CarDekho’s scale nears Rs 1,600 Cr in FY22, used cars form 50% income
- ByStartupStory | January 5, 2023
CarDekho, a platform for buying new and used cars, has grown at a reasonable rate, surpassing Rs 1,600 crore in revenue during FY22. Growth has come at a high cost for most startups in the category, and CarDekho is no exception, having spent Rs 2,170 crore to achieve an 81% increase in collections.
According to the company’s annual financial statements filed with the Registrar of Companies, CarDekho’s gross revenue (revenue from operations) increased by 80.7% to Rs 1,597 crore during the fiscal year ending March 2022, up from Rs 884 crore in FY21 (RoC).
CarDekho generates a variety of revenue streams from the sale and purchase of used cars. Used cars continue to be the most profitable source of revenue, accounting for 50% of total operating income. In FY22, these collections increased by 63.4% to Rs 799 crore.
Bikedekho, Pricedekho, Zigwheels, Gaadi, OTO, and Insurance Dekho are some of CarDekho’s platforms that offer marketing services. It runs promotional campaigns, subscriptions, and lead-based services via its website and mobile applications. In FY22, revenue from these (advertising and digital marketing solutions) services increased by twofold to Rs 505 crore.
The company also provides used car dealers selling cars to end users on its platform with lead generation and transaction facilitation services. During the previous fiscal year, commission earned from these sales increased by 122.6% to Rs 217 crore. It also earns brokerage on insurance policy placement from insurance companies, which increased by 60% to Rs 48 crore during the same period.
Moreover, the company offers a variety of other services such as designing, prototyping, and testing structural components for the automotive industry, as well as online and offline platforms for automobile auctions and software development services. It earned Rs 28 crore in service fees, software development, consulting, call centre operations, and other services.
CarDekho’s total revenue in FY22 was Rs 1,646 crore, which includes operating income as well as interest on investments and other non-operating income of Rs 48.83 crore.
When it comes to costs, the price of purchasing used vehicle stock accounted for 37.6% of all costs. From Rs 481.5 crore in FY21 to Rs 816.8 crore in FY22, this expense increased by almost 70%. From Rs 434.7 crore in FY21 to Rs 573 crore in FY22, spending on employee benefits increased by 31.8%. Importantly, this cost also includes a 76.74 crore rupee employee share-based payment.
Additionally, the cost of customer acquisition and outsourced support (manpower) increased 2.3X and 3.3X, to Rs 408 crore and Rs 156.8 crore, respectively, in FY22. Additionally, the company spent Rs 24.4 crore and Rs 27.6 crore on server hosting and legal & professional fees, respectively, driving its total expenses during the most recent fiscal year up by 70% to Rs 2,170 crore. The total expenditures for FY21 were Rs 1,277 crore.
Given that CarDekho recorded a gain of Rs 289 crore on the loss of control in a subsidiary, the company’s losses decreased by 28% to Rs 246 crore. Due to the fact that this is a non-cash expense, Entrackr has excluded it from the calculation of total losses.
In FY22, CarDekho’s losses increased by 56% to Rs 535 crore from Rs 343 crore in FY21. The company’s operating cash outflows totaled Rs 663 crore. CarDekho’s EBITDA margin and ROCE increased to -28.63% and -25.71% in FY22 thanks to an over 80% increase in revenue. For every rupee of operating revenue, the company had to spend Rs 1.36. Its unresolved losses in FY22 totaled Rs 1,290 crore.
During FY22, Cars24, a competitor of CarDekho, increased its scale by 87% to Rs 5,136 crore while cutting its losses by 29% to Rs 248 crore. After raising $250 million in a Series E round led by private investment firm LeapFrog Investments, CarDekho joined the coveted unicorn club in October 2021. Additionally, the business let go junior and mid-senior level employees last year.
The odd prospect of a smaller company, CarTrade, going public and then queering the market for everyone with its poor stock performance presents itself to the companies in the category. As one of the market’s early adopters and more powerful players, CarDekho will probably aim for profitability in the current fiscal year.It must quickly expand into some of the other areas it has entered because its core used car industry still has razor-thin profits.
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