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ET Money

@ETMONEY

Sep 9 • 12 tweets • 3 min read • Read on X

Urban Company is coming up with a ₹1,900 crore IPO.

It will be the first-of-its-kind listed business in India.

Is it worth investing in?

Let’s find out. A🧵

We will cover 5 key aspects in this analysis:

- Business Model of Urban Company
- Financials
- Valuations
- Key IPO details
- Strengths and challenges

Let’s start.

𝟏. 𝐁𝐔𝐒𝐈𝐍𝐄𝐒𝐒 𝐌𝐎𝐃𝐄𝐋

Urban Company makes money in 3 ways:

𝐀. 𝐈𝐧𝐝𝐢𝐚𝐧 𝐂𝐨𝐧𝐬𝐮𝐦𝐞𝐫 𝐒𝐞𝐫𝐯𝐢𝐜𝐞𝐬 (𝟕𝟒% 𝐫𝐞𝐯𝐞𝐧𝐮𝐞): Cleaning, pest control, electrician, plumbing, carpentry, painting, skincare, hair grooming, massage therapy, and more

𝐁. 𝐍𝐚𝐭𝐢𝐯𝐞 (𝟏𝟔% 𝐫𝐞𝐯𝐞𝐧𝐮𝐞): Sells water purifiers and electronic doorlocks

𝐂. 𝐈𝐧𝐭𝐞𝐫𝐧𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐁𝐮𝐬𝐢𝐧𝐞𝐬𝐬 (𝟏𝟎% 𝐫𝐞𝐯𝐞𝐧𝐮𝐞): Services in the UAE, Singapore, and the Kingdom of Saudi Arabia

𝟐. 𝐅𝐈𝐍𝐀𝐍𝐂𝐈𝐀𝐋𝐒

The financials show a strong turnaround in the business.

In the last two years, revenue and profits have shown impressive growth.

Even margins saw an improvement from FY23.

Also, the company is debt-free and has positive cash flows in FY25.

To study company financials, you can visit the 𝐄𝐓 𝐌𝐨𝐧𝐞𝐲 website or log in to the app.

Under the 𝐬𝐭𝐨𝐜𝐤𝐬 𝐬𝐞𝐜𝐭𝐢𝐨𝐧, you get a whole host of data 𝐢𝐧 𝐨𝐧𝐞 𝐩𝐥𝐚𝐜𝐞.

You can look at financials, comparison with peers, technicals, key metrics, and a lot more.

𝟑. 𝐇𝐎𝐖 𝐄𝐗𝐏𝐄𝐍𝐒𝐈𝐕𝐄 𝐈𝐒 𝐔𝐑𝐁𝐀𝐍 𝐂𝐎𝐌𝐏𝐀𝐍𝐘 𝐕𝐒 𝐏𝐄𝐄𝐑𝐒?

There are no direct listed competitors.

We have compared UC with major listed tech platforms using the Price-to-Sales Ratio.

Price to Sales = Market Cap ÷ Sales

The IPO appears to be overpriced.

𝟒. 𝐊𝐄𝐘 𝐈𝐏𝐎 𝐃𝐄𝐓𝐀𝐈𝐋𝐒

The Company is raising ₹1,900 Cr via IPO.

Of this, only ₹472 Cr is fresh capital for the company.

The remaining ₹1,428 Cr is an Offer for Sale (OFS), which means existing shareholders are selling their shares.

Here are other key details. 👇

𝟓. 𝐒𝐓𝐑𝐄𝐍𝐆𝐓𝐇𝐒 𝐀𝐍𝐃 𝐂𝐎𝐍𝐂𝐄𝐑𝐍𝐒

𝐏𝐨𝐬𝐢𝐭𝐢𝐯𝐞𝐬

The company is growing fast and has ample headroom for growth.

It is debt-free and turned profitable in FY25.

𝐍𝐞𝐠𝐚𝐭𝐢𝐯𝐞𝐬

The competition from offline service providers and the unorganised space is immense, and the entry barriers in this segment are low.

The valuations appear to be expensive from the perspective of other tech-based platform stocks.

𝐖𝐢𝐥𝐥 𝐲𝐨𝐮 𝐢𝐧𝐯𝐞𝐬𝐭 𝐢𝐧 𝐭𝐡𝐢𝐬 𝐈𝐏𝐎?

