Urban Company Ltd (NSE: URBANCO) Q3 2026 Earnings Call dated Jan. 23, 2026
Corporate Participants:
Abhiraj Singh Bhal — Chairperson, Managing Director & Chief Executive Officer
Abhay Mathur — Chief Financial Officer
Analysts:
Unidentified Participant
Aadil Khan — Analyst
Kunal Mehta — Analyst
Gaurav Rateria — Analyst
Manish Adukia — Analyst
Garima Mishra — Analyst
Sachin Dixit — Analyst
Srinath V — Analyst
Devanshu Sampat — Analyst
Darshil Jhaveri — Analyst
Presentation:
Operator
Hello everyone. Welcome to Urban Company Limited’s Q3 FY26 Earnings Conference Call. From Urban Company’s management team, we have with us today Mr. Abhiraj Singh Bhal, CEO and Co-Founder, joined by Mr. Abhay Mathur, Chief Financial Officer. An important announcement before we begin. Anything said on this call which reflects future outlook or which could be construed as a forward-looking statement may involve risks and uncertainties.
Such statements or comments are not guarantees of future performance and actual results may differ from those statements. Please note that this earnings call is scheduled for a duration of 60 minutes only. Post the management opening remarks, we will open up for an interactive Q&A session. Interested participants can type your questions in the Q&A tab, and we will pick them. When your name is announced, please unmute and introduce yourself first before asking the question. Over to Mr. Abhiraj Bhal for the opening remarks.
Abhiraj Singh Bhal — Chairperson, Managing Director & Chief Executive Officer
Thank you very much, Bhavya. Good evening, ladies and gentlemen. Welcome to the Q3 FY26 earnings call of Urban Company. I thank you all for joining us today. Q3 FY26 was a strong quarter for Urban Company marked by healthy broad-based growth and continued improvement in profitability across our core businesses in India and international markets, UAE and Singapore. We continue to invest in our new areas of growth, InstaHelp and Native.
On a consolidated basis, net transaction value grew 36% year-on-year, excluding KSA impact to INR1,081 crores and revenue from operations increased 42% year-on-year to 800 and — INR383 crores again excluding the impact of KSA. Growth was broad-based across India Consumer Services, Native and our international markets. If I talk about India Consumer Services ex of InstaHelp, NTV for this business segment grew 21% year-on-year, and adjusted EBITDA margins improved to 5.6% of NTV, up from 4.4% same time last year and sequentially up from 2.4% in Q2. This performance was driven by strong new user addition, steady revenue retention, healthy festive season-led demand in the core categories and continued operating leverage reflecting the underlying strength of our core model. Based on the first nine months’ performance, we believe that the full financial year FY26 margins for India Consumer Services ex of InstaHelp will be slightly ahead of FY25.
In our native business, we continue to see strong year-on-year demand, with NTV up 93% year-on-year alongside meaningful margin improvement compared to the same time last year. International markets in UAE and Singapore also continue to perform well, delivering a 79% year-on-year growth on a like-to-like basis in NTV and an adjusted EBITDA margin of 2% of NTV.
During this quarter we continue to invest in InstaHelp, our high-frequency household services vertical. InstaHelp scaled rapidly to 1.61 million orders in the quarter and INR28 crores in net transaction value. Adjusted EBITDA loss for InstaHelp stood at INR61 crores this quarter. While the absolute losses did increase quarter on quarter, we saw a reduction in the adjusted EBITDA loss per order from about INR760 in Q2 to about INR381 in Q3. With improving average order value, service partner utilization, micromarket densification, we expect the loss per order to continue to reduce over time.
As a result, the consolidated adjusted EBITDA for the quarter was a loss of INR17 crores. But if I exclude the loss in InstaHelp, the business delivered an adjusted EBITDA profit of INR44 crores, underscoring the underlying strength and profitability in our core operations. Overall, we remain focused on scaling our core businesses in India, UAE and Singapore profitably while continuing to invest thoughtfully in new growth opportunities like Native and InstaHelp. With that, we open the floor to Q&A.
Operator
Thanks, Abhiraj. We will wait for a minute while the question queue assembles. Please share your questions in the Q&A tab below.
Questions and Answers:
Operator
Hi Mohit, can you please unmute yourself and ask the question?
Unidentified Participant
Hello, am I audible?
Operator
Yes.
Unidentified Participant
Hi, thank you for the opportunity. Some set of questions from my end. One is that you have shared that your consol adjusted EBITDA to break even by Q3 FY28. Now is some sort of conservatism baked into this, given that India Consumer Services business shows strong potential for margin expansion, so is it fair to assume that this can be achieved earlier versus the timeline that you have given?
Abhiraj Singh Bhal
Thanks for your question, Mohit. Mohit, we see very, very clear line of sight of India Consumer Services ex of InstaHelp to continue to increase its year-on-year margins. As we had underscored in the previous quarterly call as well, margins can move a little bit up and down quarter on quarter because of inherent seasonality, and therefore they are best assessed year on year, and that explanation we’ve given in some detail in this letter. But certainly FY26 we now expect it to be slightly ahead of FY25 and FY27 onwards, we think that margins will continue to increase on a percentage basis and also on an absolute basis. Same will largely hold true for International.
These two will be the big drivers of profitability in our business and we should expect them to continue to move profitably ahead. Native is still an early-stage business, but it has shown margin improvement and absolute losses have been coming down. Again, there’ll be some ups and downs with seasonality, but it’s moving in the right direction. The big question obviously is around InstaHelp.
InstaHelp is early and we are not yet fully clear on the quantum of investments on a quarterly basis that will go into InstaHelp. So our view is that latest by Q3 of the financial year FY28, the overall profits from the rest of the business should be sufficiently large enough to offset the losses in InstaHelp. This could happen sooner, but certainly from Q3 FY28 onwards it should happen and it should happen sustainably going forward.
And it should not be that in quarters ahead there is again movement up and down. So that’s the call it stake that we put in the ground — that by that quarter the overall profits from every other business that we run will all be large enough to offset the losses in InstaHelp, not just for that quarter, but going ahead as well.
Unidentified Participant
So on a connected basis, the Instamart, sorry, InstaHelp, loss per order has been coming down over the last two, three quarters. Now as you look forward to accelerated growth in this segment, fair to assume that this can further inch up now and not necessarily a trend moving downwards. Fair to assume that?
Abhiraj Singh Bhal
Mohit, the loss per order, in my view, has to keep coming down. The magnitude of decline might not be as sharp as it has been earlier, but it has to keep coming down for this business to sustainably eventually break even. So that’s something that we are committed to. And again, there might be one or two quarters here and there where the trajectory might be lumpy.
But if you look at a secular view, we are committed to seeing the loss per order coming down. Obviously the business is growing fast and the orders are growing and as a result the absolute losses that this business will incur, it is still early for us to give a guidance on that. But loss per order, we are committed to making sure that we see an improvement in that number coming down.
Unidentified Participant
Sure, thank you for that. And last question. You have mentioned in your letter that the categories accounting for 30% of India Consumer Services NTV are already operating at 8% adjusted EBITDA. Can you elaborate a little bit more on this? Which are these categories and where are the others in the journey towards their higher margin expansion in the future, if you can elaborate on that?
