Indian home services firm reports $27.8m profit in FY25

Indian home services startup Urban Company reported its first full-year profit for FY25, with a net profit of 239.8 crore rupee (US$27.8 million).

This marks a turnaround from a 92.7 crore rupee (US$10.7 million) loss in FY24.

Revenue from operations rose 38.2% year-on-year to 1,144.5 crore rupee (US$132.5 million), while other income increased to 116.21 crore rupee (US$13.5 million).

Total expenses climbed 19.86% to 1,223.47 crore rupee (US$141.7 million).

The platform served 6.8 million annual transacting users and 48,000 monthly active service partners.

The company became a public limited entity in February 2025 and filed for a 1,900 crore rupee (US$220 million) IPO in April.

🔗 Source: YourStory

🧠 Food for thought

1️⃣ Deferred tax credits: The hidden profit booster in startup journeys

Urban Company’s reported profit of Rs 240 crore is largely attributable to a one-time deferred tax gain of Rs 211 crore, with actual profit before tax at just Rs 28.6 crore1.

This accounting mechanism allows companies to recognize previous accumulated losses as future tax benefits, significantly enhancing their financial position before going public.

Without this tax credit, Urban Company’s profitability picture would be substantially different, considering its history of consecutive losses: Rs 92.7 crore in FY24, Rs 228.6 crore in FY23, and Rs 308.5 crore in FY221.

Similar patterns have emerged with other tech companies approaching IPOs, where accounting adjustments create profitability milestones that satisfy investor expectations while masking the underlying unit economics.

The company’s DRHP itself acknowledges this reality, cautioning that “future profitability is not guaranteed due to competitive pressures”1, signaling that sustainable operating profits remain a work in progress.

2️⃣ Service marketplace evolution: From growth-at-all-costs to profitable scaling

Urban Company’s trajectory reflects a broader shift in service marketplaces, with the company scaling back its IPO size from an initial target of ₹3,000 crore to a more modest range amid changing investor sentiment2.