- Yes

- No

https://x.com/ETMONEY/status/1965442938562867691

If you find this useful, show some love. ❤️

Please like, share, and retweet the first tweet.

https://x.com/ETMONEY/status/1965442938562867691

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More from @ETMONEY

ET Money

@ETMONEY

Sep 7

What if you only invested in companies that give the best returns?

Can you beat the markets with such a ‘Winners’ Portfolio’?

We did the maths.

₹35 lakh invested over a decade would’ve become ₹1.31 crore.

Let’s break it down. A🧵

Let’s briefly discuss what we did.

A. We looked at 35 stocks with the highest returns starting FY15

B. Invested an equal amount in them

C. We sold them after a year and invested in a new set of stocks that had the best return

D. Repeated this exercise for a decade

We selected the 35 biggest winners of FY15 (Apr 1, 2014 - Mar 31, 2015).

Invested ₹10,000 in each of them on Apr 1, 2015.

Total investment = ₹3.5 lakh

A year later (on Mar 31, 2016), the returns were 11.1%.

How did the BSE 500 fare? It was down 7.8%.

Read 15 tweets

ET Money

@ETMONEY

Sep 6

Can you select stocks based ONLY on the RETURNS?

To find the answer, we ran numbers.

We compiled a portfolio of stocks that yielded the highest returns each year, and invested in them.

Result?

These stocks easily outperformed the markets. A🧵

Read 15 tweets

ET Money

@ETMONEY

Sep 4

The government has announced a major GST cut.

Earlier this year, two other major reforms were rolled out.

A. Taxes were lowered

B. Three rate cuts, reducing interest rates by 100 bps.

What do these THREE big steps signal for the economy? A 🧵

For years, private investment has been losing steam.

In FY24, the private sector’s share in total investment fell to 32.4%.

That was an 11-year low, according to the latest data from the Ministry of Statistics.

In short, companies have remained cautious about expanding.

The government's capital expenditure bridged the gap.

In FY24, combined investments by the Centre and the states accounted for more than 25% of total investment.

India’s growth engine has relied heavily on public spending.

Read 12 tweets

ET Money

@ETMONEY

Sep 3

A rental income of over 11% without owning a property.

That’s the return Small and Medium REITs (or SM REITs) aim to deliver.

And it’s possible, based on the two recent public issues of SM REITs.

But does this new asset class also carry higher risk?

Let’s find out.🧵

Before discussing risk and returns, let’s talk about two important things.

A. What are SM REITs
B. How are they different from traditional REITs

Think of traditional REITs as a listed large-cap stock that pays dividends.

What do you get?

- A mature diversified business spanning across geographies

- Scale & diversity provide business stability

- Cash flows can be analysed & forecasted

- Return expectation = moderate

Read 16 tweets

ET Money

@ETMONEY

Aug 30

We analysed 180 funds across SIX categories.

Why? To see how proactively schemes are managed.

Here are the top 5 that prefer a ‘buy and HOLD’ approach.

And also the top 5 that ‘buy and SELL’ aggressively. 🧵

For this analysis, we looked at the turnover ratio of each fund.

It simply shows how much of a fund’s portfolio changed in a year.

A 100% turnover means the entire portfolio was replaced once during the year.

High turnover → Buy and sell

Low turnover → Buy and hold

FLEXI CAP FUNDS

Flexi caps show the widest extremes.

Shriram Flexi Cap averages 665%, turning its portfolio over more than six times a year.

At the other end, UTI Flexi Cap sits at 8.3%.

Some managers use flexi caps for tactical plays, others run them like steady diversified funds.

Read 13 tweets

ET Money

@ETMONEY

Aug 28

Q1 earnings season is over.

But which companies truly delivered?

We analysed Q1 results to find the sectors with momentum and the stocks that stood out as real winners.

Here’s what we found.🧵👇

If we look at the overall picture, growth slowed.

Sales of India’s top 500 companies (excluding BFSI) rose by just 5% compared to last year. That is weaker than the previous quarter.

Profits, however, increased by 15%. Margins also improved for the 3rd quarter in a row.

This means companies sold less, however they made more money on what they sold.

But not all companies are experiencing this in the same way.

If we divide the market by size — large, mid, and small companies, the contrasts are very clear.

Read 17 tweets

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