Abhiraj Singh Bhal
Absolutely, Mohit. So Mohit, the aggregate business India Consumer Services ex of InstaHelp had a adjusted EBITDA of 5.6%. As you might recall in the last letter, and even in this letter, we’ve reiterated our long-term guidance that this business can reach 9% to 10% of NTV.
We wanted to give comfort to the investor community on how we have visibility of that because about a third of our business, roughly 30%, is already operating at 8% in this quarter, in fact, in the first nine months. And that gives us the confidence that the overall business as it matures, as the rest of the categories mature, we have line of sight of that long-term guidance that we have given of 9% to 10%.
We will not disclose the specific categories that comprise of that 30%. But it’s not just driven by one or two categories. There’s a good host of mature categories that are operating at that mark. And then there are certain early-stage categories as well, even within India Consumer Services. So the basket put together is at 5.6%. We are fairly confident that year on year it will continue to see a margin expansion and eventually get to that long-term guidance of 9% to 10%.
Unidentified Participant
Sure. Thank you for those answers. I’ll get back in the queue.
Abhiraj Singh Bhal
Thank you, Mohit.
Operator
Dipak, can you please go next? Dipak Saha [Phonetic].
Unidentified Participant
Yeah. Hello. Hi, I’m audible.
Abhiraj Singh Bhal
Yes, Dipak, we can hear you.
Unidentified Participant
Okay, thanks. Thanks for the opportunity. Just on Native side, if you can share some color. If I see last year Q3 over Q2, we had sequential improvement on the NTV side, there’s a meaningful sequential growth, and my understanding is Q3 because of festive season and all, we usually have a strong quarter.
Now this year Q3 is — on a sequential side it’s a bit softer, but you have alluded that in the shareholders’ letter because of early festive demand or early starting of festive demand, you have seen some order pull forward. So is this the only reason or there’s anything that you would like to call out?
Abhiraj Singh Bhal
I think, Dipak, that’s the main reason. There is seasonality in the Native business as well. Generally around monsoons, people tend to get a little more worried about the quality of water they’re drinking and therefore water purifiers see an upswing in that period. And then obviously festivities around Diwali and the various e-commerce sales associated with that is also a big factor.
This financial year, Diwali was much earlier in the OND quarter vis-a-vis the previous financial year. And as a result, the e-commerce sales actually landed in Q2. And even in Q2 we had mentioned that the big step jump, much of it is because of the forward pulling of demand. I think that’s the main factor. Obviously competitive intensity for water purifiers is also heating up and that’s a minority factor in our view. But the majority factor is owing to the festive sales being this year falling in Q2.
Unidentified Participant
Got it. And second one on the margin side, there’s meaningful improvement, especially adjusted EBITDA for Native. Anything you’d like to highlight? Is it like going ahead fixed cost would be more in the range of where we are and that would lead to say breakeven kind of a trajectory or you see your take rate or anything improving meaningfully?
Because what I see in a sequential, your take rate is largely flat. What is — where it is coming from there’s a meaningful improvement on the adjusted EBITDA side. So if you can share some color on the breakeven side and the drivers for that.
Abhiraj Singh Bhal
Yeah, I think Native, the focus right now, Dipak, is on scaling the business well and continuing to make year-on-year improvements in the margin profile; a lot of that improvement will basically come from scale and operating leverage. In this business, there are certain fixed costs that we incur and the benefits of scale help us cover those fixed costs. Those fixed costs are in terms of R&D, product development, people costs, marketing and brand building, et cetera, et cetera.
And with scale those costs get covered. So the operating leverage is in some sense, also similar to how our core consumer services business in India shapes up. Native obviously is early in its journey. It’s been only a little over two years since launch. So the focus is not to — while one of the focuses is to improve margins, I would say the immediate near-term focus is not breakeven; it is to continue to scale well and bring it to a certain scale.
And we are confident that with scale the business will automatically break even and over time actually generate very, very healthy margins. We recognize that this business enjoys structural advantages vis-a-vis other brands. One of those structural advantages is that a meaningful percentage of the sales comes from our own app and our own ecosystem of service professionals, which is obviously more or less free of cost for us.
Another structural advantage is that we cross-utilize our existing service professionals for water purifiers to also service native customers. And so we don’t have to — we don’t incur the cost of building and maintaining that service fleet. So those are structural advantages which in our view we are confident long term will lead to a structurally better P&L for Native.
Right now the focus is growth and we are confident that with growth over time the business will automatically see improving margins. First, it will break even and over time become reasonably profitable.
Unidentified Participant
In that context, Abhiraj, this — our tie-up, strategic tie-up with Amber, is this the reason that — all the factors that you alluded, if you can share some more light, the synergies that we’re trying to build with Amber. I understand this is specifically in line with — in relation to Native, right? So anything that you would like to share on that front?
Abhiraj Singh Bhal
Dipak, we have so far relied upon a single contract manufacturer for the making of water purifiers in India for the assembly of those water purifiers. And we felt that we had started to hit the scale and size, that some diversification of that backend supply chain was helpful to reduce the risk and improve the quality of products.
And therein we decided to also partner with Amber as a second manufacturing — contract manufacturing partner.
Unidentified Participant
Got it. That’s helpful. One last question before I fall into queue. On the InstaHelp side, we have seen a lot of fundraising and subsequently competitive intensity has also gone on the highest side as far as marketing measurements, visibility on the Street is concerned. This particular segment is really gaining traction. So now one thing is we have our own, say, idiosyncratic features to drive margins at scale.
But on the competitive side, are you seeing anything, say, which was not expected and now competitive intensity can be a bit of a headwind or some other thing that you’d like to highlight from your expectation point of view. Are the dynamics with competitive intensity a little bit higher than or meaningfully higher than what we had earlier expected?
Abhiraj Singh Bhal
Not really. I think our eyes are focused on the customer and the service professionals. Most of our energy goes there. We believe in the long run the company that solves for the customer and the service partner ecosystem well is the company that wins in the marketplace. Obviously there is competitive intensity and that’s expected and it’s nothing new for us.
We’ve seen various waves and cycles of increasing and declining competitive intensity over the last 10, 11 years since inception. InstaHelp is an attractive category and there will be competition and we track that competition. We learn from them. It helps us improve, it keeps us on our toes. But fundamentally our focus is the customer and the service professional.
And right now there is nothing out of the ordinary that we see in the market. This is pretty much on expected lines, this level of competitive intensity for a market as attractive as InstaHelp.
Unidentified Participant
That’s, that’s really helpful, Abhiraj. Thanks a lot. And I must say that your services on InstaHelp side are really commendable. I mean, even you know, with respect to what is available in offering by other players. I’ll fall back on the queue for my rest of the questions. Thank you.
Abhiraj Singh Bhal
Thank you, thank you. Dipak.
Operator
[Technical Issues] from Group Capital, please go next.
Unidentified Participant
Hey, thanks for the opportunity. Abhiraj, a quick question from my side on the competitive landscape. What are the different business model choices on the InstaHelp side that you are seeing, especially on supply-side engagement between your model versus the competition?
Abhiraj Singh Bhal
Can you just maybe elaborate a little bit better, Tushar [Phonetic]? What do you mean by supply-side choices?
Unidentified Participant
Yeah, I mean that what is the supply-side engagement model, let’s say, for InstaHelp for you guys? And how is that different from A, the broader consumer services platform that you guys run and how is it different from what the other competition has, in that, is it all on minimum guarantees, is it on gig, is it on certain target linked incentives, like how does that, how does that supply-side engagement model work?
