Shares of CarTrade Tech Ltd rose sharply in Tuesday's trade amid heavy volumes. The stock surged 16.98 per cent to hit a day high of Rs 569.50 over its previous close of Rs 486.85. Around 86,000 shares changed hands today on BSE, which was way more than the two-week average volume of 9,761 shares. Turnover on the counter stood at Rs 4.77 crore, commanding a market capitalisation (m-cap) of Rs 2,601.31 crore.
The sharp movement in the share price came after the Mumbai-based used cars platform said it would acquire online marketplace OLX India's auto sales business for Rs 537 crore.
In a stock exchange filing, CarTrade said that it would acquire 100 per cent stake in Sobek Auto India Pvt Ltd, the entity that houses OLX India's automotive business, in an all-cash deal. The acquisition is expected to be completed in 21-30 days.
"The acquisition is in furtherance of the strategic objectives of the company to undertake investments which provide synergistic benefits to the existing businesses," CarTrade Tech stated.
On technical setup, the counter's 14-day relative strength index (RSI) came at 70.03. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-earnings (P/E) ratio of 69.96. It has a price-to-book (P/B) value of 1.14. The scrip has a one-year beta of 0.76, indicating low volatility.
"The stock looks lucrative given the recent up move but stiff resistance is seen near Rs 560-570. A daily close above Rs 570 will take the counter near Rs 600 levels. On the flipside, failure to breach Rs 570 can drag the counter near Rs 500 levels," said Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers.
"The counter is showing strength on daily and weekly chart with robust volumes. The momentum indicators are suggesting a strong trend ahead. CarTrade stock price may touch the levels of Rs 580 in near term," said market expert Ravi Singh.
"CarTrade Tech is bullish but also overbought on the daily charts with next resistance at Rs 570. A daily close below support of Rs 532 could lead to target of Rs 473 in the near term," said AR Ramachandran from Tips2trades.
Sobek is engaged in the business of running an automotive digital platform and a classifieds internet business. On June 30, 2023, Sobek has acquired the classifieds internet business from OLX India on the terms and conditions agreed under a business transfer agreement.
Meanwhile, Indian equity benchmarks rose in early deals today, led by gains across all sectors. Mid- and small-cap shares were positive as Nifty Midcap 100 moved 0.65 per cent higher and small-cap climbed 0.64 per cent.
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