capability is a massive opportunity for us. As I said, more than 2 million consumer sellers come every month, which is a big, big number. The intent is to go after unmonetized consumer sellers, dealer sellers. The intent is also to monetize, as I said earlier, buyers, which has just started now, and they're three times the buyers as much as sellers. The intent is to monetize the entire platform by building trust and safety, as well as value-added services, etc., etc.
Basically, what you are saying is right now you are monetizing the dealer sellers, not the consumer sellers, but the intent is to monetize sellers.
I didn't say that. I said we are monetizing consumer sellers and dealer sellers already.
Okay, just want to understand, like how are you monetizing consumer sellers? Let's say if I want to sell my used vehicle, or you can list.
Yeah, we will charge you when you list. Currently, the platform rule is when you list a car, it's for free, but it's not necessarily you may just list a car. You might want to put a featured listing. You might want to get a certain amount of response. You might want a guaranteed sale product. There are multiple value-added services built for you as a user to pay, number one. Number two, if you're a consumer seller and your great experience, your first car is free. The second car, if you list within six months, you'll have to, or three months, or eight months, you'll have to pay. Multiple people come back for the second car in the family, or second two-wheeler, or second refrigerator, and pay.
There are multiple models to monetize the consumer seller, not just, as I said, we are a platform for you principally on the first product is free. We started having a large number of customers paying for value-added services, as you call it, or more prominence, or, as I said, and there are multiple products, by the way, coming out here. We just want to launch an Elite Buyer program, which you, as a consumer seller, get a status or a capability to obviously not only get more response, but get more visibility to close the transaction. There are multiple set programs coming out to make sure that even a consumer who lists for free is wanting to pay to get more response or convert the product they're selling.
Okay. Basically, the visibility of the ad, which a consumer seller is putting, increases. For that, you have to pay for the value-added services. The increase is partly visibility, but there are multiple other value-adds. Visibility is just the first thing, but there are multiple other things there.
Okay. Got it. Second, and the last question is on the auction business, Vinay. Now we have started to see, after a few years of slow growth, we have started to see the auction business kind of picking up. Is it because now we have started to see the repossessed vehicles market growing, or where is this growth exactly coming from? Is it just one commerce?
It's across all segments. When you look at the data of repossessed vehicles, retail vehicles, generally, the growth is across all segments. There was a 16 - 18-month slowdown in repossession that was about a year and a half ago. Obviously, we have seen that change and repossession is, of course, growing. Our retail and other segments are growing as well. The segment growth is almost, it's a growth across almost all segments for us.
Okay, thank you. I'll call back in.
Thank you. Thank you. Thank you.
Thank you. The next question is from the line of Mayank Babla from ENAM AMC. Please go ahead.
Am I audible?
Yes, we can hear you.
Hi. Thank you for taking my question and congratulations on the great set of numbers. Could you please shed some light on the competitive landscape in each of the verticals where you're present? How do you see that evolving in the next two to four years?
Sure. If you look at each of our segments, like first look at OLX India, which is a used product marketplace, generally, we see no other digital, as I said, we get almost 180 million users a year, which is the large part of India's population on OLX. Generally, OLX, it's no direct like-to-like digital platform, number one. Number two is on Shriram Automall. It's an online-offline auction company where you can keep vehicles physically and do an online sale for retail users and resellers' businesses. Even here, on a physical model, we really see no direct like-to-like competitor. CarWale and BikeWale is 85% new vehicles, new cars, new bikes, and 15% used cars. On the new product side, there is one competitor. There is, of course, Google and Facebook and even offline advertising is a competitor for that. That's the landscape.
We've never been worried about in the coming few years about competition. It's about us getting better with our consumers and building better products so that we can create more value for our users and keep growing our consumer base. Subsequently, of course, growing our conversion metrics and revenues and profits.
Sure. The likes of Spinney would be a competitor?