Abhiraj Singh Bhal
Understood. Let me talk about what we are doing at InstaHelp. So our focus is on building a very, very high-quality, reliable, trained supply pool, which is available at a very small micro-market level. We believe this business is a micromarket-heavy and dense business. In fact, the micromarket density and micromarket sizes are even smaller than our core business and therefore it’s a densification-first and micromarket-first business for us.
We emphasize extensively on the playbooks that we have learned over the years, which is around extensive background verification, training, making sure the right type of service professionals join the platform who have the urban company ethos, making sure they’re well aligned to serving customers and ensuring that they have attractive earnings vis-a-vis offline opportunities or other online competitors.
Our goal is to make sure that the supply pool is deeply engaged and has a long term viable pathway to build a career at Urban Company. So those learnings that we’ve had over the last 10 years, we are applying here as well. We believe that leads to a sustainable long term category creation.
I cannot comment on the supply models of other competitors but this is our — this is what we are focused on. Beyond just earnings, we also want to create other opportunities for them to have a good life and a good livelihood. So we also offer our standard social security benefits around life and accidental insurance free of cost, health insurance free of cost.
A lot of them are women partners. So our women-partner-focused initiatives, like Project Nidar et cetera, which focus on partners who struggle with domestic violence and so on and so forth, apply to them. Our scholarship programs under Commander Nishant Singh scholarship program applies. So all our endeavors, which in many ways, let me put it this way, our supply-first thinking and our supply-forward thinking is — a lot of those learnings we’ve taken from our India Consumer Services business and applied it here. Of course, what is different is that this is a much more micro-market-intensive business. The level of densification and the level of reliability that is needed is much higher. Availability times are also much lower. So those are things that we are adapting to.
Unidentified Participant
And are you seeing any degree of cannibalization happen through InstaHelp on the broader consumer services platform or are these completely two exclusive set of opportunities to pursue?
Abhiraj Singh Bhal
Nothing meaningful yet. At the end of the day, InstaHelp caters to a more high frequency daily/weekly cleaning and housekeeping service and our core consumer services business, to the extent that there is some overlap, it is in deep cleaning. But those deep cleaning services are used more occasionally around festivities, around move-in/move-out occasions, around having guests over or generally when you realize that a period of time has passed through and the work that your regular house help is doing is not enough and you want a deeper clean.
So on the fringes there’ll be a little bit of overlap, but nothing material yet. That being said, it’s still early and we are watching. We are also not very particularly worried about cannibalization because even if it were to happen, it’s in some sense is the right — it’s good for the customer. It’s better that we cannibalize our own business versus somebody do it for us.
Unidentified Participant
Absolutely, yeah. Exactly. Thanks, Abhiraj. I’ll fall back in the queue now. Thank you so much.
Operator
Aadil Khan from ICICI Prudential Life. Please go ahead.
Aadil Khan
Hey. Hi Abhiraj. Congratulations on a great set of numbers.
Abhiraj Singh Bhal
Thank you, Aadil.
Aadil Khan
Yeah, so my question is that if you could just share some guidance on InstaHelp NTV growth. See, we are at a very low base right now and QoQ growth was phenomenal at almost — NTV was almost 3x. So how do we see this number going ahead in the next couple of quarters and probably for FY27 as a whole? And also when do we expect — what kind of trajectory do we expect in InstaHelp losses in the next year?
Abhiraj Singh Bhal
Great questions, Aadil. I think at this point in time we are not in a position to give a firm guidance on InstaHelp growth and loss trajectory. But what I can tell you is that we are definitely very encouraged by the traction that we are seeing in terms of customer adoption and customer retention.
I think the micromarkets where we are present in, we are penetrating very fast and the level of customer usage and retention that we are seeing is very, very encouraging. We also recognize that this is not at full price. And the category is still some distance away from what we believe will be steady state AOV, which as we mentioned in our letter, might be 1.8 to 2 times higher. So we have to wait and watch how customer behavior changes as and when the pricing slowly moves up. But we’ve seen enough evidence in our older micromarkets that, even with maturing cohorts of customers, the customer activity holds up and that’s what gives us confidence.
Beyond that, right now, the focus is on making sure that we scale the category very well, we deliver high-quality experiences to customers and service professionals alike, and we cement very, very clear, unequivocal market leadership for this category. That is our North Star and that’s what we are pursuing.
And in that pursuit, it’s hard to precisely pen down what will be the quarter-on-quarter growth rates or what will be the level of loss that the business will incur. I do want to assure you and the rest of the investor community that we are building this business with the right level of customer centricity and aggression. And we are also very, very mindful and thoughtful of the loss trajectory. We want to make sure that we are leaving no stone unturned in moving this business in the right direction. That is in line with our ethos. And therefore the loss per order is something that in this quarter we wanted to highlight. We are committed to seeing it come down with time.
Aadil Khan
Thank you so much. That was very helpful. Just lastly, within the InstaHelp category, there might be some micromarkets, which might have kind of being on the matured stage. So how is loss per order in those micromarkets? If you could give us a sense.
Abhiraj Singh Bhal
Loss per order in the mature micromarkets is lower than the average for the platform. And that’s what gives us the confidence that this category is moving in the right direction.
Aadil Khan
Understood. Thank you so much and wish you all the best.
Abhiraj Singh Bhal
Thank you, Aadil.
Operator
May I request Mr. Kunal Mehta from Sunidhi Securities to go next?
Kunal Mehta
Yeah. Hi. A very, very good evening. My question is, what is the strategy behind InstaHelp? I mean, because I think for the total serviceable, addressable market that you’ve mentioned in the press, 42% of is — of that is the market that InstaHelp, cleaning and cooking targets. So is it a way, probably, to kind of cross-sell other things as well, to bring customers to the app to book, let’s say, people who can help them with their daily chores and then probably also use other services? Is that the strategy?
And also, how is the stickiness of the customer with respect to InstaHelp? I mean, are we seeing the customer as well and also the — the helpers? So are they also sticky? Are there leakages? If you can brief on that?
Abhiraj Singh Bhal
Right, thank you for the question, Kunal.
Kunal Mehta
Yeah.
Abhiraj Singh Bhal
Kunal, InstaHelp as a category, you rightly said, is a substantial part of the overall home services TAM total addressable market. And the category, which is largely daily housekeeping but also cooks and other sundry services, represents high frequency. It could be daily or multiple times a week or at the minimum, weekly/biweekly.
This is in some contrast to our core services business in India, which, where the frequencies could be more monthly or quarterly in nature. So one of the underlying advantages that InstaHelp has is that it has much higher frequency and therefore your connect with the customer, your entry into the customer’s home and the relevance for the customer’s household becomes fairly sticky and fairly relevant service.
We are also seeing a fairly high overlap in the target consumer segment for India Core Services and InstaHelp. So to that extent, this is actually helping us go deeper and penetrate deeper and cement our relationship with our existing customer base and also acquire newer customers who for whatever reason so far we may not have been able to acquire. We do believe over time, just given the frequency and the relationship this will create, InstaHelp customers will also cross over to other categories and it will improve the overall lifetime value of the customer.
