OLX Is Growing. Why Are CarTrade Shares Still Falling?

OLX India delivered 26% revenue growth in the September quarter. Investors in its parent company remained unimpressed. After closing 12.64% lower on October 28, CarTrade Tech shares traded at ₹2,400 at 9:58 am IST on October 29, down another 2.62%.

The apparent contradiction becomes easier to understand when the whole business comes into view. CarTrade’s established consumer division grew much more slowly, and higher operating earnings produced little improvement in profit attributable to shareholders.

The results also bring its next expansion into focus. CarTrade is developing services around its audience of vehicle buyers and sellers, with retail partnerships and transaction tools intended to make that audience more valuable.

The company already earns money from helping people discover, advertise and auction vehicles. Its opportunity now is to participate in more of the work that follows discovery, while preserving the economics that have made its marketplace business profitable.

What the quarter reveals

According to CarTrade’s Q2 FY27 investor presentation, consolidated operating revenue increased 10.2% to ₹213.09 crore. Operating EBITDA, or earnings before interest, tax, depreciation and amortisation, rose about 20% to ₹76 crore. The corresponding margin improved to roughly 36%.

The businesses moved at different speeds. The consumer group, including CarWale and BikeWale, reported operating revenue of ₹79.49 crore, up about 4%. Remarketing grew 12% to ₹70.30 crore. OLX India reached ₹70.18 crore, with EBITDA increasing 36% to ₹22.49 crore.

Growth in the consumer group deserves attention because this is where CarTrade serves carmakers and dealers around vehicle discovery. Reaccelerating this established division alongside OLX’s expansion would give the group a broader base for growth.

The financial filing shows group profit after tax rose approximately 3% to ₹65.95 crore. Profit attributable to CarTrade’s shareholders was ₹59.49 crore, essentially unchanged. A higher tax charge and a larger profit allocation to non-controlling shareholders limited the improvement reaching the parent’s owners. Basic earnings per share slipped to ₹12.30 from ₹12.56 a year earlier.

The comparison also contains a significant base effect. Last year’s other income included a ₹10.49 crore provision write-back. This quarter’s other income fell ₹5.60 crore to ₹23.13 crore, so the absence of that disclosed write-back more than accounts for the decline. Treating the entire reduction as weaker treasury earnings would miss that distinction.

The quarter, therefore, combines growing operating profits with a more modest outcome for shareholders. OLX’s performance is an encouraging part of that picture, but it cannot explain the group’s earnings on its own.

The rivals earn revenue differently

CarTrade’s FY26 operating revenue was ₹779.27 crore, with group profit after tax of ₹243.51 crore. Its marketplaces and auction businesses earn income from services around vehicles. That produces a different revenue base from a retailer recording the sale value of a car.

According to Entrackr’s reporting on regulatory filings, Cars24 India recorded ₹5,092 crore in operating revenue and a ₹441 crore net loss in FY26. The company said its reported revenue decline partly reflected a change in its merchant business. Moving from an inventory model to direct transactions meant recognising commissions instead of the full vehicle value. Its combined gross merchandise value increased 2.8% to ₹8,046 crore.

That accounting change is commercially important. A lower reported topline can accompany a business becoming less dependent on owning inventory. Its effect needs to be separated from changes in transaction activity and the income earned from each transaction.

Spinny reportedly recorded FY25 operating revenue of ₹4,657 crore and a loss of ₹423 crore, down from ₹590 crore. Used-car sales generated 97.7% of operating income, while procuring vehicles accounted for most expenditure.

Owning inventory gives a retailer greater influence over the vehicle it offers and the buying experience. It also requires money to purchase and prepare cars before recovering that investment through sales. Revenue, gross profit and capital requirements therefore need to be read together.

CarDekho adds a further distinction. It reportedly recorded FY25 group operating revenue of ₹2,795 crore. Its reported ₹266 crore group loss excluded exceptional items and associate losses. The standalone auto-classifieds and financing business remained profitable for a second year before exceptional items, according to company disclosures.

That profitable core makes CarDekho a particularly relevant comparison. Group results also reflect investments in insurance and Southeast Asia, whose economics differ from Indian auto classifieds.

The figures span different periods and business boundaries. They help explain how these companies earn their money, but do not support a straightforward league table based on revenue or losses.

What OLX makes possible

CarTrade’s opportunity starts with distribution it already has. The company reported roughly 76 million average monthly unique visitors across its platforms in Q2, with 96% of traffic organic. Its cash balance stood at ₹1,401 crore.

Those resources give it room to develop services around existing demand. A buyer researching a car may subsequently need inspection, financing and assistance completing the purchase. A dealer may value help sourcing vehicles or selling them faster.

The proposed retail structure in CarTrade’s presentation divides responsibilities between the brand and operating partners. The brand sets the customer promise, inspection and pricing standards, inventory strategy and partner selection. Retail partners handle procurement, stores, refurbishment, sales and delivery.

The Landmark Cars–OLX partnership features in that strategy. Other slides outline buyer tools, escrow and logistics, alongside VAYA’s proposed automotive intelligence services. Some product screens are explicitly illustrative, so the presentation describes a mixture of current activity and development ambitions.

For CarTrade, the attraction is to earn more from transactions its platforms already influence. Partners would perform much of the physical work required to deliver the vehicle.

That makes their economics central to the proposition. Dealers need enough value to support their participation, while CarTrade needs income that justifies its technology and support costs. Customers need to understand who is responsible for the vehicle and the service they receive.

Consistent execution across partners would help OLX turn its reach into a repeatable buying experience.

A useful lesson from Britain

Britain’s Auto Trader illustrates how this expansion can develop.

In its FY26 results, the company said its Deal Builder product generated enquiries that converted into sales at twice the rate of other enquiries. It also acknowledged retailer concerns around the rollout and changes to the product and approach.

Average monthly revenue per retailer increased 5% to £2,995, while average retailer forecourts declined slightly. Auto Trader attributed slower growth later in the year partly to trading conditions and retailer feedback.

The experience shows why dealer participation deserves attention alongside consumer traffic. A platform can identify an opportunity to improve a transaction, but the businesses fulfilling that transaction must find its services useful at the price being charged.

For CarTrade, that is a relevant consideration as it develops additional services around its existing marketplaces.

The next growth opportunity

CarTrade has demonstrated that a marketplace-led auto business can produce profits. OLX’s growth and the group’s improving operating margins provide a credible foundation for expansion.

Its peers make the commercial choices clearer. Cars24 is changing how part of its transaction business operates. Spinny is developing a retail model built around vehicle sales. CarDekho combines a profitable standalone core with a broader investment portfolio.

CarTrade’s next opportunity is to earn more from the journeys its platforms already influence. Dealer adoption, income from additional services and the cost of supporting those services will explain how that opportunity develops.

The latest results show why OLX’s growth and a falling share price can coexist. One division is expanding strongly, while the group’s established consumer business is growing slowly and earnings attributable to shareholders have barely moved.

OLX gives CarTrade a larger opportunity. Turning that opportunity into broader growth and stronger shareholder earnings is the task now facing the company.