Urban Company Limited

Urban Company reported a robust Q3 FY26, with consolidated Net Transaction Value (NTV) growing 36% year-on-year to ₹1,081 crores, excluding the impact of KSA. Revenue from operations also saw a significant increase of 42% year-on-year, reaching ₹383 crore, again excluding KSA. Despite these strong top-line figures, the consolidated adjusted EBITDA for the quarter was a loss of ₹17 crores, primarily due to strategic investments in new growth areas. However, excluding the InstaHelp losses, the core business delivered an adjusted EBITDA profit of ₹44 crores, underscoring its underlying strength.

The India Consumer Services segment, excluding InstaHelp, demonstrated healthy growth and improved profitability. NTV for this business segment grew 21% year-on-year. Adjusted EBITDA margins improved to 5.6% of NTV, a notable increase from 4.4% in the same period last year and sequentially up from 2.4% in Q2. This performance was attributed to strong new user additions, steady revenue retention, healthy festive season demand, and continued operating leverage. Management expects full FY26 margins for this segment to be slightly ahead of FY25, with continued increases from FY27 onwards, targeting 9-10% of NTV in the long term.

The Native business continued to show strong year-on-year demand, with NTV growing 93%. This growth was accompanied by meaningful margin improvement compared to the same time last year. While Q3 saw softer sequential growth, management clarified this was primarily due to the festive season (Diwali) occurring earlier in Q2 this financial year, pulling demand forward. The focus for Native remains on scaling the business well and improving its margin profile through operating leverage, covering fixed costs like R&D, product development, and marketing as scale increases. Structural advantages, such as sales from its own app and cross-utilization of service professionals, are expected to drive long-term profitability.

Urban Company continues to invest significantly in InstaHelp, its high-frequency household services vertical. InstaHelp scaled rapidly to 1.61 million orders in the quarter, generating ₹28 crores in Net Transaction Value. The adjusted EBITDA loss for InstaHelp stood at ₹61 crores, with absolute losses increasing quarter-on-quarter. However, the adjusted EBITDA loss per order reduced significantly from ~₹760 in Q2 to ~₹381 in Q3. Management is committed to further reducing loss per order over time^⏳, driven by improving average order value, service partner utilization, and micro-market densification. The company aims for InstaHelp to break even by FY31, with overall consolidated EBITDA break-even targeted by Q3 FY28, supported by the profitability of other core businesses.

International markets, specifically UAE and Singapore, continued to perform well, delivering a 79% year-on-year growth on a like-to-like basis in NTV, with an adjusted EBITDA margin of 2% of NTV. The company noted that these markets share similarities with India in customer behavior and supply-side dynamics, and learnings from these markets are expected to benefit the India business. Management is very excited about these markets, believing they have strong long-term headroom for profitable growth and expect year-on-year margin expansion, albeit 1-2 years behind India's maturity curve.

Urban Company's long-term vision includes achieving ₹1000 crores in adjusted EBITDA by FY31, primarily driven by India Consumer Services, International, and Native businesses. The company aims for its core India services business to grow at least 2x the market growth rate (currently 10-11%). Key drivers for this growth include a superior proposition (faster, cheaper, better services), densification benefits passed to consumers, and investments in quality, technology, and marketing for new user acquisition and coverage expansion. The company is also exploring making more core services instantaneous, leveraging learnings from InstaHelp.