Someone like Spinny buys used cars from platforms like ours and then sells them also on platforms like ours. If you go to CarWale or OLX, you'll see a lot of Spinny's cars listed. Spinny is more on, we are, in fact, in alliance with them. They're more an asset-heavy used car business. We're not asset-heavy. Thousands of dealers list their used cars on OLX or CarWale for sale. Spinny, like those dealers, also lists their cars on CarWale or OLX for sale. They're almost complementary in a way because we don't buy and sell used cars ourselves. We're more marketplace-driven, and they're more like a dealer.
Okay. Sure. Thank you so much. Thank you.
Thank you.
Best of luck.
Thank you. The next question is from the line of Vimal Jamnadas Gohil from Alchemy Capital Management. Please go ahead.
Thank you for the opportunity. Congratulations, Vinay and team. I just wanted to check on the consumer piece, CarWale and BikeWale, as to how the OEMs and the dealers, both these segments are done separately. If you could just highlight both of them briefly on how they have done this quarter and for the full year. Vinay, you mentioned, and it's a pretty well-known fact, that incremental spend on ads will go to digital mediums, and within digital mediums, it will come to platforms like us. Do these incremental spends, do you expect them to come more from dealers, or do you expect the OEMs to ramp up? Thank you.
Thanks. First of all, both are growing. For us, the only thing different between OEMs and dealers is that some OEMs aggregate all the dealers and come to us. Some OEMs say, "Listen, why don't you go to a dealer and let them list products?" Generally, across the board, there's been growth. Even looking at the future, the reason we believe that digital spend or the amount of money manufacturing dealers spend to sell vehicles will go up on digital or platforms like ours is because we provide a larger number of users. Our consumer base is growing rapidly, as we've shown earlier. As a result, the most relevant customer, whether you're a manufacturer or a dealer, is with platforms like CarWale or BikeWale. We see that spend is being shifted towards platforms like us.
Also, as I mentioned earlier in the call, we are the lowest cost of customer acquisition for manufacturers and dealers. They tend to put more money towards us.
You do expect both these to grow simultaneously, and it'll be very difficult for us to.
We expect both.
Different segments to grow higher.
I don't think we should think about it that way because even if you're a manufacturer, you're doing it on behalf of a dealer. The manufacturers sometimes come directly. Sometimes they go to the dealer. Eventually, it is a very similar thought process. We do expect both to grow, yes.
Vinay, last thing, our traffic growth has been a strength on both these websites, and that's been growing phenomenally well. How do you make sure? You know, because most of it is not paid for. Going forward, how do you expect this momentum to keep going? I'm talking specifically for the traffic growth on CarWale and BikeWale. How do we make sure that we keep the customer, we keep a lot of mindshare from the customers, from the dealers, from the car makers, etc.?
Yeah, sure. 95% of our traffic is organic, as you mentioned. Obviously, the first is the brands, CarWale, BikeWale, number one, and keeping the brands going. Number two is the products we build for consumers that bring back repeat users or bring back reference users or keep getting new and new customers, right? For us, there is no easy answer to your question. I think it's about every day building better products for a consumer. For example, a few years ago, we built a loan marketplace. It's a completely new feature for all our consumers, and they come for that now. It's about every day adding not only new features, but improving existing features so that consumers get a better experience and going deeper and deeper in helping the user right from a discovery of a product they want to buy to the time they buy it. That's the philosophy.
We are primarily first a technology product company, which is why so many consumers come to us. We obviously expect users to keep coming and growing on the platform. We also expect the automotive industry to keep growing. I think a combination of that and a combination of more and more market share.
Understood. Lastly, any acquisitions? Do you have anything in mind? Any segment that, I mean, of course, the subsegment, the prime segment remains the same, but what kind of subsegments are you eyeing this time around? Are you finding good assets at good valuations? Where are we in terms of allocating capital to acquisitions? Thanks. That was my last question.
