Urban Company shares crash over 8% after Q2 results - Should investors buy, sell, or hold the stock? Experts explain

Orders delivered reached 1.51 crore, up 103% YoY, and annual transacting users reached nearly 1 crore, up 35% YoY. Adjusted EBITDA for the quarter was - ₹144 crore due to a deliberate ₹174 crore investment in InstaHelp. Excluding InstaHelp, Adjusted EBITDA was ₹30 crore, up 213% YoY, said the company. The Company closed the quarter with ₹1,901 crore in cash and treasury investments. Meanwhile, its board has approved a fresh capital raise of up to ₹2,500 crore, subject to shareholder approval.

What should investors do? Brokerage firm Emkay Global Financial Services has maintained a "buy" recommendation on the stock and raised the 12-month target price to ₹200. Emkay said the company's low core penetration, tier 2 expansion, improving International profitability, and approaching KSA breakeven support the outlook. Native offers further growth opportunities, while InstaHelp drives higher engagement.

However, pricing recovery and unit economics remain key monitorables, the brokerage firm added. Emkay underscored that the management retained consolidated adjusted EBITDA breakeven guidance for Q3FY28 and the ₹1,000 crore FY31 target. The fund raise strengthens investment capacity, although deployment and dilution remain valuation considerations. "We maintain a buy while raising the target price by more than 5% to ₹200, valuing ICS at ₹110, implying 38.6 times FY29E EV/EBITDA, and InstaHelp, International, Native, and KSA businesses contributing ₹28, ₹27, ₹17, and ₹5, respectively, to our target price, with net cash of ₹12," said Emkay.