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Urban Company’s shares declined sharply after the company reported a wider loss in its first quarterly results since listing. Despite a strong increase in transaction value from its domestic consumer services, profits fell significantly due to losses from its newly launched “Insta Help” vertical, which allows users to book domestic workers within minutes. The company has said that continued investment in this business will keep affecting its profits in the coming quarters. Analysts have expressed concerns about the unclear path to profitability.
Urban Company's stock dropped notably in early trade after it announced its first quarterly results since listing, showing a steep rise in losses. The company's shares fell more than 6% and touched around INR 147.01 at one point, compared with its listing price of INR 162.25 in September. By mid-morning, the stock was still trading lower by about 2%. Advertisement
The company posted a consolidated loss of INR 593.3 million (approximately USD 7 million) for the September quarter, compared with a loss of INR 18.2 million during the same period last year. In the previous quarter, covering April to June, Urban Company had reported a profit of INR 69.4 million, indicating a significant swing in performance.
Urban Company's domestic consumer services division, which includes beauty, cleaning, and appliance repair services, recorded a 19.3% increase in net transaction value. However, profit from this segment fell by more than 61%, mainly due to higher expenses and the impact of new business investments.
The company identified its recently launched 'Insta Help' vertical as a major contributor to the losses. This service enables customers to book domestic help within 15 minutes and is part of Urban Company's effort to expand into quick, on-demand services. The vertical, however, reported a loss of INR 429.1 million in the quarter, significantly affecting the company's overall financials.
Analysts from Morgan Stanley noted that there is still limited visibility on when this new segment might achieve break-even or how much further investment will be required to support it. Urban Company mentioned in its statement that it plans to continue investing in 'Insta Help' and other emerging business lines, even if it means continuing to post losses in the next few quarters.
Since listing in mid-September, Urban Company's shares have fallen over 9%, trading below its debut price. The company had gone public with a strong premium of about 57.5%, raising investor expectations of consistent growth and profitability.
Before its listing, Urban Company had reported improved full-year performance with revenues growing by around 38% and a net profit in the preceding fiscal year. However, the company has now shifted focus toward building scale and expanding service categories, which has temporarily impacted its earnings.
Source Reuters
5th Jun, 2025
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