Yeah. Obviously, we keep looking at opportunities. We haven't at all at this point come to an opportunity which we can, you know, talk about. We've got a lot of potential left in our current business. The TAM has expanded dramatically with the acquisition of OLX India. The automotive industry is, again, you know, poised to grow. There's a lot to do internally. I think while we keep looking at many opportunities, at a point in time, we'll come back if we find such opportunities. At this point, it's also very important that we've got a limitless TAM. Just keep organically growing, which is what you're seeing as well, the growth within, you know, the organic frame of things.
Understood. Thanks, Vinay. All the very best.
Thank you. Thank you.
Thank you. The next question is from the line of Siddharth Bera from Nomura. Please go ahead.
Yeah. Thanks, Vinay. Thanks for the opportunity. Sir, first question again is on the consumer business. Just a quick clarification. I mean, we also had a limited only pricing this time. Do you think there has been some benefits because of that in the growth as well? Now, going ahead, as we sort of go into the second half of the year, we can sort of sustain this type of growth in the consumer business?
Sorry, I couldn't hear the last question. Could you repeat the question again? Sorry.
I was just mentioning that we had also an early pricing this time. Pricing season started during the end of Q2. Has there been some benefit because of that as well, with the spend getting sort of prepaid?
Is the question about GST? Is that the question? I'm not excusing you.
No, I mean, pricing season we usually have in November.
Oh, the pricing in November. Yeah, I mean, that's probably every year. It doesn't really matter. I don't think the last quarter growth is completely festive-related. There may be small elements of it, but I don't think we've seen some different hockey sticks because of festivity. I think this is a very normal situation if that's the question.
Okay. So last is sustainable. We'll go to sustainable as per your recording. Is that in the second half?
Just to clarify, the festive is nine days in the whole quarter out of 19. I don't think it can be attributed to that.
Okay. On the cost side, also on the consumer business, we have seen marketing spends sort of being quite low in the quarter. I think here also just wanted some understanding about this. This is probably the lowest table we have seen in many, many quarters. Does that sort of normalize sometimes going ahead, or do you think?
It's normal.
I mean, the demand?
I think cost is the cost norm because I'm going to be smudging a little bit. The cost is just normal. I don't see any difference in cost escalation or reduction or increase either way.
Okay. I was talking only within the marketing expenditure, which.
Marketing also, we don't see, I think it goes a little, I mean, marginally up and down. I mean, INR 9.5 million in a quarter is really nothing on a revenue base, right? It may marginally change a little bit, but don't see any significant increase or decrease.
Understood. Lastly, on the OLX setting on the Elite Buyer program also, I do see that it has already got launched. In quarter two, has there been some benefit because of that, or is it mostly in quarter three and the second half we can see?
It's a small revenue benefit. There's some small revenue benefit. When you launch a product like that, it's not about quarter two or quarter three. It's about a very long-term initiative to monetize or offer services to 6 million users a month. For us, it's like a very long-term thing. You'll see benefits of it in, of course, quarter three or quarter four, but incrementally. I think the large benefits will come in the future.
Understood, sir. Thanks a lot, sir. Thanks a lot.
Thank you. Thank you. Thank you.
Thank you. The last question comes from the line of Dinesh Gandhi from Auckland Capital. Please go ahead.
Hi, Vinay. Are you audible?
Yes, I can hear you.
Hi. A quick question on the consumer business. Would it be possible to share the growth between the digital ads versus listing, how growth has been between the two segments of the business?
It's a smudge. It's a smudge. We're not getting clearly. Aneesha, did you get the question?
No.
Yeah.
Could you please click the three?
Can you go ahead again?
Mr. Dani has been disconnected.
Okay. Okay.
We'll take the next question.
Hello?
Ladies and gentlemen, as Mr. Dani has been disconnected from the line, I would now like to hand the conference over to Aryan Sumra.
I would like to thank the management for taking the time out for the conference call today. I would also like to thank all the participants. If you have any queries, feel free to contact us. We are MUFG InTime Investor Relations Advisors to CarTrade Tech Limited. Thank you so much.
Thank you to everybody joining. Thank you, and thank you for joining today.
On behalf of CarTrade Tech Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.
Thank you.