Urban Company's best quarter post its IPO?

**Shrehith Karkera** (0:01)
Hello folks, you're tuned in Finshots Daily. In today's episode, we tell you how far Urban Company has come since its IPO and why it's pouring money into a segment that seems to be dragging down its profitability.
But before we begin, here's a quick note from Team Ditto. This weekend, we're hosting a free 2-day Insurance Masterclass that helps you build real financial security by understanding health and life insurance the right way. Well, the Masterclass is completely free and you can head to the link in the description to register while you see it last. Okay, let's start with the story.
When we covered Urban Company's IPO last year, we ended up with the line.
We ended with the line. For now, it looks like an exciting bet, but what happens once a stock hits the bonuses is anybody's guess. Almost a year has passed since and the company has also reported its Q1 FY27 results a few days ago, which makes this the perfect time to see how that bet is playing out.
So how do the numbers look? In one word, mixed.
On one hand, the business is growing rapidly. Revenue from operations jumped 44% year on year to 528 crore rupees. On the other hand, profitability has taken a hit. Its operating profit or adjusted EBITDA swung from a profit of 21 crore rupees a year ago in Q1 FY26 to a loss of 65 crore rupees. That's still an improvement from the previous quarter's loss of 98 crore rupees. But it's a loss nonetheless.
The same trend shows up in other metrics too. Since the IPO, UC's net transaction value, that's NTV, or the total value of all orders and services before commissions, fees and other adjustments has climbed steadily from 1,031 crore rupees to 1,465 crore rupees. But EBITDA margins haven't followed the same path.
Instead of improving consistently alongside NTV, they've zigzagged between gains and setbacks. They were at minus 0.5% around the time of the IPO, improved for a while, dipped again, and now stand at minus 6.3% in QI, FI27. Net profit tells a similar story. UC reported a 92 crore rupees loss this quarter, compared with a 7 crore rupees profit a year ago. That's better than the 161 crore rupees loss in the previous quarter, but again, still a loss.
But despite these far from clean results, the management calls QI and FI27 one of the strongest quarters in the company's history. Wait, what are they talking about? You may ask. Well, the management is mostly referring to the strong growth in revenue from operations and NTV that we just spoke about. But there's another reason they're sounding so optimistic. They're asking investors to look at the business without Insta help. And from that lens, the numbers do look far more increasing. To put that in perspective, the core business's adjusted EBITDA more than doubled your on-year to 67 crore rupees during the quarter, and nearly tripled from the previous quarter. Operating margins improved too, rising from 3% in Q1 FY26 to 4.8% now. In fact, almost every other segment seems to be moving in the right direction. The core home services business native, which is its smart home appliances business like cell water purifiers, and even its internal operations all reported growth in both NTV and adjusted EBITDA margins. The only one that doesn't seem to be humming this tune is, well, Insta-Help, UC's quick commerce version of domestic house help services. Just look at how this business has evolved since it began as a pilot in Mumbai in March last year. Quarterly orders have exploded from just 72,000 in Q1 FY26 to over 38 lakh now. Naturally, revenue has climbed alongside it. But so have the losses. Adjusted EBITDA losses have increased from 1 crore rupees to 13 crore rupees. That said, there is one encouraging trend though. Because orders are growing so quickly, those losses are now being spread across a much larger base. As a result, the adjusted EBITDA loss per order has narrowed from 447 rupees to 346 rupees a quarter. Now, that's a huge improvement from the 1,374 rupees loss per order when the business first launched. In other words, as order volumes and NTV continue to grow, the business should eventually inch closer to breakeven. But what will that journey actually look like? And more importantly, when will it get there? To understand that, we first need to understand why UC is willing to keep betting on Insta Health for the long haul, even though it's dragging down the company's profitability today.
For starters, Insta Health's business model is fundamentally different from UC's traditional business and arguably a tougher one to make profitable. That's because UC's core business revolves around scheduled higher-ticket services like salon treatments, appliance repairs, home deep cleaning, plumbing, etc.