It’s too early to call that trend out, but we — that is part of the strategic intent of moving aggressively behind InstaHelp. In terms of the customer stickiness and the service professional stickiness. While we are not giving specific numbers out at this stage, Kunal, what I can share is that we are very encouraged by both the trends, and that’s one of the reasons why we are doubling down on the category.
Kunal Mehta
Also, I just wanted to know how many cities are we active in the InstaHelp — with the InstaHelp segment?
Abhiraj Singh Bhal
We keep experimenting. There is no city where we have complete coverage. We keep experimenting and trying out in different micromarkets of different cities. But for all practical purposes, it’s currently live in the major metropolitan cities, which is Delhi NCR, Mumbai, Bangalore, Hyderabad and parts of Pune.
There might be a couple of cities here and there where we are doing small pilot, but these are the major four or five cities. Even in these cities, we don’t have complete coverage. We are launching micromarket by micromarket and densifying those micromarkets. So our first port of call will actually be to fully cover and densify these top five, six cities.
Kunal Mehta
Okay. And currently I think I see there are heavy discounts being given for InstaHelp, 60% odd on the app and a lot of offers, bundled offers. So is it just to maybe capture the market, then get as many customers to try this as possible?
Abhiraj Singh Bhal
Yes, absolutely. So basically there is discount laddering that we have created and as the customer matures, the level of discounting comes down and eventually the customer migrates to the full price and that laddering plays out. And we’ve seen it play out in our mature micromarkets.
The current market dynamic is that it’s also competitive, so it’s also important for us to acquire consumers at a rapid pace, and hence the level of discounting is much more elevated than what we would have normally been comfortable with. But that’s the primary reason to drive the discounting, which is to acquire users and then create that initial stickiness in behavior.
Kunal Mehta
Okay. Okay. Thank you so much. I’ll fall back in the queue for more questions.
Operator
May I request Mr. Gaurav Rateria from Morgan Stanley to go next?
Gaurav Rateria
Hi. Congrats on steady execution and thank you for the detailed shareholder letter. I have a couple of questions. The first one is on the core India Services ex Insta, the contribution margin improved on a sequential basis. What would be the key drivers that helped that? And for you to hit your steady-state margin that you talked about, is it going to come largely from the operating leverage or is there a scope of improvement in contribution margin as well?
Abhiraj Singh Bhal
Yeah, so I would say, Gaurav, the major reason for this jump that you’re seeing and I would look at the jump more year-on-year rather than quarter-on-quarter because, as we mentioned in the letter as well, there is quarterly seasonality and movement in our margins. Q1 and Q3 are typically better on the margin trajectory. And Q2 and Q4, where we invest ahead of the summer seasonal uptick and the Diwali season, as well as Q4 having our annual appraisals sees typically more depressed margins.
So one of the things we want to call out on this call is that margins should be seen on an annual basis. And if I compare the annual margin trajectory 5.6% in Q3 versus 4.4% in Q3 last year, there’s been a 1.2% improvement. This improvement is something that we feel is in line with the kind of improvement we should see going forward.
Some years it might be slightly more, some years it might be slightly less. But this is the kind of improvement that we are committed to delivering year after year after year, which should hopefully over time help us get to that 9% to 10% of NTV steady state margin guidance that we have given. Majority of this will come from operating leverage.
There’ll be some improvements that will also come from cost initiatives. There’ll be some improvements that will come from semi-variable costs such as customer support and partner support. As and when the benefits of AI start playing out there, contribution margins could move slightly up. But we believe the vast majority of the gains will actually come from operating leverage and growth.
Gaurav Rateria
Got it. My second question is on your supplier utilization. You have given a very nice metric of the number of hours and also when I look at the supplier growth is probably 9% YoY, whereas the underlying volume growth could have been north of 18% to 20%. Is this how the gap should continue to play out going forward as well in terms of the difference between the supplier growth as well as the order growth or the volume growth in the platform from a utilization point of view?
Abhiraj Singh Bhal
We believe so. We believe that there is a lot of headroom for utilization to improve in India Consumer Services ex of InstaHelp. In fact, later in the letter we have also shown partner earnings and there, if you see, we have also shown that the top-performing partners are actually doing much, you know, between 140 to 150 or more hours per month vis-a-vis the 91 average that we have given for nine months FY26. So there is a lot of headroom. That headroom will not be bridged in a single year. But every year, as we have seen for the last several years, every year we will see some improvement in utilization, largely driven by densification. As we densify our micromarkets, our service partner utilization improves. Service partners have to wait less for orders, travel distances come down and order batching and stacking improves.
And that’s what leads to improvement in the hours on the platform that they are able to spend. So that I think will continue. And therefore, as a trend line, the absolute service partner count might lag the growth in the NTV and revenue. Again, there’ll be seasonal fluctuations and quarterly fluctuations in this.
But as a trend line, year on year, that trend should play out.
Gaurav Rateria
Last question is actually around the InstaHelp segment. Looking at the overall breakeven target, is it fair to say that the total investment outlay in this business you may have increased versus what you were thinking earlier, maybe when you started, because you’re getting much better traction than what you thought?
And I know for competitive reasons, I don’t know if you can share how much of the total outlay has been increased to or what is the exact number that one should think about. I mean, will be fine if whatever color we get there. And also related data point on what’s our penetration in terms of micromarket.
You talked about 500 service — microservice markets, right? So what’s our penetration in terms of InstaHelp right now and where are you in that journey? Can we also experiment subscription kind of a product in the InstaHelp? Do you think it makes sense? So these are a few questions around InstaHelp. Thank you.
Abhiraj Singh Bhal
Right, Gaurav. So let me take them one by one. So your first question is that, hey, you would have had certain aggregate number in mind on the overall investment in InstaHelp over the last two, three, four quarters as the business has played out. Do you now feel that that aggregate number to build out the business is higher or lower or the same?
Short answer to that question, Gaurav, is I don’t know. And it’s important for us to acknowledge what we don’t know. It’s too early. And as I mentioned, right now the focus is on cementing our market leadership, penetrating micromarkets well and serving customers and service professionals well.
We believe we have seen enough evidence that this business at scale and at higher AOVs will get to breakeven levels. Those AOVs need to be much higher than where they are today, about 1.8x to 2x. So there is some assumptions that we are making, but we believe with time, as micromarkets mature, densification happens early. Minimum guarantee supports and earning supports for service professionals subsides and discounting for customers subsides as those cohorts mature. These micromarkets first will move towards profitability and eventually the whole category will move towards profitability.
When that will happen and how much money will go in to making that happen is something that we are still learning and it’s something that we are still — when we have much more certainty around it, we certainly will be the first to come out and mention that we don’t have complete certainty around that. That being said, what we do have certainty around now, which we didn’t have certainty around in the last quarter, is that we have line of sight that burn per order will keep coming down and that’s a metric that we will showcase. Maybe for a quarter here and there it might not see exactly a linear decline, but it should come down.
The other certainty we have is that the aggregate profits from the rest of our businesses put together should be able to offset the losses that InstaHelp will incur latest by Q3 FY28, which is the OND quarter of 2027. So those are two clear certainties that we have developed as we have learned more about this business and with time, as we have a deeper understanding and we have a clearer line of sight of when InstaHelp itself will break even and what will be the incremental capital outlay from that point on until it breaks even, we’ll certainly come out with that clear guidance.
