Urban Company Returns to Loss in Q2 FY26 Amidst Investment in New Services

Startups/VC

Updated on 01 Nov 2025, 10:21 am

Reviewed By

Aditi Singh | Whalesbook News Team

Short Description :

Consumer services company Urban Company reported a significant increase in net loss to INR 59.3 crore in the second quarter of FY26, a sharp rise from INR 1.8 crore in the same period last year. This comes after the company posted a profit in the previous quarter. Despite a 37% year-on-year revenue growth to INR 380 crore, total expenses jumped 51%, leading to the loss, primarily driven by investments in its new 'Insta Help' service.

Urban Company Returns to Loss in Q2 FY26 Amidst Investment in New Services

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Detailed Coverage :

Urban Company, a prominent player in consumer services, has reported a substantial deterioration in its financial performance for the second quarter of fiscal year 2026 (Q2 FY26). The company has swung back into a net loss of INR 59.3 crore, a significant jump from INR 1.8 crore in Q2 FY25. This marks a reversal from its reported net profit of INR 6.9 crore in Q1 FY26.

Despite the increased loss, Urban Company demonstrated robust revenue growth. Operating revenue grew by 37% year-on-year (YoY) and 4% quarter-on-quarter (QoQ) to INR 380 crore. Including other income, total income rose 36% YoY to INR 412.7 crore. However, total expenses saw a steeper increase, climbing 51% YoY to INR 461.7 crore, which outpaced revenue growth.

The company also reported an Adjusted EBITDA loss of INR 35 crore for the quarter, compared to a smaller loss of INR 5 crore in the prior year's quarter. Urban Company attributed this shift, in part, to upfront investments in its new service, 'Insta Help,' which aims to provide house help within 15 minutes. This new category alone contributed an Adjusted EBITDA loss of INR 44 crore.

Urban Company stated in its shareholder letter that while business segments showed strong growth, the move back to Adjusted EBITDA losses was strategic, driven by investments in the 'Insta Help' category. The company anticipates that consolidated Adjusted EBITDA losses will persist in the near term as these investments continue.

Impact This news could dampen investor sentiment, especially for those anticipating an Initial Public Offering (IPO) from Urban Company, as it signals a return to losses despite revenue expansion. The significant investment in a new, unproven service suggests potential risks alongside growth opportunities.

Rating: 6/10

Difficult Terms:

* **Net Loss**: When a company's total expenses exceed its total revenues over a specific period. * **FY26 (Fiscal Year 2026)**: The financial year runs from April 1, 2025, to March 31, 2026. * **Q2 (Second Quarter)**: The period from July to September within the fiscal year. * **YoY (Year-on-Year)**: A comparison of a metric from one period to the same period in the previous year. * **QoQ (Quarter-on-Quarter)**: A comparison of a metric from one quarter to the preceding quarter. * **Operating Revenue**: Income generated from the company's primary business activities. * **Total Income**: Includes operating revenue plus any other income, such as interest or gains from asset sales. * **Total Expenses**: All costs incurred by the company to generate revenue and operate its business. * **Adjusted EBITDA**: Earnings Before Interest, Taxes, Depreciation, and Amortization, adjusted for certain non-recurring or non-cash items to provide a clearer view of operating performance. An Adjusted EBITDA loss means the adjusted earnings are negative.