Urban Company shares zoom nearly 18% after Q1 results; should you chase the rally?

Shares of Urban Company Ltd surged in Monday's trade after the home services platform reported its June quarter (Q1 FY27) earnings. The stock jumped 17.67 per cent to hit a day high of Rs 152.20. Despite the sharp rally, it is still down 24.28 per cent from its 52-week high of Rs 201, touched on September 22 last year, shortly after its stock market debut on September 17.

Some market experts, however, advised investors against chasing the sharp post-results rally, suggesting a cautious approach in the near term.

Ravi Singh, Chief Research Officer at Master Capital Services, described the company's quarterly performance as mixed.

"Urban Company delivered a mixed Q1 FY27 performance, reporting a 44 per cent year-on-year (YoY) jump in revenue to Rs 528 crore despite posting a net loss of Rs 92 crore, as the company continued investing aggressively in its growth initiatives," Singh said.

He added that the combination of strong revenue growth, improving core operating performance and a narrowing sequential loss triggered the sharp buying interest in the stock.

"However, from a technical perspective, the stock has already witnessed a steep post-results surge, making the risk-reward less favourable at current levels. Investors should avoid chasing the rally and instead wait for a healthy price correction or consolidation before considering fresh buying opportunities at more attractive levels," he said.

Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, also maintained a cautious stance despite acknowledging the operational improvement.

"The company has reduced its losses sequentially. There is topline growth, but the counter is suitable only for investors with a high-risk appetite. Those with a medium- to short-term view can consider booking some profits," Bathini said.

AR Ramachandran, Sebi-registered research analyst at Tips2trades, said the stock remains in an uptrend but is showing signs of being overbought.

"Urban Company is bullish but also slightly overbought on daily charts, with the next resistance at Rs 157. Investors should keep booking profits as a daily close below the support of Rs 140 could trigger a fall towards Rs 126 in the near term," he said.

Separately, the company said its quick-service housekeeping vertical, InstaHelp, crossed 100,000 delivered orders in a single day on August 2.

Abhiraj Singh Bhal, CEO and Co-founder of Urban Company, said, "Crossing 100,000 delivered orders in a single day, barely five months after we crossed 50,000, reflects both the growing consumer demand for InstaHelp and the strength of the operating model we've built."