Your second question was around the coverage that InstaHelp has vis-a-vis the core India Consumer Services business. Again, without getting into the specifics around how much percentage of India Consumer Services is covered geographically by InstaHelp, I would say it’s still early. It’s a limited number of cities, even within those cities, it’s a limited number of micromarkets and geographies. We’ve obviously started with the high-density micromarkets and the high-density customer clusters first. But over time we will expand coverage to first all the micromarkets in these cities and beyond these cities to all the cities India Consumer Services is present in as well. Then we’ll be calibrated in that endeavor.
Final question around. Today you are largely serving the replacement use case, which is that when regular house help is on leave, then people are calling InstaHelp. But can you launch a subscription or a multi-day booking offering which could start eating into the — rather than just addressing the backfill market, could you also become the primary provider of the service through a subscription offering? I think that is also something that we are exploring. Again early to say whether it will work or not, but it is certainly something that we are experimenting with and exploring.
Gaurav Rateria
Thanks, Abhiraj, and all the very best.
Abhiraj Singh Bhal
Thank you, Gaurav.
Operator
May I request Mr. Manish Adukia from Goldman Sachs to go next?
Manish Adukia
Hi, good evening. Thank you for taking my questions. And again, thanks. Thank you so much for that detailed shareholder letter, which was very helpful. I have a couple of questions. The first one is on the margin guidance and the FY31 EBITDA number that you just called out. So two questions on that one. First is if we look at Q3 FY28 as break even and FY31 margins at about INR1,000 odd crores, assuming a certain revenue growth between then and FY31, let’s say of 20% would imply north of 50% incremental margin between that time period in FY31.
So wanted to just get some sense on the building blocks of that FY31 number of INR1,000 crores and how you arrive at that number and what are the assumptions for both the core India business and also maybe the InstaHelp business. We just wanted to get some color around that. Thank you. That’s my first question.
Abhiraj Singh Bhal
Yeah, great question, Manish. So Manish, currently we have assumed that almost the entire INR1,000 crores of adjusted EBITDA in FY31 comes from our core businesses today, which is India Consumer Services ex of InstaHelp, International and some bits from Native, because we do believe that by then Native will break even and become profitable.
Those are the three major drivers. A very, very small percentage is coming from InstaHelp, if at all. For all practical purposes in our building blocks, we can ignore that as well. So these are the three big drivers, India Consumer Services obviously being the largest, followed by International and Native.
To your second order question, which is, hey, if you’re only breaking even in Q3 FY28, then how do you suddenly get to INR1,000 crores of adjusted EBITDA by FY31? The answer is while at a consol level we will break even in Q3 FY28, the underlying profits in the core businesses, India, International and over time Native as well, will keep growing, Manish, and they will actually get to a fairly large and healthy number even by Q3 FY28.
InstaHelp losses is something that we don’t have complete visibility on, but we believe at some point around that period InstaHelp losses might peak and then start to come down. And if that assumption is to play out, then as InstaHelp losses, the growth driver of that consol adjusted EBITDA going from, sort of, call it 0 to 1,000 is a function of already elevated adjusted EBITDA for the core businesses continuing to compound and InstaHelp losses coming down and eventually breaking even and InstaHelp generating small profits.
There certainly is an assumption that InstaHelp will break even at the minimum by FY31 and if it does, then the rest of the core businesses put together should be sizable enough to generate that kind of profitability.
Manish Adukia
Very helpful, Abhiraj. And maybe just a follow-on question on what you just mentioned about InstaHelp. I know it’s a very nascent business, maybe less than 12 months old for you. So at this stage of the business and at this scale where you operate in, like you said that your assumption is FY31, it should at least be break even, like, at current, let’s say wherever you are in terms of AOV and where you expect them to get to and the utilizations, internally does the math work?
Like, I mean, do you have enough confidence that the math at some point in time should certainly work or is that still, I would say, let’s say a low-confidence kind of outcome in terms of just the economics of InstaHelp for a period of time?
Abhiraj Singh Bhal
No, I think we have reasonable confidence that the underlying economics will work at the AOVs that we have mentioned in the letter, not at the current AOVs but at 1.8x to 2x AOVs with densification playing out as our micromarkets densify as AOVs get to that mature level because customer discounting subsides as customer cohorts mature.
And one of the benefits of densification is that partner utilization improves and consequently the earnings support that you have to give to partners that also subsides. These are the three major areas where the burn is today. As that plays out, we have the confidence that the business will break even. What we don’t have the confidence of is how long that will take, how long will it take for the AOVs to get to that level and what the competitive dynamic will look like. Which is why I’m saying outer limit FY31, it should break even.
Again, I want to caveat, as you rightly said, less than one year old. The reality is none of us really know what’s going to happen in the future. So we can, at best, looking today, draw an arc of where things are heading to. We have a high degree of confidence, let me put it that way, on both those numbers that we have put down, which is Q3 FY28 break even on a consol basis and INR1,000 crores of adjusted EBITDA by FY31.
If this was to change because of anything different that we see, we’ll be the first to come out and let you all know.
Manish Adukia
Very clear. Just last question on the same topic. At this point in time, again, can we say with reasonable probability that InstaHelp will be a build rather than a build plus buy. The probability of you looking to consolidate the market in the foreseeable future would be quite low. Would that be fair to say?
Abhiraj Singh Bhal
Again, it’s not something that we have a view on at this point in time or something that we have even thought about or considered. Right now we are just fully sharply focused on building organically. We have our hands full with serving our customers and service partners. It is not even a thought that has occurred in my head.
Manish Adukia
Very clear. Just one more question for me before I jump back in the queue. I think a broader question. India Consumer Services ex of InstaHelp, which is adding about 1 million users a year currently and delivering about 20% growth. I mean, the ask rate to, of course, deliver a 20% growth rate would mean that you probably need to incrementally keep adding more users or is there room to increase spend per user meaningfully over a period of time? I’m just trying to think that, like, do you have enough visibility that this kind of a growth can sustain over a, let’s say, three to five-year period or over time you can still keep adding as many number of users but mathematically the percentage growth keeps tapering off? So just wanted to get your — maybe thoughts on that. Thank you for taking my questions.
Abhiraj Singh Bhal
Yeah. Manish, it’s certainly our ambition. We’ve mentioned in the letter that the market is growing at 10%,11% and as an innovative company that is in some sense taking this category online, we definitely aspire to grow 2x of the market. So it’s certainly our internal ambition to grow at north of 20% and keep pushing that boundary.
There are three or four elements that go into it. One is, of course, fundamentally, your proposition has to be better than offline and other online players, faster, cheaper, better as we’ve called it. You have to deliver the services faster. Value for money is important for the Indian consumer and with densification, you have to continue to pass on some of the benefits of your improved cost to serve to the end consumer and the service quality has to be better in terms of investments in training, quality, AI-led SOP compliance technology, et cetera. So that’s the fundamental driver. There are, of course, two other important drivers as well for that growth to happen. One is new user acquisition and increasing the pace of new user acquisition through both performance and brand marketing and also increasing coverage, both service category coverage as well as geography coverage.
And the three together become the main drivers. I think meaningful percentage of the growth will come from these three drivers. There will also be growth that will come from more spends. But it won’t be as meaningful as these three drivers in my view. Net net, we are internally, we have definitely the ambition to grow this business at at least 2x of what the market is growing at.
