Broker's Call has recommended buying CarTrade Tech and raised the target price to ₹3,150 from the current market price of ₹2,601.20. According to reports from The Hindu BusinessLine, the revision is based on promising monetisation strategies for the company's OLX platform. The brokerage expects significant revenue potential through the Elite Buyer programme and other monetisation initiatives.
The brokerage analysis suggests that OLX's Elite Buyer programme could emerge as a meaningful monetisation lever if paid-user subscriptions continue to scale up steadily. As reported by The Hindu BusinessLine, even a modest 5% conversion of the platform's approximately six million monthly buyers at a nominal monthly ARPU of about ₹200 has the potential to unlock approximately ₹70 crore in incremental revenue. OLX's FY26 revenue stood at ₹220 crore with barely any contribution from buyer monetisation.
The brokerage expects significant margin expansion for OLX, with EBITDA margin projected to expand to 40% in FY27E and 47% in FY28E from approximately 31% in FY26. According to The Hindu BusinessLine, unlike customer acquisition-led growth initiatives, the Elite Buyer initiative primarily involves product enhancement, AI capabilities and platform integrations with no meaningful marketing or branding spends required besides spend on technology and corporate overheads. As adoption scales up, a large portion of incremental revenue should flow through to profitability, resulting in strong operating leverage and margin expansion.
The brokerage has raised OLX's FY27E-29E revenue and EBITDA estimates by 11-25% and 17-28% respectively. As reported by The Hindu BusinessLine, the target EV/EBITDA has been increased to 40x from 30x, and this along with a valuation rollover to June 2027E drives up the target price to ₹3,150 from ₹2,340. The business is concurrently working on initiatives around Elite Sellers, verified users, escrow-led transactions and fintech services that could unlock further monetisation opportunities.
