Stay put with CarTrade Tech, despite a slow start on Dalal Street

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CarTrade Tech made a muted stock market debut on Friday. The shares of the company opened for trading at Rs 1,599.80 on the National Stock Exchange (NSE) and at Rs 1,600 on the BSE, compared to the issue price of Rs 1,618, marking a discount of 1.1% or Rs 18. With the market reeling under pressure on taper talks CarTrade Tech is hovering around its listing price. At 12:08 pm the share was quoting 1,590 and on the intraday basis, it made a low of Rs 1,476 and a high of Rs 1,610 on the BSE.

Investors are in a fix as they were expecting decent listing going by the grey market trends. Here is what analysts are advising.

Listing strategy

Saurabh Joshi of Marwadi Shares and Finance suggest investors stay invested from a longer-term perspective. “The company has a profitable and scalable business model with a focus on data science to provide superior solutions and is well-positioned to benefit from the growth of the automotive sector and digitalization,” Joshi added.

Concurring to Joshi’s views, Yash Gupta of Angel Broking also suggested investors should stay put for the short term as the stock can show some recovery in the near future. “The company is trading at price to earnings of 68 times, the company has reported improvement in financial performance in the last 3 years. In the times of covid pandemic company’s net profit has increased from Rs 31 crores in FY2020 to Rs 101 crores in FY2021,” Gupta said.

However, Gupta also cautioned investors not to do fresh buying in the stock.

About CarTrade Tech

Founded in 2009, CarTrade Tech is a multi-channel auto platform provider company. The company operates various brands such as CarWale, CarTrade, Shriram Automall, BikeWale, CarTradeExchange, Adroit Auto, and AutoBiz. The platform connects new and used automobile customers, vehicle dealers, vehicle OEMs, and other businesses to buy and sell different types of vehicles. The company offers a variety of solutions across automotive transactions for buying, selling, marketing, financing, and other activities.

For the financial year ended March 31, 2021, the company reported total revenue of Rs 281.52 crore compared to Rs 266.81 crore in FY19. While its profits quadrupled to Rs 101.07 crore in FY21 compared to Rs 25.92 crore posted in FY19.

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