Manish Adukia
Very helpful. Thank you, Abhiraj for answering my questions and all the best.
Abhiraj Singh Bhal
Thank you, Manish.
Operator
May I request Ms. Garima Mishra from Kotak Bank to ask her next question?
Garima Mishra
Thank you so much for the opportunity. My questions also start off with the InstaHelp. Abhiraj, could you provide some color on geographic nuances that you are seeing as well as your overall market share in this particular business? Within the geographies you are present, is there any hero geography that is emerging where metrics are just that much better or the market is maturing faster than rest of your geographies?
Abhiraj Singh Bhal
Yes. Garima, I hear where you’re coming from. I think we are still two or three quarters away from having a hero geography. Of course, there are our early geographies and early micromarkets in Gurgaon, Bangalore and Mumbai are obviously doing well and much ahead of the curve. But the business is still very, very early to call out a clear hero geography. Right now all the top five, six metros that we are operational in and the micromarkets there are high priorities for us, specifically Gurgaon and other parts of Delhi NCR, Bangalore and Mumbai. I think these are very high-priority markets for us. We have to win in all of them. We don’t believe we have the choice of just trying to win in one market and letting go of market share in the others. So we are heads down in execution in all of these.
Hyderabad is the fourth market, which is also a priority for us and then the fifth is Pune. So all of these markets are important. Yes, over the next two, three quarters, I think there will be one — one of these markets will emerge as a hero market for us where the metrics, et cetera, are all aligning well in terms of profitability, maturity of the micromarkets, our own market leadership being cemented.
But we’re still some distance away from that.
Garima Mishra
Sure. Noted. You’ve also provided this insightful table, right, which talks about the benefits of densification and how it positively impacts earnings of the service agents, right? Now if I take the same example and apply it to InstaHelp, right? Now, InstaHelp will end up having an AOV which is lesser than INR450, right, which this table assumes. Right. So for the service agent to actually make an equivalent amount of money, they either need a lot more jobs or they basically have to settle for lower earnings. I mean, how should we view this table then, in the context of unit economics for the InstaHelp business?
Abhiraj Singh Bhal
Understood. So that table was an indicative table, Garima, for our handyman services in Bangalore. But let me talk a little bit around how we think of InstaHelp. So in InstaHelp, we believe that AOVs need to be about 1.8x to 2x of where they are today in that range in steady state for this business to essentially break even. How will that get accomplished in a particular micromarket?
First and foremost, we believe at that AOV level, with adequate partner utilization, we will be able to get to a healthy partner earnings per month. And that’s what we are committed to delivering, which is a healthy partner earnings per month. So partners will be able to do adequate number of jobs every month and every single day with densification to get to their overall earnings target.
And as a result, one of the big spend areas for us in InstaHelp is bridging that gap with earnings support. That earning support will keep coming down and keep minimizing, and the burn because of that earning support will keep coming down. Now this is not complete rocket science. If you look at your own behavior or that of friends, et cetera, that a typical order in InstaHelp category, where you’re calling for a house help worker, might be one to two hours, averaging about one and a half hours or so. So that InstaHelp worker, if well utilized, can comfortably do between three to five orders in a day. And consequently, if you remove Urban Company commissions from that AOV that we’ve indicated, you can arrive at the mathematical number of what an InstaHelp worker would make comfortably in a day if he or she was well utilized without earning support.
And if they were to do that for 20 to 25 days of a month, what would be the earnings they will be able to reach? So that’s sort of in our head, the mental place that that earning support has to get to. The second is obviously customer discounting, which is why the AOVs are lower than that target. That customer discounting subsides as customers spend more time on the platform. The first one or two orders, three orders is the highest orders, you know, four to six, it reduces, and so on and so forth. And eventually, as the customer cohort matures, the discounting gets removed and customers come to full price.
Those are the two big areas, I would say, where much of the burn today is going. Of course, there’s also a lot of — third area is today the level of acquisition on the supply side and the customer side that we’re doing is elevated and that will also sort of subside vis-a-vis as a percentage of the total top line of the category. And all of those basically will come together, in our view, to help this category break even.
Garima Mishra
Very clear. Thanks for that. Just to confirm, when you say 1.8 times to 2 times the order value, you are referring to the net order value of INR172 of 3Q, right?
Abhiraj Singh Bhal
Yes. Correct. Correct. So we don’t think the GOV will necessarily or the GTV will necessarily [Speech Overlap]
Garima Mishra
Change, yeah.
Abhiraj Singh Bhal
So that, that’s where it has to get in some sense. Let’s put it in this way.
Garima Mishra
Yeah, yeah. That discounts per order line has to shrink meaningfully, basically.
Abhiraj Singh Bhal
Yes. It may not go to zero but it has to, you know, 80%, 90% of it has to go away.
Garima Mishra
Understood. Very clear. Last question. So on account of social security, you’ve made these provisions during the quarter. I presume these are towards your permanent and contractual employees. So are these strictly one-time in nature? Also, any sense on what incremental payouts you may need to make to gig workers as and when rules are framed?
Abhay Mathur
Hi Garima, this is Abhay. So on your first question, some of the amounts are actually one-time in nature because we had to take into account the new definition of wages as well as look at leave encashment balances for employees and contract workers specifically. So they’re largely one time.
On the gig workers, while the government has announced intent, the method of computation and the rate of contribution is still unclear. So we’re still waiting to understand those exact details. As we mentioned in the letter, we anyway incur certain costs today on insurance and other well-being measures for the partners. So those are already in our P&L. But once the details are announced, we’ll be able to comment further.
Garima Mishra
Got it. Thank you so much for taking my questions.
Operator
Hi all, we will be extending the call to accommodate a few more questions. May I request Mr. Sachin Dixit from JM Financial to ask his question?
Sachin Dixit
Hi Abhiraj and team and congratulations on a great set of results. My first question to start with is on International, right, where we have seen a very decent growth trajectory picking up at almost like 40%, 45% YoY sort of a growth. This growth, if you can break down, I know you have mentioned to some extent in the shareholder letter as well, but can you break down what is driving this growth?
Is it more customer acquisition or people using more frequently and how sustainable is it? Like, how do you expect it to taper down over a period of time?
Abhiraj Singh Bhal
Thanks, Sachin, for the question. You’re absolutely right. Our international market has seen very, very strong growth not just in this quarter for the last few quarters. In fact, last year in the base we had Saudi Arabia and as you might be aware, from the 1st of January we’ve entered into a 50/50 JV in the Kingdom of Saudi Arabia and therefore we no longer recognize [Technical Issues]
And if I remove the impact of that and look at like-to-like growth, like-to-like growth in this quarter has been about 79%, so very, very healthy. I think, to put it most simply, these markets, UAE, where we are present in Dubai, Abu Dhabi and Sharjah, as well as Singapore, represent, in some sense, markets that are very, very similar to India in terms of customer behavior, density of customers, migration of customers living in apartment condos, et cetera and supply-side dynamics. And there are also markets where there is a strong do-it-for-me culture versus a do-it-yourself culture. So customers are happy to get services availed, whether it’s home cleaning or beauty or massages or other types of services, AC repair, et cetera. So there is inherent similarity in the market structure in terms of high migration index, high density with which customers reside and those favor our business model and also similarities in customer behavior.
