Cars24 India’s revenue fell 18% to ₹5,092 crore in FY26, marking its second consecutive annual decline. Despite the topline hit, the used-car giant still trimmed its net loss by 19% to ₹441 crore, betting big on AI to turn profitability around. This mixed financial picture emerges as Cars24 gears up for a planned IPO.
How We Got Here
Cars24 has seen its core business struggle, with revenue falling for two consecutive years, including a 23% drop in its car auction and retail segment in FY26. To counteract this, the company pivoted heavily into financing through Loans24 and value-added services, while committing significant capital to AI integration since early 2026.
The Numbers
- Value-added services, including insurance and warranties, surged 34% to ₹653 crore in FY26, showing growth outside its core.
- Its lending platform, Loans24, disbursed ₹3,426 crore in loans against cars during FY26, diversifying its revenue streams.
- AI initiatives contributed an estimated 300 basis points to EBITDA, helping keep operating costs flat despite revenue fluctuations.
- Total expenses fell 18% to ₹5,674 crore, primarily driven by a 24% reduction in car procurement costs to ₹4,212 crore in FY26.
- Cars24 committed $20 million to AI through Cars24 Labs in June 2026, aiming to build proprietary products and back early-stage AI startups.
What Happens Next
🇮🇳 Why This Matters for India
For Bangalore's used-car dealers and online auto marketplaces, Cars24's pivot highlights the tough economics of scaling transactions and the growing pressure to integrate AI for margin protection.
The Take
AI is clearly helping Cars24 manage its bottom line and present a better IPO story, but the core used-car auction business is still shrinking significantly. This suggests the market itself might be saturated or fundamentally low-margin, and AI is currently a highly effective band-aid rather than a growth engine.
Source:
MediaNama ↗