Cars24 Narrows FY26 Adjusted EBITDA Loss to Rs 200 Crore, Revenue Growth Rises 27%

Cars24 Narrows Loss, Sees Growth in Adjusted Revenue and Lending Business

Cars24, a used-car platform backed by SoftBank, has reported a significant improvement in its financial performance for the fiscal year 2026 (FY26). The company has narrowed its adjusted EBITDA loss to Rs 200 crore, down from Rs 475 crore in the previous year. This improvement is attributed to a focus on higher-margin retail and lending businesses, which the company believes will drive growth ahead of its planned initial public offering (IPO).

In the January-March quarter, Cars24 achieved adjusted EBITDA profitability of Rs 20 crore, marking its first profitable quarter at the adjusted EBITDA level. The company's adjusted net revenue grew 27 percent year-on-year to Rs 1,411 crore, driven by the growth of its lending business and retail customer acquisition.

However, the company's vehicle transaction Gross Merchandise Value (GMV) remained largely flat at Rs 7,766 crore compared to Rs 7,800 crore in FY25. According to Shivanshu Makkar, chief financial officer of Cars24, the flat GMV is partly due to the company's shift from an inventory-led wholesale business model to a commission-based structure, as well as the exit from low-margin categories such as scrap cars.

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The company's lending business emerged as a key growth driver in FY26, with disbursals growing around 57 percent in the second half of the year. Lending now contributes roughly 25 percent of total revenue, up from around 20 percent in the previous year.

Cars24 has also seen a decline in retail customer acquisition costs, with a reduction of over 40 percent year-on-year, thanks to traffic from acquired platforms such as CarInfo and VehicleInfo. However, the company has increased spending on artificial intelligence (AI) tools across inspections, engineering, and marketing operations.

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The company has seen significant benefits from its AI initiatives, including a reduction in inspection times from around 60 minutes to 15 minutes. AI has also contributed roughly 300 basis points to EBITDA improvement during FY26.

Cars24 is currently in the process of redomiciling from Singapore to India ahead of its planned IPO, which is expected to take around three-four months. After the redomiciling process is complete, the company will start filing the Draft Red Herring Prospectus (DRHP). The company is targeting an IPO timeline ranging from September onwards to within the next 18 months.