Urban Company's shares fall over 7%
What's the story
Urban Company's shares fell by over 7.5% today, making it the worst performer in the Nifty 500 index. The decline comes after the home services company reported a wider net loss during the September quarter, despite a steady core business. The company's net loss stood at ₹182.48 crore during the September quarter, compared to ₹59.33 crore in the same period last year.
Financial performance
Revenue growth fails to offset widening losses
Urban Company's EBITDA loss also widened to ₹187.6 crore from ₹68.36 crore in the same quarter last year.
This is despite a 41% growth in revenue from last year, which stood at ₹537.29 crore during the quarter under review.
The company's core business remained strong with a 28% revenue growth and more than a four-fold increase in EBIT compared to the same period last year.
Business impact
Other business segments show mixed results
Urban Company's other business, "Native," also saw a 40% year-on-year revenue growth and a marginal narrowing of EBIT loss.
However, InstaHelp continues to be a major drag on the company's results. Despite its revenue growing from ₹1.4 crore last year to ₹20.5 crore this time around, its EBIT loss widened from ₹43 crore last year to ₹173 crore this time around.
Market comparison
InstaHelp's unit economics lag behind Snabbit's
InstaHelp's unit economics were found to be worse than its closest competitor, Snabbit.
The adjusted EBITDA loss for Snabbit was ₹145 crore as opposed to ₹174 crore for InstaHelp.
While the order value per job was nearly the same for both companies at ₹114 and ₹113, respectively, the loss per order was significantly higher for InstaHelp at ₹279 as against Snabbit's ₹225.
Stock analysis
Urban Company's stock has been on a downward trend
Currently, Urban Company's shares are trading at ₹146.3, down by 7.5%. The stock has been declining from its post-listing high of around ₹200.
Out of nine analysts covering the company, four have given a "sell" rating while three have rated it as a "buy." Two analysts have given it a "hold" rating.