CarTrade Tech shares rocket 6% as Nomura raises target price. Here are 3 reasons why

Shares of CarTrade Tech rallied as much as 6% to their day’s high of Rs 2,846 on the BSE on Wednesday after international brokerage Nomura reiterated its ‘Buy’ rating and raised its target price to Rs 3,286 from Rs 2,740, implying an upside of 22% from current levels.

The brokerage cited stronger medium-term growth visibility for OLX, driven by higher monetisation, new revenue streams and further margin expansion.

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AI-led monetisation

Following an investor call with the company’s management, Nomura said CarTrade Tech is introducing multiple AI agents that will operate across platforms such as CarWale and OLX. These AI agents are expected to provide services including matchmaking, pricing trend analysis, vehicle inspection and financing, while also integrating with platforms such as WhatsApp to enable simpler and faster transactions.

The brokerage said the AI models will use the company’s proprietary data, which is likely to keep costs lower. It expects these offerings to be monetised through Elite programmes, which could become a significant revenue contributor over the medium term. According to Nomura, the broader objective is to improve monetisation in the largely untapped consumer-to-business (C2B) and consumer-to-consumer (C2C) segments.

3 growth drivers ahead

Nomura said CarTrade Tech introduced used-car financing in partnership with IDFC First Bank in June 2026, noting that financing penetration in the used-car market remains at 20-30%, compared with about 80% in new cars. It added that the financing offering is expected to be extended to other used-vehicle categories.

The brokerage also highlighted escrow and logistics as additional medium-term growth drivers. It said the company plans to introduce these services as new revenue streams without high incremental costs.

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OLX potential strong

Nomura said OLX, with around 30 million monthly active users and nearly 63% of used-car industry listings, has significant medium-term growth potential. Based on the Elite programmes and verification plans introduced so far, the brokerage believes OLX has the potential to at least double its revenue from FY26 levels, assuming a modest 5% adoption rate.

It noted that this estimate does not include potential monetisation from financing, escrow and logistics. Given the asset-light nature of the business, Nomura expects margins to expand further.

Factoring in the stronger outlook, Nomura raised its FY27 and FY28 revenue growth estimates for OLX to 25% and 30%, respectively, from 22% and 25% earlier. It also increased margin estimates to 39.4% for FY27 and 44.1% for FY28 from 39% and 41%, respectively.

The brokerage introduced FY29 forecasts, projecting 30% revenue growth and a 48% margin for OLX. It said the revisions have resulted in a 1-5% increase in its consolidated EBITDA and earnings per share estimates. Nomura also introduced FY29 estimates for the consolidated business, forecasting 20% revenue growth and 30% year-on-year EPS growth.

According to the brokerage, the stock is trading at around 29 times FY28 estimated adjusted EBITDA, which it considers attractive given its estimated EBITDA CAGR of around 32% over FY26-29.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)