“IPO is not really a destination for us. That's our mindset around the whole IPO conversation,” said Talathi. CarDekho Group’s Chief Financial Officer Neelesh Talathi sees the enterprise turning to a billion dollar enterprise in the coming three to four years with EBITDA margins in the range of mid teens. In an exclusive interview with ETCFO, the Group's Chief Financial Officer discussed their revenue and EBITDA projections for the next three to four years, plans for mergers and acquisitions, strategic investments in AI, prerequisites for an IPO, and their approach to navigating compliance challenges.
Talathi aims for a compound annual growth rate (CAGR) of 35 to 40% in revenue over the next few years.
Technology Investments CarDekho Group CFO discussed how a significant portion of CarDekho’s investments will be directed towards technology, particularly artificial intelligence (AI).
"I estimate that 20-25% of our incremental investments, if not more, will go towards AI technologies, In fact, technology investments already account for 60-70% of the company’s total investment,” Talathi said.
According to the CarDekho Group, they will be over-investing in artificial intelligence rather than under-investing.
He views AI as a medium that can significantly enhance consumer engagement.
Mergers & Acquisitions CarDekho has been actively pursuing acquisitions, having acquired five businesses in the past 12 months. Talathi shared that the company is particularly interested in businesses related to technology, consumer services, and the automobile sector.
However, he stressed the importance of making prudent acquisitions. "I would rather hold onto cash than spend money acquiring something that won’t add value," he said.
Segment wise growth While CarDekho did not disclose specific revenue breakdowns, Talathi highlighted the performance of some segments that are propelling the company’s growth. In the classifieds space, CarDekho holds a dominant market share. The Rupee platform, its financial services arm with USD 2 billion in throughput, is a major growth driver, with plans to expand its scope beyond used cars to include commercial vehicles.
Additionally, Insurance Dekho continues to perform well, he said.
Gearing up for IPO “IPO is not really a destination for us. That's our mindset around the whole IPO conversation,” said Talathi.
He said the first aspect remains whether their business is predictable.
“So one tick we wanted is, can I really be in a place where internally if I say my business is going to grow 50%, it's not going to be 47%. It can be 50 and plus,” said the CarDekho CFO.
Second aspect comes down to profitability. The CFO emphasises on not being dependent after entering the market. "We're really passing on the baton, but we're not going to stay dependent on anyone," he emphasised.
Third, as stated by Talathi is robust governance. “We really want to stand out there, not just as a listed company, as a great business from the financial outcome, and it's a fantastic business from corporate governance. And therefore, that's another sort of tick mark that we wanted out there,” said CFO of CarDekho.
