tumbled 11 per cent on Monday after the company reported a sharp widening in March quarter losses due to continued investments in its quick-service platform InstaHelp.
At 12 noon, the stock traded at ₹125.97 on the , hitting a low of ₹124.40 from the previous close of ₹139.67.
Urban Company shares in focus
The company posted a consolidated net loss of ₹161 crore for Q4FY26 compared with a loss of ₹2.84 crore in the corresponding quarter last year, primarily due to higher spending on expanding InstaHelp and strengthening its instant services business.
Despite the sharp increase in losses, brokerages remained constructive on the company’s long-term growth prospects, while cautioning that investments and competitive intensity in instant services could keep profitability under pressure in the near term.
Global brokerage Goldman Sachs maintained a neutral rating on the stock and marginally raised its target price to ₹140 from ₹139. The brokerage said the company delivered another strong quarter with broad-based growth acceleration across businesses.
Goldman Sachs highlighted that India core services and the international business witnessed strong momentum, while operating leverage improved with expansion in India core EBITDA margins. However, the brokerage noted that overall EBITDA materially missed estimates due to elevated investments in InstaHelp.
The brokerage also sharply cut its long-term EBITDA estimates due to expectations of sustained losses in the instant services segment, although it said Urban Company continues to possess strong competitive moats.
Morgan Stanley maintained an underweight rating and raised its target price to ₹128 from ₹120. The brokerage said the company’s execution remained strong and noted that its market position in home services had become even stronger.
However, Morgan Stanley cautioned that the battle in the instant services market was intensifying amid aggressive capital raising by private competitors, which could result in elevated investments persisting for longer than expected.
Domestic brokerage Motilal Oswal initiated coverage on Urban Company with a neutral rating and a target price of ₹125. The brokerage said the company is well positioned to benefit from the gradual formalisation of India’s fragmented home services market, supported by its nearly 70 per cent share in online home services and strong execution across micro-markets.
Motilal expects India consumer services net transaction value to grow at around 17 per cent CAGR over FY25-37 and sees EBITDA margins improving through operating leverage and higher user retention. However, it said current valuations already factor in much of the growth potential, while risks around competition, disintermediation and slower habit formation remain.
JM Financial maintained a reduce rating with a March 2027 target price of ₹130. The brokerage said that while management retained guidance for consolidated adjusted EBITDA breakeven by Q3FY28 and ₹10 billion adjusted EBITDA by FY31, investors may prefer to wait for better entry levels amid uncertainty around InstaHelp and an unfavourable near-term risk-reward profile.