Morgan Stanley has initiated coverage on Urban Company with an underweight rating and a target price of ₹117 per share, noting that while the company operates in a large and promising online home services market, current valuations already factor in much of its growth potential.
The brokerage said Urban Company’s India consumer services business (excluding Insta) is expected to grow its net transaction value (NTV) at a healthy 18–22% CAGR between FY25 and FY28. However, high customer churn and supply-side constraints are likely to keep growth calibrated.
Morgan Stanley expects adjusted EBITDA margins in the core India consumer services business to reach 30% in the medium term, driven by operational efficiency and better unit economics. Still, it maintained an underweight stance as it believes strong growth is already reflected in current valuations. The brokerage added that Urban Company’s valuation multiples are likely to remain broadly in line with established internet peers in India.
Disclaimer: The views and recommendations above are those of Morgan Stanley. Business Upturn does not endorse them. Please consult a financial advisor before making investment decisions.
