Motilal Oswal Reiterates Buy on Neutral Urban Company, Sets Price Target at Rs 125
Urban Company Research Report
Company Overview
Urban Company (URBANCO) is a hyperlocal online home services marketplace offering cleaning, repairs, beauty, and maintenance services. The company benefits from the growth of the broader home services market, which is expected to reach USD 60 billion by FY25, driven by rising urbanization, busier lifestyles, and improving income levels.
Market Analysis
Read also: Oshea Herbals Aims for Rs 650 Crore Revenue Amidst Expansion Efforts
The online full-stack home services market stood at INR 41-43 billion in FY25 and is expected to grow at an 18-22% compound annual growth rate (CAGR) over FY25-30. However, online penetration remains below 1% of the overall industry.
Outlook and Valuation
We believe InstaHelp, a subsidiary of Urban Company, is at an early stage of its business and remains an optionality. Based on our valuation, we assign a price of 1.5x FY28 EV/NTM (Enterprise Value to Normalized Net Tangible Assets), resulting in a per-share value of INR 10. Adjusted for cash, our SoTP-based price is INR 125.
Investor Takeaway
Investors should consider Urban Company's growth potential in the home services market.
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