Urban Company Draws Mixed Ratings: MS Initiates ‘Underweight’, GS Starts At ‘Neutral’

Urban Company Ltd. has drawn mixed initial coverage from global brokerages, with Morgan Stanley initiating an "Underweight" rating and a target price of Rs 117, while Goldman Sachs has started with a "Neutral" rating and a target of Rs 140.

Morgan Stanley acknowledges Urban Company’s differentiated business model, large addressable market, and competitive moats, but believes that “growth is in the price”, citing supply constraints and near-term profitability drag from investments in InstaHelp.

Goldman Sachs, on the other hand, highlights the company’s strong execution track record, projecting a 24% revenue CAGR over FY25–30 and sees a long runway for growth compounding, though it notes that premium valuations already reflect much of the optimism.

Both brokerages agree on the company’s robust fundamentals, with MS calling Urban Company a “structural winner” and GS pointing to optionalities in international and B2C segments.

• Initiate Underweight with target price of Rs 117

• Differentiated business; steady growth in the price

• Company has a large addressable market in online home services

• This is supported by competitive moats and an experienced founding team

• Initiate Underweight given growth is in the price

• Expect core India consumer services NTV to grow at a healthy CAGR of 18-22% over FY25-28

• High churn/supply constraints to drive growth at a calibrated pace

• India consumer services (ex Insta) to reach 30% adj EBITDA margin medium term

• Investments in Instahelp to drag profitability near term

• Valuation multiples should sustain in line with strong and established business models in India Internet

• Initiate Neutral with target price of Rs 140

• Strong business model and execution track record

• Expect a 24% revenue CAGR over FY25-30E

• Believe the strength of the business model and outlook is already reflected in the company’s premium valuations

• Growth compounding has a long runway

• InstaHelp incremental growth driver but not meaningful to SOTP (yet)

• Optionalities from international segment and B2C products

• Robust revenue growth with strong operating leverage

The scrip fell as much as 3% to Rs 153 apiece. It pared losses to trade 2.20% lower at Rs 157.83 apiece, as of 09:37 a.m. This compares to a 0.83% advance in the NSE Nifty 50 Index. Total traded volume so far in the day stood at 0.04 times its 30-day average. The relative strength index was at 49.72.