UBS says CarTrade Tech’s OLX buy can deliver 5x revenue in five years. Here’s why

UBS brokerage firm has expressed confidence that CarTrade Tech's acquisition of OLX can lead to a fivefold increase in revenue within five years. UBS maintains a Buy rating for CarTrade and has set a target price of Rs 4,000, which represents an upside of more than 27% on its last closing price of Rs 3,147. UBS's base case scenario envisions OLX's emerging monetisation levers generating Rs 11.8 billion in annual revenue by FY31, against a FY26 base of Rs 2.2 billion, yielding a 5x revenue surge.

The brokerage acknowledges that OLX India has been largely viewed through the lens of its performance under previous ownership, which faced cost inefficiencies, an inefficient inventory model, ghost buyers, and unreliable sellers. However, CarTrade's management has made substantial improvements, boosting user experience and enhancing profitability, with operating margins surpassing 30%.

UBS contends that the market has yet to fully appreciate OLX's growth potential and total addressable market (TAM). The brokerage identifies various revenue drivers, including buyer and seller subscriptions, dealer partnerships, financing, escrow services, logistics, and advertising. UBS sees CarTrade as a top mid-cap pick, with the success of OLX's growth strategy potentially acting as a significant re-rating catalyst for CarTrade.

UBS's outlook aligns with eBay's experience, which demonstrates that marketplace value creation hinges more on deeper monetisation than on just gross merchandise value (GMV) growth. Despite stable GMV over the past decade, eBay's revenue nearly doubled as its take rate rose from approximately 7.8% in 2015 to 13.9% in 2025, driven by payments, logistics, trust services, and advertising.

UBS believes OLX can replicate this growth trajectory by intensifying monetisation across the transaction lifecycle, even without a substantial rise in traffic or listings. Currently, monetisation is primarily centred on seller services. UBS anticipates that integrating subscriptions, financing, dealer partnerships, logistics, and advertising into its existing user base can drive revenue growth considerably above the marketplace's inherent growth.

CarTrade Tech is a prominent India-based digital marketplace that facilitates vehicle buying, selling, financing, and valuation. It operates platforms like CarWale, CarTrade, BikeWale, Shriram Automall, and OLX India. CarTrade's shares have been among the year's top performers, rising 75% in the past six months.