Analyst's Diary: Revving up its way towards profitability

Profits have often eluded platform companies. Some might say it's the fault of the stars. Others say the platform business model is flawed. But most investors agree that if you're investing in a platform company, you should be prepared for jittery margins and flashes of red in the bottomline now and then. CarTrade Tech, a platform for buying and selling vehicles, is no exception. While the company has occasionally glimpsed profits, they have mostly been due to other income. Margins have been a coin toss. Moreover, unlike Zomato, the market hasn't forgiven the stock for volatile earnings, and its share price has fallen around 50 per cent from its IPO price. A platform company operating in the red is nothing new. But what if there's a chance that CarTrade Tech might just woo profits enough to stay? To know why, we must first explore the various segments of CarTrade Tech and why it has long suffered from margin woes. A bit about CarTrade Tech At its core, CarTrade Tech is like any platform company — it provides online marketplaces that connect sellers and buyers. Until the first half of FY23, it had the following business segments: Consumer segment: This includes the CarWale and BikeWale platforms, where OEMs and dealers sell new and used vehicle