Urban Company Jumps 18% As Morgan Stanley Bets On Core Business Growth

Shares of Urban Company surged as much as 17.7% to ₹152.20 apiece on the BSE today after Morgan Stanley upgraded the stock to ‘Overweight’, citing improving growth in its core India consumer services business and international operations despite continued investments in InstaHelp. 

The stock later pared some gains amid profit booking to trade 13% higher at ₹146.70 apiece at 10:26 IST. The company’s market capitalisation stood at ₹22,623.7 Cr (about $2.3 Bn) at the time. 

Morgan Stanley upgraded Urban Company to ‘Overweight’ from its earlier rating and raised its target price to ₹165 from ₹128. 

The brokerage said the company’s core India consumer services business and international operations are witnessing improving growth momentum, while sustained losses across the quick home services segment could accelerate industry consolidation and strengthen InstaHelp’s competitive position over the longer term. 

On July 31 (Friday), Urban Company posted a consolidated net loss of ₹92.1 Cr for Q1 FY27 as against a net profit of ₹6.9 Cr in the year-ago period, as it continued investing aggressively in InstaHelp.  

Revenue from operations jumped 43.9% YoY to ₹528.3 Cr, while adjusted EBITDA loss stood at ₹65 Cr, largely due to continued investments in InstaHelp.

InstaHelp remained the company’s biggest investment area during the quarter. The business clocked 3.82 Mn orders, up 43% sequentially, while posting an adjusted EBITDA loss of ₹132 Cr. Urban Company invested ₹132 Cr in the segment during the quarter to strengthen its market position. 

During the earnings call, CEO and cofounder Abhiraj Singh Bhal said InstaHelp is strategically important because it increases customer engagement by shifting usage from monthly or quarterly transactions to weekly interactions. 

Bhal added that the addressable market for InstaHelp is estimated at ₹7,000 Cr-₹12,000 Cr across the top 15 Indian cities. However, he said that the business is structurally lower-margin than Urban Company’s core operations and is unlikely to turn profitable over the next five years. 

Meanwhile, Urban Company’s core India consumer services business, excluding InstaHelp, continued to strengthen. The segment’s NTV grew 29% YoY to ₹1,056 Cr, crossing ₹1,000 Cr in quarterly NTV for the first time. Adjusted EBITDA margin improved to 6.9% from 5.2% a year ago.

The management said growth acceleration in the core business was driven by improving customer trust, better fulfilment times, stronger partner earnings and increased density across micro-markets. It added that growth was achieved alongside margin improvement rather than at the cost of profitability.

Urban Company’s international business also maintained strong growth momentum. Its NTV rose 76% YoY. UAE and Singapore operations delivered profitable growth, while the company expects its Saudi Arabia joint venture to move towards profitability in the coming quarters.

The company ended the June quarter with ₹2,019 Cr in cash and treasury investments. It reiterated its guidance of achieving consolidated adjusted EBITDA breakeven by Q3 FY28 and delivering ₹1,000 Cr in adjusted EBITDA by FY31. 

This comes at a time when India’s instant home services market continues to gain momentum. InstaHelp and Snabbit have crossed the 1 Lakh daily order mark, highlighting the rapid adoption of on-demand household services.

Snabbit said it is now completing over 1.15 Lakh jobs a day, while Urban Company said InstaHelp crossed 1 Lakh delivered orders in a single day on August 2. The category is seeing intensifying competition as players scale operations and invest heavily to capture market share.

In July, InstaHelp led the segment with around 1.9 Mn monthly orders, followed by Snabbit at 1.85 Mn, and Pronto at 1.25 Mn. Together, the three platforms processed nearly 5 Mn orders during the month.

The post Urban Company Jumps 18% As Morgan Stanley Bets On Core Business Growth appeared first on Inc42 Media.