The Gurugram-based used cars sales platform recorded a 25% on-year growth in its operating revenue at Rs 6,917 crore. The increase in the company’s operating revenue was mainly driven by a rise in unit sales as well as growing average selling prices, it said.
With this, Cars24 is back on the growth path after reporting a mere 8% year-on-year (YoY) rise in revenue in FY23. The company’s net loss, however, expanded to Rs 498 crore in FY24 from Rs 468 crore a year ago.
Cars24’s financial statements could not be sourced from the Registrar of Companies.
Speaking to ET, Cars24’s cofounder and chief financial officer Ruchit Agarwal said that the company’s mindset, which had become focused on controlling costs following the onset of the funding winter in 2022, has now become growth-oriented again.
He also said that the firm’s investments in technology and data science to improve user conversions have started to pay off and are reflecting in growth. “All the investments that we made in technology and data science to make things more seamless for customers are starting to pay off…because of tech improvement, user conversion has increased,” Agarwal said.
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In August this year, looking to monetise the consumer base it has acquired through its used car sales, Cars24 launched a super app consolidating ancillary services such as vehicle repairs, financing, on-demand chauffeur booking, insurance payments, FASTag distribution and service history records.These investments led to Cars24’s costs on account of its wage bill and tech expenses rising through FY24. While staff costs (excluding Esop expenses) grew 9% YoY to Rs 490 crore, its IT costs increased 20% to Rs 60 crore.
The company, which once sponsored IPL teams, pulled back on marketing costs during fiscal 2024, spending Rs 142 crore, against Rs 163 crore in FY23.
However, the cost head – because of which Cars24’s loss expanded – was depreciation and amortisation, which more than doubled in FY24 to Rs 213 crore.
Agarwal said that this was because the company wrote off certain intangible assets, while also recording an accelerated depreciation on account of shutting down its seven mega refurbishment labs, which are large facilities where Cars24 refurbished and serviced vehicles.
Instead, the company has now opened modular facilities, which are significantly smaller in size and closer to cities, making them more accessible to customers, Agarwal said, adding that Cars24 was also operating its car servicing business from these smaller facilities.
Going ahead, Agarwal said that Cars24, which competes with companies such as Tiger Global-backed Spinny, CarTrade Tech and Peak XV Partners-backed CarDekho, expects to derive better margins as a result of growth from its ancillary businesses.
“While used car sales will remain the core business with structural tailwinds being there for this segment, the ancillary businesses will provide a hedge for the main business in case it slows down because of any external factors,” he said.
ET had reported on November 4 that the startup’s rival Spinny narrowed its net loss in fiscal 2024 to Rs 590 crore from Rs 820 crore in the previous year. The company reported a 14% YoY increase in operating revenue to Rs 3,725 crore for FY24.
