Motilal Oswal believes the ~25%+ correction from Urban Company's Sep'26 peak offers an attractive entry point, with the risk-reward improving as core business momentum strengthens and InstaHelp provides incremental growth potential. The brokerage is more optimistic than the company on InstaHelp's TAM and believe that this category is still at an early stage of development and could scale up meaningfully beyond current estimates.
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Motilal Oswal Report
Domestic brokerage firm Motilal Oswal has upgraded Urban Company to Buy and has set a target price of Rs 165, implying a potential upside of 22%. The brokerage's optimism is based on-
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- accelerating growth in the core business provides a healthy runway for continued expansion, and we agree with the company's strategy of deepening penetration and improving market density;
- the brokerage is more optimistic than the company on InstaHelp's TAM and believe that this category is still at an early stage of development and could scale up meaningfully beyond current estimates; and
- the ~25%+ correction from the stock's Sep'26 peak offers an attractive entry point, with the riskreward improving as core business momentum strengthens and InstaHelp provides incremental growth potential.
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The brokerage also believes that the company's core business growth has improved, with margin expansion supported by supply densification, better partner utilisation and operating leverage.
Motilal Oswal expect this momentum to sustain, with acceleration in Q3 FY27. While its FY28 estimates factor in higher InstaHelp investments and consolidated adjusted Ebitda breakeven by Q3 FY28, Motilal Oswal sees upside risk to estimates from the potential expansion of InstaHelp's addressable market and improving unit economics.
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