The CarDekho Group, a firm running a set of car platforms including CarDekho, InsuranceDekho, BikeDekho and PriceDekho among others, said its topline for FY2024 declined a modest 3.5%. Its operating revenues dropped from Rs 2,332 crore in the last fiscal year to Rs 2,250 crore this fiscal. The drop is mainly on account of closure of the used car business, said its founder and CEO Amit Jain in a recent interview.
PC: Business Standard
Despite the overall decline in revenue, the group was able to bring its losses down drastically by 40% with losses coming in at Rs 340 crore as opposed to Rs 566 crore in FY23. It shows there is a strategic shift and the cost management which has helped to stabilize the company’s finances despite all odds in one of the businesses.
A notable bright spot for CarDekho Group has been its insurance segment, InsuranceDekho, which has grown explosively. The insurance division has seen a rise of around eight times during the last fiscal year, reflecting the increasing demand for insurance products in a rapidly changing market. Income from InsuranceDekho has now become the second-largest revenue contributor to the group, accounting for 33% of its total revenue, with earnings soaring to Rs 743 crore.
The transaction business continues to be the largest contributor to CarDekho’s earnings, accounting for 41% of the group’s operating revenue. This covers performance-based advertising for automotive clients, dealer-to-customer networks, and financing options for customers. The transaction business added 16.5% for FY24, at Rs 930 crore, evidencing the resilience of its core automotive services even amidst used car market setbacks.
In addition to the major revenue streams, CarDekho earned money from advertisements and digital marketing that totalled Rs 384 crore. Further, the company also had Rs 176 crore coming from selling used cars as well as Rs 17 crore from other allied services. Then, it also reported non-operating income of Rs 143 crore. Thus, with all these, its revenues for FY24 reached Rs 2,393 crore.
To manage its expenses, CarDekho allocated 26% of its total expenses to advertising and promotion, which decreased by 13.6% to Rs 700 crore. Employee benefits remained steady at Rs 642 crore, including Rs 74 crore in non-cash ESOP costs. The company’s expenditure related to the insurance segment saw a staggering 37-fold increase, reaching Rs 301 crore, reflecting the significant investments needed to support its rapid growth in this area.
Despite the used car business woes, other segments of CarDekho Group have shown resilience. The company’s ROCE and EBITDA margins improved to -9.2% and -9.1%, respectively, which is a positive trajectory toward profitability.
As CarDekho Group goes forward into its future, it remains to tackle complex issues from the automobile as well as insurance market towards an IPO. Total current assets at Rs 3,084 crore and cash and bank balances of Rs 688 crore, it is now at a stage to utilize the given resources in order to ensure further growth and expansion into the following years.
In summary, though the closure of its used car business impacted CarDekho Group’s revenue, significant growth in the insurance segment and effective cost management strategies have helped mitigate losses and maintain a strong market presence.
