Revenue growth due to increase in auctions but One-time noncash charge affects the profits | CarTrade Tech Q2 FY22 Result Analysis

Financial Results

• Revenue from operations for the company stood at Rs. 78 crores in Q2FY22. When compared with 58 crores in Q2FY21, the company registered a YoY growth of 35%. On QoQ basis the growth stood at Rs. 46%.
• Other income for the company stood at Rs. 10.5 crores as compared to Rs. 6 crores in Q2FY21, a YoY growth of 75%.
• EBITDA for the company stood at a negative (-22.4) crores as compared to Rs. 16.4 crores in Q2FY21. The EBITDA in Q1FY22 was Rs. (-37.9) crores.
• The losses for the company stood at Rs. (-37.7) crores as compared to a profit of Rs. 7.1 crores in Q2FY21.
• The negative EBITDA and PAT for the quarter is due to a non-cash expense. Exceptional and recurring non-cash adjustment of Rs. 93 crores for ESOPs granted in FY21 has been accounted in Q2FY22 and Q1FY22.
• This has led to Net loss after tax of Rs. 81 crores for H1FY22.

Business Highlights

• Average monthly unique visitors stood at 3.4 crores on the website. Out of those, 86.68% traffic was organic, a growth of 34% on YoY basis.
• Number of vehicles listed for auction increased by 73% YoY at 300,671.
• Number of vehicles sold via auction grew by 104% YoY at 63,533.
• The CarWale abSure was launched by the company in 9 cities. This will enable the company to deliver a user friendly world class online offline shopping experience for buyers and sellers of cars.

Earnings Call Highlights

• Adjusted EBITDA for the company stood at Rs. 24.5 crores. Adjusted EBITDA margin for the company stood at 28%.
• Total Addressable Market for the company is about $14.3 billion.
  • Ad Spends: $1.8 billion.
  • Auto Finance: $1.4 billion.
• India is on the way to be the third largest auto market by 2025.
• Auction volume is currently annualized volumes of  1.2 million units.
• Google Trends show the business according to brand searches.
• The company is a dominant player on the bike side with their BikeWale portal.
• 57% of the revenue comes from remarketing business. The rest comes from core new car and used car platforms. New car business is the large part among the two.           
• The company would like to focus on use commercial vehicles business as well.
• 56% of EBITDA comes from SAMIL (Shriram Auto Mall). The income in SAMIL is transaction and commission income.
• 43% of revenue comes from media, from manufacturers and dealers.
• Manufacturers, dealers and stakeholders spend on 13%-14% of all money spent on digital. In developed countries it is 35%-40% range.
• ESOP charge is only for this financial year.