We were early in these markets. We’ve been in UAE for more than seven years and in Singapore for more than six years now. So by no stretch of imagination these — we’ve been hard at work and we’ve been investing in these markets and I think some of the fruits of that investment we’re beginning to see right now. In many ways I see these markets as sort of, in terms of just customer behavior, a little ahead of India and therefore a lot of learnings that we have from these markets we also plow back into our India business. So we are very excited by these markets. It’s unclear whether the growth will remain at such elevated levels or not, but we certainly believe that there is strong long-term headroom for growth in both these markets. And given the profitability profile, both markets should now grow profitably and continue to compound profitably going forward.
Sachin Dixit
Got it. On the InstaHelp side of — I know some — a lot of questions have already been asked. Quickly, if you can give any color on any sort of cross-pollination that you are seeing from an existing core services business or as well as on some ordering frequency matrix. Right? So even if you can’t give it right now because the business is nascent, if any view you have where the steady state sort of ordering frequency might pan out on maybe an annual basis or a monthly basis.
Abhiraj Singh Bhal
Yeah. So Sachin, on the first question of cross-pollination, either of InstaHelp users into India core Consumer Services or vice versa, we’re definitely seeing that happen. I would not like to call out a particular percentage or number or trend line there, but we’re definitely seeing it happen and it is encouraging enough for us to continue to invest behind InstaHelp.
To your second question on ordering frequency and usage. InstaHelp’s ordering frequency is definitely an order of magnitude better than the India Consumer Services business. Of course, the AOVs are an order of magnitude lower. It’s hard to tell where steady state frequency will settle, because we are right now largely catering to the backfill market, which creates between two to four instances in a month. But if and when the model works in the more primary market, which is still very unclear, that ordering frequency could also go up. So, it’s still very early days, still hard for us to tell. And there’s also a lot of competitive intensity. So this — some of those orders are also going to our competitors. Yeah.
Sachin Dixit
Got it. Just one final question on the core India Services side. Right? So if I simply subtract your contribution profit, so basically I subtract your EBITDA from contribution profit, it looks like fixed costs have actually dipped QoQ. I do understand that you mentioned some seasonality, but the dip is quite sharp at almost like 12% odd on a quarterly basis. Right? What is driving this fixed cost or I mean, if I am looking from a base case scenario and building forecast, what number should I be using?
Abhiraj Singh Bhal
Yeah, Abhay, you want to take.
Abhay Mathur
Sure, Sachin. So Sachin, there is a bit of a dip in the fixed cost. But I would attribute it more to the rhythm of the business and seasonality. If you see Table 4B, where you disclose the P&L for the India Consumer Services business, you will see a dip in the marketing expenses from INR25 crores to INR13 crores between contribution profit and adjusted EBITDA. I think this is just quarter-on-quarter variation because if you take the two quarters together, we’ve still invested more. So largely the sequential change is just the operating rhythm of the business.
Abhiraj Singh Bhal
And this is one of the reasons why, Sachin, we’ve underscored multiple times that this business is best evaluated. In fact our entire business is best evaluated from a margin standpoint, year-on-year versus quarter-on-quarter, because there’s a lot of fluctuations in the investment models across quarters.
Sachin Dixit
And YoY your marketing expenses should be rising slightly in core business as well. Or you see that those will more or less be flat.
Abhiraj Singh Bhal
So. Sachin. They have risen. Sachin. So if you see.
Sachin Dixit
No, if. Going ahead, sorry I mentioned. I forgot to mention it
Abhiraj Singh Bhal
Yes, I mean, I think they will continue to see some increase because we also are committed to investing behind this business and adding more new users, expanding coverage, et cetera. The endeavor obviously is that they don’t grow in line with top line and that’s how the operating leverage plays out.
Sachin Dixit
Sounds good. Thank you. And all the best.
Abhiraj Singh Bhal
Thank you, Sachin.
Operator
May I request Mr. Srinath V. from Bellwether Capital to ask his question?
Abhiraj Singh Bhal
Srinath, I think you’re on mute. If you can unmute yourself.
Srinath V
Yeah, hi. Am I audible? Abhiraj?
Abhiraj Singh Bhal
Yes, Srinath, how are you?
Srinath V
Yeah, if the InstaHelp category, such scales in line with what quick commerce has done with, like, over 2 crore plus users today using that service, would we need to start looking at stepping up our acquisition funnel or customer acquisition pipeline, given that this service could be an interesting service of onboarding customers for the first time into the app? So just wanted to kind of get your thoughts on that and as well as more services getting into the instant mode outside of just InstaHelp.
So these were the two areas; if you could share some insight, that’ll be great.
Abhiraj Singh Bhal
Yeah, Srinath, we do believe that it’s still very early days for the InstaHelp category and business. We think, and we are hopeful that it will become a very, very large business going forward. And obviously we do look up to how well the quick commerce giants have scaled up and I think we’re definitely committed to building this business to its full potential.
And be rest assured, we will not leave any stone unturned. We will make rational, deliberate and logical choices of investment and based on everything that we see, we will keep coming out with added disclosures to help investors like yourself understand why we are making those choices and why we believe it’s in the right long-term interest of our shareholders.
We will not shy back from investing in this category if and when we see that the potential is very meaningful. And in fact that’s been the track record as well so far. Right now from where we are, we definitely think this is an extremely exciting business that is getting built and can become very large and can recruit a lot of new users at scale to the platform.
To that extent, our acquisition funnels, our modus operandi of acquiring users, all of those will have to adapt to the opportunity ahead. So that’s, that’s the first part. To your — sorry, can you come back with your second question? What was your second question, Srinath? Instant, other services? Yeah.
Srinath V
[Speech Overlap] Yeah. In the app that I see from where I am, couple of more services have started showing up in this tab, next to the main tab as Instant.
Abhiraj Singh Bhal
Correct.
Srinath V
So, wanted to understand how you’re thinking through that broadly.
Abhiraj Singh Bhal
Yeah. So beyond InstaHelp for our core India Consumer Services business, wherever applicable, we want to move all of those services to become relatively instantaneous as well. They may not all of them be available in 10 minutes or 15 minutes, but certainly our endeavor is within the hour and within half an hour and so on and so forth. So whether it’s beauty services, whether it’s electricians, plumbers, carpenters, AC repair, bathroom cleaning, et cetera. All of those services, we are pushing hard to make them more and more instantaneous. These will also follow first in high-density micromarkets. Those will, those are the ones that are moving towards becoming more instantaneous and over time, across geographies and densification is a fundamental driver of moving our core India Services business also towards a more instantaneous service delivery model.
But we’re definitely committed to doing that. And a lot of good learnings from InstaHelp are getting plowed in to our core business to help it accelerate on its trajectory to becoming more instantaneous.
Srinath V
Cool. Perfect. Thanks. Very insightful. I’ll get back into the question queue.
Abhiraj Singh Bhal
Thank you, Srinath.
Operator
May I request Mr. Devanshu Sampat from Quantum Advisors to ask his next question?
Devanshu Sampat
Hi, good evening, can you hear me?
Abhiraj Singh Bhal
Yes, Devanshu. Please go ahead.
