Shares of Urban Company rallied as much as 12% on Monday, August 3, opening at ₹136.33 against a previous close of ₹129.39 and hitting an intraday high of ₹152.21 on the NSE. According to NDTV Profit, the stock last traded 12.855 higher at ₹147.97 on the NSE, significantly outperforming the 0.88% rise in the Nifty 50 benchmark. The stock has demonstrated strong momentum with gains of 12% in one week, 11% in one month, and nearly 12% on a year-to-date basis. The company commands a market capitalization of ₹22,765.67 crore, as per NSE data, reflecting the market's renewed confidence in the home services platform.
The home services platform reported strong growth across all business segments for Q1FY27. As reported by CNBC TV18, revenue grew by 44% from last year to ₹528.34 crore. The India business revenue grew 31% from last year, with margins expanding significantly to 23% from 14.8% last year. The Native business demonstrated exceptional growth of 60% from last year, with its EBIT loss narrowing. The international business revenue grew 82% year-on-year, achieving a positive EBIT compared to a loss in the previous year. However, the company reported a net loss of ₹92 crore for the quarter, with losses also widening on the EBITDA front.
Morgan Stanley has delivered a double upgrade to Urban Company, upgrading the stock to 'Overweight' from 'Underweight' - a significant improvement from its initial coverage that began in October 2025. According to NDTV Profit, the brokerage has raised its price target to ₹165 from ₹128, implying an upside potential of 28% from current levels. The upgrade is based on structural expansion in the company's growth rates across its core India consumer services (excluding Instahelp) and its international operations. Analysts expressed increased confidence in profitability across segments, driven by strong execution, which Morgan Stanley is weighting more heavily than external competition factors for the Instahelp business.
The Instahelp segment showed mixed but improving results during the quarter. As reported by CNBC TV18, Urban Company reported a 43% sequential jump in orders to 3.82 million for Instahelp. The EBITDA loss per order improved significantly to ₹346 from ₹447 in the previous quarter. However, the average order value declined to ₹138 from ₹150 earlier. The management expects losses to remain elevated as it is prioritizing market leadership over everything else going forward. Morgan Stanley noted that elevated losses in Instahelp might prompt earlier consolidation, suggesting potential for faster profitability realization.
According to CNBC TV18, seven analysts currently cover Urban Company, with two analysts each having 'buy' and 'sell' recommendations respectively, while three others maintain 'hold' ratings. The brokerage maintains its belief that profitability targets could be achieved earlier than management guidance across the consolidated business. Morgan Stanley expects consolidated return on capital employed to normalize above 20% once the company reaches steady-state margins. With the Return on Capital Employed (ROCE) expected to normalize at 20% or more in a steady state, Morgan Stanley considers the starting point of valuation to be reasonable following a period of significant underperformance, making the stock a compelling re-rating candidate.
