Urban Company Limited Q3 FY26 Earnings Call Summary

Summary

Urban Company Limited - Q3 FY26 Earnings Call Summary Friday, January 23, 2026, 4:00 PM IST

Event Participants

Executives 2 Abhay Mathur (CFO), Abhiraj Singh Bhal (CEO & Co-Founder)

Analysts 7 Adil Khan (ICICI Prudential Life), Darshil Javeri (Crown Capital), Deepak Saha (Independent), Devanshu Sampath (Quantum Advisors), Gaurav Rateria (Morgan Stanley), Manish Addukia (Goldman Sachs), Mohit (Analyst), Sachin Dixit (JM Financial), Srinath V (Bellwether Capital), Tushar Behl (GladeBrook Capital)

Financials & KPIs

Geographic & Segment Commentary

• India Consumer Services (Ex-InstaHelp): Core segment grew 21% YoY with absolute adjusted EBITDA reaching ₹44 crores. Growth was driven by new user acquisition (1M+ annually) and festive demand in categories like deep cleaning and beauty. Management targets a long-term steady-state margin of 9-10% for this segment.
• InstaHelp (India): Scaled to 1.61 million orders in Q3 with focus on high-frequency cleaning and housekeeping. While absolute losses increased, the loss per order halved QoQ. The segment is currently live in Delhi NCR, Mumbai, Bangalore, Hyderabad, and Pune via a micro-market densification strategy.
• Native (Products): Revenue surged 93% YoY, though sequential growth was soft as festive e-commerce sales shifted to Q2. The segment benefits from structural advantages like zero-cost customer acquisition via the UC app and shared service fleets. A strategic partnership with Amber was signed to diversify the water purifier manufacturing supply chain.
• International (UAE & Singapore): Delivered 79% YoY like-to-like growth in NTV with an adjusted EBITDA margin of 2%. Management views these markets as profitable and sustainable, echoing Indian consumer behavior but with higher do-it-for-me maturity.

Company-Specific & Strategic Commentary

• Micro-Market Densification: Management emphasized that densification is the primary driver for lowering “burn per order” in InstaHelp. By increasing order density, travel times decrease and partner utilization rises, reducing the need for “earning support” payments to service professionals.
• Technological Integration: Ongoing investments in AI are targeted at improving customer support and partner compliance SOPs. These initiatives are expected to transition semi-variable costs into fixed costs over time, aiding margin expansion.
• Product Diversification: The “Native” segment is evolving from water purifiers to include all branded filters and components. Management is using this to leverage the existing service ecosystem to build a higher-margin product business.
• Instant Services Transition: Management aims to move core categories (electricians, plumbers, beauty) toward instantaneous delivery (within 30-60 minutes) in high-density areas to improve partner utilization and customer stickiness.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

InstaHelp Economics & Trajectory

• Question: What gives you confidence in the Q3 FY28 breakeven target given current losses? (Mohit)
• Answer: We have clear visibility on core business margins expanding and InstaHelp loss per order declining. By Q3 FY28, core profits will be large enough to absorb InstaHelp’s burn even if the latter hasn’t reached breakeven yet (Abhiraj Bhal).
• Question: When will InstaHelp AOVs reach the target 1.8x-2x levels? (Garima Mishra)
• Answer: It happens through “discount laddering.” As cohorts mature from their 1st to 10th order, discounts are removed. Mature micro-markets already show lower loss per order and higher pricing (Abhiraj Bhal).

Core Business Growth

• Question: Is 20% growth sustainable for the core India business? (Manish Addukia)
• Answer: We aspire to grow at 2x the market rate (~10-11%). Growth will come from new user acquisition, deeper geographic coverage, and moving services toward “instant” delivery models (Abhiraj Bhal).

Native Segment Softness

• Question: Why was Native sequential growth soft in Q3? (Deepak Saha)
• Answer: Primarily due to Diwali falling earlier in the quarter, shifting “big sale” e-commerce demand to Q2. It is a seasonal timing issue rather than a structural slowdown (Abhiraj Bhal).

Key Takeaway

Urban Company delivered a strong Q3 FY26, characterized by 42% YoY revenue growth and a significant reduction in the consolidated EBITDA loss. The core India Consumer Services business remains the primary profit engine, generating ₹44 crores in adjusted EBITDA (5.6% margin), while the 93% YoY growth in the Native segment highlights successful brand extension. Strategic focus has shifted toward “InstaHelp,” a high-frequency housekeeping vertical that, despite a ₹61 crore quarterly loss, saw loss-per-order halved through micro-market densification. Management provided a definitive roadmap to consolidated breakeven by Q3 FY28 and a long-term target of ₹1,000 crores in adjusted EBITDA by FY31. While competitive intensity in quick services and the transition to higher AOVs for InstaHelp remain key watch points, the steady margin expansion in core operations provides a robust cushion for ongoing growth investments.