Devanshu Sampat
So I have a few questions. So you’ve just mentioned this right now. Actually that was a question that I had. So sometime back you answered that one of the factors that will lead us to growing at a healthy pace will be the requirement to basically service orders faster, right? So quicker, instant — more instant unplanned kind of services that you will, that you’ll have to basically cater to. So will that require meaningful investments as well, something similar to how you’ve been doing it for InstaHelp? Or is this an effort right now just to sort of improve the utilization levels of the current service providers?
Abhiraj Singh Bhal
Yeah, Devanshu, that’s a great question. Our business model in India, core services, already operates at scale and at certain density in micromarkets. And we don’t think incremental investment as such is needed to move that towards instantaneous behavior. In fact, on the contrary, as we flip micromarkets, quote unquote, towards becoming more instantaneous in nature, partner utilization actually improves and those micromarkets tend to become more profitable.
So it’s a win-win for all of us, for the customer, because they’re getting the orders faster. For the service professionals because stacking of orders is better, cancellation rates are fewer and utilization is better and therefore their earnings are better. And obviously for us, because that micromarket is more profitable for us, it’s more a function of just scale. In InstaHelp, we are significantly accelerating the journey from zero to that densification scale in micromarkets.
In our core services business, we already have a great starting point and we are not artificially doing anything out of the ordinary to make that last leap. We are organically pushing micromarkets over as and when they get to that level to become more instantaneous, on the margin wherever we can accelerate faster, we’re doing it. But nothing that sort of breaks the bank.
Devanshu Sampat
Sure, sure, that’s very clear. The second question I have was just around a table that was there in your DRHP. So there were two tables that you had shared regarding the cohort data. Right. So the one I’m talking about is the customer retention basis NTV. Can you please explain what’s the reason for the smile graph basically forming?
It seems that, and it seems to be a little bit more pronounced after COVID. So can you just explain why this happens and why was it different prior to COVID?
Abhiraj Singh Bhal
Yeah, I think the smile graph largely happens on account of customers, A, getting retained well in the same category and over time also trying out newer categories as they get confidence and trust on the platform and consequently customer retention across categories and lifetime value increases. In fact, that table, which we had published in the DRHP and the RHP, did not have the impact of InstaHelp or Native. And as we overlay the impact of those two categories, we believe the lifetime value will only improve further.
To your second point on why did the smile up was more pronounced in COVID? In fact, the opposite, it was less pronounced after COVID. It was much better prior to COVID. And that’s because the cohorts prior to COVID were much smaller scale and therefore early adopters are always more forgiving of the platform. And as cohorts get to certain scale and maturity, the kind of LTV and smile up that they do relative to early adopter cohorts is never the same. But on an absolute level they were still very healthy. COVID definitely gave us that flip where the absolute scale of customer acquisition move to a different orbit.
Devanshu Sampat
Sure. And the last question I have is regarding the purifier filters. So how do you bifurcate them between the two businesses? And with Native now here. So, would you be looking to segregate it in the same way or will it be — how will you change it going forward?
Abhay Mathur
Hi, Devanshu, this is Abhay. I’ll try and answer that question. So I mean the filters, which are used to replace the two-year-old filters within the Native purifier, those are reported on the Native segment. We have also shifted filters sold for other purifier machines under the Native brand to Native services. So all filters today are reported under the Native segment.
Abhiraj Singh Bhal
Basically, Devanshu we — any branded filters that we sell on our platform are also Native brand only. So all of them get reported under the Native segment.
Devanshu Sampat
Sure. So this is not something that has happened in the last quarter or so, right? It’s been the case since you’ve been reporting, since listing [Phonetic].
Abhiraj Singh Bhal
Correct. Yes.
Devanshu Sampat
Okay, sure. Okay, thank you. Wishing you all the very best.
Abhiraj Singh Bhal
Thank you, Devanshu.
Operator
May I request Mr. Darshil Jhaveri from Crown Capital to ask his question?
Darshil Jhaveri
Hello, good evening and thank you so much for taking my question. A lot of my questions have already been answered. So just one question regarding when we are saying that we want to have an EBITDA of INR1,000 crores by FY31, how will the trajectory be? Will it be more linear or non-linear in nature? Like, will we see quarterly improvements happening? Or like how will, like, FY26, you’re saying better than FY25, but FY27 will be more substantially better. How would the graph look like if you could, if we have some kind of projections for that, sir?
Abhiraj Singh Bhal
Darshil, great question. Thank you for asking that question. Let me break down that number into its components and talk about it. So the majority of the FY31 projected INR1,000 crores adjusted EBITDA will come from India Consumer Services ex of InstaHelp, which is our largest, most mature core business. This business will see steady improvement in its adjusted EBITDA year-on-year.
Even this business will see ups and downs on a quarterly basis. But when we look at its margin percentage and absolute adjusted EBITDA year after year, we should see a steady improvement. I would not call it less than linear. It will be faster than top-line growth, but it will be steady and will steadily march higher and higher every year starting FY27 onwards.
FY26 in the previous earnings call we had said will be flat over FY25. But we’ve seen slightly better performance than we had expected and therefore we’ve upgraded to saying FY26 will also be marginally ahead of FY25. FY27 onwards, we should see sustained adjusted EBITDA margin improvement in India Consumer Services ex of InstaHelp.
That’s where we have maximum certainty. It’s also the biggest driver and contributor to that INR1,000 crore. Second place where we have high certainty now is our international business in UAE and Singapore. We’ve been a bit conservative in the projections there because that business is still early. But we believe that business has also broken even sustainably and now it will continue on that margin expansion year-on-year, probably one and a half to two years behind India in its margin maturity. Those are the two areas where we have maximum certainty and those are the biggest drivers of that profitability. Almost all the profits of that INR1,000 crores come from these two. The remainder will come from Native. We have much lesser certainty in Native because it’s a much more earlier business.
And therefore, how soon will Native break even and what will be the total quantum it will contribute for that INR1,000 crores is unclear to us. But we do believe in the foreseeable future Native will break even and it will meaningfully contribute to that INR1,000 crores adjusted EBITDA. The last business where we have very little certainty is InstaHelp. It’s less than a year old.
This is where there’ll be maximum lumpiness, et cetera. And it will be a drag on the overall profitability of the consolidated business for the foreseeable future until it breaks even. This is one of the reasons why we’ve said that Q3 FY28 is the latest by when the consol business should break even. Because we believe by then, regardless of the level of investment we’re making in InstaHelp, we have the confidence as management that the rest of the businesses put together will be able to generate sufficient adjusted EBITDA to offset the losses in InstaHelp. I saw there was one of the questions in, in from some of the panelists, particularly asking why that timeline. So that — that’s the point I wanted to underscore.
Darshil Jhaveri
Okay, fair. Fair enough. And just another question, like, in terms of a user base, so, like, when InstaHelp, are we seeing the traction from the users who are already using Urban Company, or is it like these are new set of category that we are getting on board to our services?
The reason I’m asking is I just want to understand, is the, is the cross sell already happening or are we creating a new category where we can cross sell further?
Abhiraj Singh Bhal
Yeah, Darshil, it’s both. Short answer is it’s both.
Darshil Jhaveri
Okay. Okay, fair. Fair enough. Yeah, that’s it from my side. So thank you.
Abhiraj Singh Bhal
Thank you, Darshil.
Operator
[Operator Closing Remarks]
Abhiraj Singh Bhal
Thank you, everyone. Have a good day.