Recently, Urban Company announced the financial performance of the third quarter of fiscal year 2026, which is characterized by a season of intense growth and strategic investment. InstaHelp is a new vertical that was recently introduced, offering 15-minute on-demand housekeeping, and has become a central point of focus in the company’s growth strategy. Although the volume and revenue of the vertical have experienced a remarkable increase, the growth has been at a high price, with the platform experiencing a growing magnitude of operating losses.

Financial performance and profitability

Urban Company recorded a significant increase in revenue in its InstaHelp segment, which saw a sharp increase in revenue to ₹6.8 crore in the December quarter (Q3 FY26). This is a significant improvement over the last few quarters since the service is less than a year old and is still making inroads among the urban consumers who are in need of instantly delivering household services. The Net Transaction Value (NTV) of its segment also increased strongly to ₹28 crore as compared to ₹10 crore in the previous quarter.

The scale of the vertical is also supported by the fact that its volume of the order increased to 1.61 million orders at the conclusion of the quarter. This is a huge leap relative to the 0.58 million orders registered in the September quarter, which represents a sequential growth of about 170%.

Although with this rapid scaling, InstaHelp is left as the main draw on the consolidated profitability of the company. The vertical realized an adjusted loss in terms of EBITDA of ₹61 crore during Q1 when it was incurred, whereas it had incurred a loss of ₹44 crore in Q2 and only ₹10 crore during its inception in Q1 FY26.

Strategic investments and Core business strength

Urban Company has an Indian-first strategy to rapid scaling, which has contributed significantly to the expanding deficit in the InstaHelp business. To dominate the high-frequency housekeeping category, the company has made massive investments in supply onboarding, service partner training, and expansion of operations. The platform has employed high rates of discounting to attract new users and consumer habits in an ever-competitive market.

Urban Company has high competition with venture-backed startups, including Snabbit and Pronto, in the instant home services space. These competitors are also aggressively capitalizing on to finance their own expansion to provide a high-burn environment within the industry. According to CEO Abhiraj Singh Bhal, the present rate of discounting is higher than what the company would normally have, but a tactical necessity to establish market leadership and achieve user adoption at this important growth stage.

In spite of the losses that are incurred by InstaHelp, the core operations of the Urban Company are healthy. The India consumer services segment, without the new vertical, had a revenue of ₹265 crore with a year-on-year growth of 26%  due to the festive demand in beauty and home repair segments. Excluding InstaHelp, the core business recorded a modified EBITDA profit of ₹44 crore, highlighting the profitability of the existing platform.

The company is working towards achieving breakeven of InstaHelp by focusing on increasing the average order value (AOV) and reducing the loss per order. The adjusted EBITDA loss per order has already improved, as reported by the management, having decreased to ₹381 in Q3 as compared to ₹760 in Q2.

The sustainability is to grow the AOV by about 1.8x to 2x in the long term. Urban Company expects the profitability of its core segments to be high enough that the losses of the InstaHelp will be covered by the third quarter of fiscal year 2028, which will result in consolidated breakeven.

Conclusion

The Q3 performance of Urban Company represents a calculated trade-off between short-term profitability and long-term market positioning. The company is betting that the instant service model would become a significant moat on its platform by absorbing a ₹61 crore burn in its InstaHelp vertical.

The company is capitalized to maintain these investments with a solid cash position of more than ₹2,000 crore after its IPO. Although the aggressive expenditure has been driving the combined bottom line into the red at present, the trend in expansion of income and the rising economics per order indicates a clear, although difficult, way to achieve profitability over the forthcoming years.