Revenue Retreat After a Year of Growth
Cost Controls Tighten, but Profitability Remains Elusive
Table of Contents
- Revenue Decline in FY25
- Business Mix and Income Streams
- Cost Structure and Expense Trends
- Profitability and Financial Ratios
- Global Structure and Recent Acquisitions
- Outlook for FY26
After posting strong growth a year earlier, India’s used-car marketplace Cars24 experienced a reversal in fiscal year 2025, reporting a 10 percent decline in operating revenue and a modest widening of losses. The Gurugram-based company, once emblematic of India’s digital auto boom, is now navigating a more restrained consumer market and recalibrating its cost structure in pursuit of sustainability.
Revenue Decline in FY25
Cars24’s gross revenue fell to ₹6,233 crore in FY25, down from ₹6,910 crore in the previous fiscal year, according to consolidated financial statements filed with the Registrar of Companies. The drop marks a notable shift from FY24, when the company had recorded a 25 percent year-on-year increase in scale.
The company’s core business — selling pre-owned vehicles through its auction and retail platforms — continued to account for the bulk of revenue, contributing roughly 92 percent of total earnings. However, this segment declined 11 percent year-on-year to ₹5,733 crore, compared with ₹6,432 crore a year earlier.
Ancillary services provided some diversification but remained relatively modest in scale. Financial services income, largely interest earned through Loans24, its lending vertical that facilitates third-party loans, amounted to approximately ₹215 crore during the fiscal year. Additional income came from service fees, parking charges, insurance facilitation and extended warranties.
Non-operating income added ₹125 crore, derived primarily from interest on bank deposits, commercial papers and debentures. Together, these streams brought total income for FY25 to ₹6,358 crore.
Cost Structure and Expense Trends
Procurement of vehicles remained the company’s largest cost center, accounting for 81 percent of total expenses. Reflecting the slowdown in sales, procurement costs declined 9 percent to ₹5,555 crore.
The company trimmed discretionary spending in several areas. Marketing and advertising expenses were cut sharply, falling 25 percent to ₹106 crore, suggesting a more conservative approach to customer acquisition amid softer demand.
Yet other expenses rose. Employee benefit costs increased 15 percent to ₹604 crore, including ₹36.5 crore in employee stock option (ESOP) expenses. Technology investments, legal costs, broker commissions, impairment losses on financial assets and other overheads contributed to total expenditure of ₹6,898 crore — down from ₹7,488 crore in FY24, but not enough to offset the revenue decline.
Profitability and Financial Ratios
The contraction in operations led to a widening of losses. Net loss increased 9 percent year-on-year to ₹543 crore, compared with ₹498 crore in FY24. On a unit basis, the company spent ₹1.11 to generate every rupee of operating revenue, underscoring ongoing efficiency challenges.
Profitability metrics deteriorated accordingly. Return on capital employed (ROCE) fell to -21.13 percent, while the EBITDA margin stood at -6.77 percent.
As of March 2025, Cars24 reported current assets of ₹1,988 crore, including ₹155 crore in cash and bank balances — a cushion that offers some operational flexibility despite sustained losses.
Global Structure and Recent Acquisitions
Cars24 operates under a Singapore-registered holding company that oversees 12 subsidiaries across India, Australia, the United Arab Emirates and Thailand. Financial disclosures for the Singapore entity may differ from those filed in India.
The company has not raised external capital in the past three years. In December 2021, it secured $450 million at a valuation of $3.3 billion. Major investors include SoftBank, Alpha Wave, Tencent and DST Global.
Strategically, Cars24 has pursued acquisitions to expand its ecosystem. It recently acquired vehicle information platform CarInfo, marking its second deal within a year after taking over automotive community platform Team-BHP.
Outlook for FY26
Despite the fiscal setback, the company reported improved momentum in the first half of FY26, claiming an 18 percent year-on-year rise in adjusted net revenue to ₹651 crore and a 36 percent reduction in adjusted EBITDA losses to ₹162 crore.
Whether these early signs signal a durable turnaround remains uncertain. For now, Cars24 appears to be balancing expansion ambitions with financial discipline — a delicate act in an evolving and increasingly competitive pre-owned car market.
Edited by – Tanishka Chauhan
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