The brokerage has maintained its Buy rating and a target price of Rs 4,000, an upside of over 27% from the last close of Rs 3,147.
“In our upside scenario, with modest increases in buyer and seller monetisation, along with gradual adoption of dealer partnerships, financing and logistics services, we estimate OLX’s emerging monetisation levers can generate Rs 11.8 billion in annual revenue by FY31 against an FY26 base of Rs 2.2 billion, rising 5x. That would be 43% above our FY31 OLX revenue estimate, showing the upside potential for OLX,” the brokerage said in a note.
CarTrade flipped the script – The brokerage is of the view that the market continues to assess OLX India based on its performance under previous ownership, when the platform struggled with cost inefficiencies, a flawed inventory model, ghost buyers and unreliable sellers. Despite these challenges, OLX had become synonymous with used-goods platforms in India and had virtually established a monopoly in the segment.
Since acquiring the business, CarTrade’s management has addressed most of these issues, improved the user experience and significantly enhanced profitability, with operating margins exceeding 30%.
However, discussions with investors suggest that the market has yet to fully recognise OLX’s growth potential and total addressable market (TAM). UBS sees several potential revenue drivers, including buyer and seller subscriptions, dealer partnerships, financing, escrow services, logistics and advertising. UBS believes successful execution of OLX’s growth strategy could serve as a major re-rating catalyst for CarTrade, which remains one of its top mid-cap picks.
OLX’s eBay moment – UBS believes eBay’s experience shows that marketplace value creation depends more on deeper monetisation than on gross merchandise value (GMV) growth. Despite broadly flat GMV over the past decade, eBay nearly doubled its revenue as its take rate increased from around 7.8% in 2015 to 13.9% in 2025, driven by payments, logistics, trust services and advertising.The brokerage believes OLX can follow a similar path, with meaningful revenue growth possible without a significant increase in traffic or listings. Instead, deeper monetisation across the transaction lifecycle could drive growth. OLX remains at an early stage, with monetisation largely concentrated in seller services. UBS believes adding subscriptions, financing, dealer partnerships, logistics and advertising to its existing user base could help OLX deliver revenue growth significantly above the underlying growth of its marketplace.
CarTrade Tech, a leading India-based digital marketplace, facilitates buying, selling, financing, and valuation of vehicles. With platforms like CarWale, CarTrade, BikeWale, Shriram Automall, and OLX India, it connects consumers, dealers, OEMs, and financial institutions.
CarTrade Tech shares have been one of the standout performers this year, up 75% in the last six months.
Disclaimer: This article has been written by Veer Sharma, who is not a SEBI-registered Research Analyst or an Investment Adviser. Veer Sharma and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here.
