Shares of Urban Company Ltd. fell over 7.5% on Monday, October 19, as the home services operator reported a wider loss compared to last year, even as its core business remained steady. The stock is the top Nifty 500 loser on Monday.
Urban Company reported a net loss of ₹182.48 crore during the September quarter, compared to a loss of ₹59.33 crore during the same quarter last year. Its loss on an Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) basis also widened to ₹187.6 crore from a loss of ₹68.36 crore in the year-ago period.
The company’s losses widened despite its revenue growing by 41% from last year to ₹537.29 crore during the quarter.
Core business of the company remained strong during the quarter with a 28% revenue growth, while its earnings before tax (EBIT) grew more than four-fold from the year-ago quarter. Margins here also expanded sharply to 12.9% from 3.9% earlier.
Revenue for “Native” also grew by 40% year-on-year, while its EBIT loss marginally narrowed. InstaHelp continues to be a core drag on Urban Company’s results, even as its revenue grew to ₹20.5 crore from ₹1.4 crore but its EBIT loss widened to ₹173 crore from a loss of ₹43 crore last year.
InstaHelp’s unit economics also turned out to be worse than its closest competitor Snabbit, with adjusted EBITDA loss for Snabbit at ₹145 crore from ₹174 crore for InstaHelp. Order value per job nearly the same for both the companies at ₹114 and ₹113. However, the loss per order for InstaHelp was much higher at ₹279, compared to a loss of ₹225 for Snabbit.
Nine analysts have coverage on Urban Company, of which four have a “sell” rating, three say “buy” and two have a “hold” rating. Kotak Institutional Equities had recently downgraded Urban Company to “sell” and had a price target of ₹155 for the stock.
Shares of Urban Company are trading 7.5% higher at ₹146.3. The stock continues to cool from levels of close to post-listing highs of ₹200.