Urban Company reported strong revenue growth in the first quarter of FY27, but its push into instant home services has affected its profits. The company performed well in its main home services business, product sales, and international markets. However, the rapid expansion of InstaHelp, its quick home-service platform, led to heavy losses even as customer numbers and order volumes reached record highs.
The latest quarterly results show two different sides of Urban Company’s business. While its core services continue to make money, the company is spending heavily to build its position in the fast-growing instant home services market. The management believes the business has long-term potential, but profitability is still expected to take several years.
Strong revenue growth, but profits turn into losses
Urban Company posted ₹528.34 crore in revenue from operations during Q1 FY27, a 43.86% increase from ₹367.27 crore in the same quarter last year. The company’s Net Transaction Value (NTV), which measures the total value of services booked on the platform, also grew 42% year-on-year to ₹1,465 crore.
The platform completed 13.2 million orders during the quarter, up 79% from a year ago. It also added more than 1.2 million new customers, making it the highest quarterly customer addition in the company’s history.
Despite this strong growth, Urban Company reported a net loss of ₹92.12 crore. In the same quarter last year, the company had posted a net profit of ₹6.94 crore. The main reason for this change was the sharp rise in expenses, which increased to ₹639.88 crore, much higher than its total income of ₹566.17 crore.
The company’s main India consumer services business continued to perform well. Excluding InstaHelp, this segment earned ₹356.42 crore in revenue and reported an adjusted EBITDA profit of ₹73 crore, showing that the core business remains profitable.
Urban Company’s native products business, which sells water purifiers and smart locks, also showed good growth. Revenue from this segment rose 60% year-on-year to ₹95.28 crore. Although it is still making losses, those losses have reduced compared to earlier quarters.
The company’s international business also delivered strong results. Operations in the UAE and Singapore recorded a 76% increase in NTV to ₹237 crore and generated ₹65.42 crore in revenue while remaining profitable at the adjusted EBITDA level. The Saudi Arabia joint venture also reported strong growth during the quarter.
InstaHelp continues to grow despite heavy losses
The biggest challenge for Urban Company is InstaHelp, its platform that offers home services such as cleaning, mopping and cooking within 15 to 30 minutes.
During Q1 FY27, InstaHelp generated only ₹11.22 crore in revenue, but it recorded a segment loss of ₹131.58 crore.
The platform completed 3.82 million orders during the quarter, which was 43% higher than the previous quarter. However, this fast growth came at a very high cost.
Urban Company earned around ₹29.4 from each InstaHelp order, but it lost nearly ₹346 on every order. This is an improvement from the ₹447 loss per order reported in the previous quarter, but the larger number of orders increased the total losses.
Heavy discounts also reduced the average order value. The Average Order Value (AOV) fell from ₹150 in Q4 FY26 to ₹138 in Q1 FY27, showing how aggressive pricing has become in the market.
Competition is becoming stronger as rivals Snabbit and Pronto are also offering deep discounts to attract customers. By June, the average order values had fallen even more across all three platforms, with some services being offered at prices that many experts believe are difficult to sustain.
Industry reports suggest that the combined monthly cash burn of Urban Company’s InstaHelp, Snabbit and Pronto reached around $16-17 million in June, highlighting the intense competition in the instant home services market.
Company expects InstaHelp to take up to five years to break even
Urban Company has accepted that InstaHelp will need more time before it becomes profitable.
CEO Abhiraj Singh Bhal said the company is working with a worst-case estimate of up to five years for InstaHelp to reach break-even. The company believes that improving service availability and increasing average order values will be important for making the business sustainable.
According to the management, the average order value will eventually need to reach around ₹300 per hour. This would allow service professionals to earn ₹130-160 per hour, or around ₹20,000-22,000 per month, while helping the company maintain healthy margins.
However, analysts are still unsure whether customers in India will be willing to pay much higher prices for services that are currently available at heavily discounted rates.
Experts also point out that instant home services are very different from grocery delivery because they depend on people instead of products stored in warehouses. Companies must ensure workers are available, reduce idle time and pay fair wages, making the business much more difficult to scale.
Brokerages have also expressed caution. Some believe there are risks around execution and customer demand, while others feel Urban Company’s core business has already reached high market penetration in major cities. This makes the success of InstaHelp an important factor for the company’s future growth.
For now, Urban Company’s core businesses continue to perform well and deliver strong growth. But the company’s ability to reduce losses and improve the economics of InstaHelp will remain one of the biggest factors investors will watch in the coming years.