Emkay write up: *Nifty to Bottom soon?* The Nifty/SPX relative chart is throwing up an interesting signal. The ratio has slipped back towards 3.0–3.1 — a major long-term support zone that has held through multiple cycles. RSI is also near 38, suggesting the relative trade is becoming stretched. A sustained defence of this zone could mark the early stages of a bottoming process in Nifty’s relative performance versus the S&P 500. The key confirmation would be a move back above the 3.3 region. *Urban Company : *The moat gets stronger with density* | BUY, TP ₹190 Pranav and team *initiate coverage* on Urban Company with a BUY and ₹190 DCF-SOTP TP, arguing that UC has evolved from a marketplace into a hyperlocal density network — with ~12,000 micro-market × category cells creating individual supply-demand loops that become harder to replicate as scale builds. *The core economics are better than they look:* Flywheel is increasingly self-funded: >83% of new professionals join through referrals/word-of-mouth. Onboarding cost has fallen from 34.2% to 22.8% of ICS revenue and ad spend from 29.7% to 15.1% between FY23-25, even as revenue grew ~80%. *Trust is the moat*: In a ~₹5trn home-services market that remains ~90% unorganised and 99% offline, UC’s ~27.5% take rate effectively monetises predictability, quality and trust. *Retention is strengthening*: Repeat professionals now contribute 83.6% of India NTV vs 73.2% earlier, while retained consumers contribute 83.1% vs 72.1% — evidence that the network is becoming stickier rather than leaking participants. *Core growth is re-accelerating*: ICS NTV grew 29.4% YoY in 1QFY27 vs 10.3% in 1QFY26, with adjusted EBITDA margin at 6.9% of NTV. The big debate remains InstaHelp. The Street is likely to focus on the ~₹9.4bn FY28E adjusted EBITDA loss. Emkay sees this differently — InstaHelp is a frequency engine, not a business-model pivot. While the core is used ~3-4x a year, InstaHelp can drive ~3x monthly engagement, creating habit, richer consumer data and cross-sell opportunities. Crucially, the profitable core can fund the land grab, unlike standalone competitors that need external capital. *The numbers capture the operating leverage:* ICS NTV is expected to compound at 19.8% FY26-29E, while ICS adjusted EBITDA compounds at 47.4%. Consolidated adjusted EBITDA turns positive around FY30E as InstaHelp, Native and international investments mature. SOTP ₹190: ICS ₹107 + InstaHelp ₹28 + International/Native/KSA ₹42 + cash ₹13. The market may be valuing UC on near-term burn; Pranav is valuing the density network being built underneath it. At CMP, he believes that investors are essentially paying for a scaling, increasingly self-funding core and getting the newer businesses as relatively cheap optionality.
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