Urban Company Stock Rises After UBS Initiates Coverage with 'Buy' Rating
Global brokerage UBS initiated coverage of home services platform Urban Company with a 'Buy' rating and a target price of ₹180, leading to an 8% jump in its stock. UBS likened the sector's potential growth to that of Blinkit.
Shares of home services provider Urban Company surged as much as 8.1% to ₹157.35 on the BSE after global brokerage UBS initiated coverage on the company with a 'Buy' rating and set a target price of ₹180. The brokerage's positive outlook contributed to the stock's gain.
UBS suggested that India's online home services market might be entering a "Blinkit moment," indicating a period of accelerated adoption and growth. The firm forecasts Urban Company's net transaction value (NTV) to grow at a compound annual growth rate of 32% from ₹4,300 crore in FY26 to approximately ₹10,000 crore by FY29. UBS highlighted the company's strong product-market fit, balance sheet, execution track record, and focus on unit economics as key drivers for future growth.
This favorable report follows a recent upgrade from Morgan Stanley, which also raised its target price for Urban Company and cited improving growth momentum. Concurrently, Urban Company's Middle East division has partnered with Unicommerce Esolutions to enhance its e-commerce operations in Saudi Arabia and the UAE, supporting its international expansion efforts where NTV saw a 76% year-over-year increase in the June quarter.
Financially, Urban Company reported a consolidated net loss of ₹92.1 crore for Q1 FY27, compared to a profit in the prior year, largely due to investments in its new instant services vertical, InstaHelp. However, the net loss narrowed from the previous quarter. Adjusted EBITDA also reflected a loss of ₹65 crore, down from a profit a year prior. Excluding InstaHelp, the core business showed a significant increase in adjusted EBITDA profitability. The company maintains its guidance to achieve consolidated adjusted EBITDA break-even by Q3 FY28.