JM Financial has officially initiated coverage on newly listed internet giants Urban Company and PhysicsWallah, issuing Buy ratings for both. The brokerage highlights these companies as high-growth, scalable leaders within India’s digital economy, projecting significant upside from current levels. **Urban Company: Dominating the Gig Economy** Urban Company currently holds a commanding **60% market share** in the home services sector. The stock is trading near **₹108**, with JM Financial assigning a target price of **₹125**, implying a **16% upside**. The company recently reported a **33% revenue surge** to **₹383 crore** for the quarter ending December 2025. While it posted a net loss of **₹21 crore** for the period due to high investment costs, its core operations remain robust. A key driver for future growth is "InstaHelp," which has already crossed **50,000 daily bookings**. Analysts view this as a potential "Blinkit-like" opportunity that could revolutionize high-frequency domestic services. **PhysicsWallah: Digital Efficiency vs. Offline Scaling** PhysicsWallah has faced recent market pressure, with shares touching a low of **₹87.60**, well below its **₹109** issue price. However, JM Financial sees this as a recovery play, setting a target of **₹110** which suggests a **23.5% upside**. The edtech firm’s financial strength lies in its digital-first model. In the first nine months of FY26, revenue reached **₹2,980 crore**, already surpassing its entire FY25 performance. For the December 2025 quarter alone, the company reported a net profit of **₹102 crore** on revenue of **₹1,082 crore**. Its marketing spend remains remarkably lean at roughly **10% of revenue**, compared to the **20–30%** industry average. **Market Outlook and Risks** The broader Indian edtech sector is shifting toward "phygital" models. PhysicsWallah is aggressively expanding into K-12 schooling with a **₹400 crore** strategic pivot and the launch of its AI mentor, "Aryabhata." For Urban Company, the primary moat is its network effect across **12,000+ service micro-markets**. The company maintains a zero-debt balance sheet and a strong cash position, allowing it to absorb the current EBITDA losses associated with new category launches. Investors should note that while the digital segments of both companies show high-margin stability, scaling physical infrastructure—such as offline tuition centers for PhysicsWallah and regional service hubs for Urban Company—remains the primary execution risk. At current valuations, the brokerage views the risk-reward profile as favorable for long-term growth.