In FY21, till December 31, 2020, the company had a profit before tax (PBT) margin of 14.52%, compared to 12.22% in FY20
The company also cut its advertising spending by nearly two-thirds in FY2021 after the pandemic impacted its operations
The company said 88.44% of the unique visitors to CarTrade-owned sites in the financial year 2021 were organic visitors
Automobiles marketplace CarTrade has revealed how it built on the profitability it had first achieved in FY2019 over the course of the past two years. In its draft red herring prospectus for its initial public offering (IPO), CarTrade reported being the only online automobile marketplace in India to achieve profitability in FY20.
It attributed this to the asset-light approach it has taken with a larger focus on technology, and falling fixed costs thanks to economies of scale. This is seen in the consistently improving profit margins at a contribution level and as a whole.
In FY21, till December 31, 2020, the company had a profit before tax (PBT) margin of 14.52%, compared to 12.22% in FY20, 13.28% in 2019 and a negative margin of 1.97% in 2018. Similarly, its adjusted EBITDA margin has improved to 26.46% in FY21 (9 months), from 22.71%, 24.42% and 6.00%, respectively in the previous three full fiscals.
So how did the company shore up these numbers in the light of the pandemic that had already impacted the business?
How CarTrade Curbed Its Customer Acquisition Cost
The primary area for cost-cutting was advertisement,…