Cars24 reported a contraction in scale and deeper losses for the financial year ended March 2025, even as early FY26 indicators point toward operational stabilisation.
According to consolidated financial statements filed with the Registrar of Companies, gross revenue declined 10 percent to Rs 6,233 crore in FY25 from Rs 6,910 crore in FY24. The slowdown follows a 25 percent year-on-year growth recorded in FY24, highlighting a sharp moderation in momentum.
Core Vehicle Business Slows
Revenue from auction and retail vehicle sales, which contributes roughly 92 percent of total revenue, fell 11 percent to Rs 5,733 crore from Rs 6,432 crore a year earlier. The company attributed the decline primarily to slower auction and retail transactions.
At the same time, financial services income stood at about Rs 215 crore. The growth came largely from Loans24, the firm’s lending vertical that facilitates third-party vehicle loans. Additional revenue streams included service fees, parking charges, insurance facilitation, and warranty services.
Cars24 also generated Rs 125 crore in non-operating income, mainly through interest earned on bank deposits, commercial papers and debentures. As a result, total income reached Rs 6,358 crore for FY25.
The Gurugram-based entity operates under a Singapore-registered holding company that oversees 12 subsidiaries across India, Australia, the UAE, and Thailand. Financial disclosures at the holding level may differ from the Indian filings.
Costs Remain Elevated
On the expenditure side, vehicle procurement continued to dominate, accounting for 81 percent of total costs. Procurement expenses declined 9 percent to Rs 5,555 crore in line with lower volumes.
However, employee benefits expenses rose 15 percent to Rs 604 crore, including Rs 36.5 crore in ESOP costs. Marketing and advertising expenditure dropped 25 percent to Rs 106 crore as the company tightened spending.
Technology investments, legal costs, broker commissions, impairment losses and other overheads pushed total expenditure to Rs 6,898 crore, down from Rs 7,488 crore in FY24.
Despite lower overall spending, the sharper decline in revenue widened losses. Net loss increased 9 percent to Rs 543 crore from Rs 498 crore a year earlier. EBITDA margin deteriorated to negative 6.77 percent, while return on capital employed stood at negative 21.13 percent. The company effectively spent Rs 1.11 to earn one rupee of operating revenue.
As of March 2025, Cars24 India held current assets worth Rs 1,988 crore, including Rs 155 crore in cash and bank balances.
Early Signs of FY26 Recovery
While FY25 reflected pressure, early FY26 performance suggests improvement. The company reported an 18 percent year-on-year rise in adjusted net revenue to Rs 651 crore in the first half of FY26. Adjusted EBITDA loss narrowed 36 percent to Rs 162 crore.
Operationally, Cars24 shifted focus toward retail transactions, which now contribute more than half of the vehicle gross merchandise value. Loan disbursements expanded 38 percent, strengthening its fintech layer. International markets such as the UAE and Australia also recorded active transactions.
Expanding the Ecosystem
In parallel, Cars24 pursued inorganic expansion. It acquired vehicle information platform CarInfo and earlier took over automotive community platform Team-BHP. These acquisitions aim to deepen user engagement and build a broader automotive ecosystem beyond transactions.
Backed by investors such as SoftBank, Alpha Wave, Tencent, and DST Global, the company has not raised fresh capital in the past three years. In 2021, it secured $450 million at a valuation of $3.3 billion.
The current financial year reflects a reset phase. Revenue contraction and margin pressure marked FY25. However, improved early FY26 metrics indicate a strategic shift toward retail-led growth, credit expansion, and ecosystem consolidation.
Source: ISN
