Shares of Billionbrains Garage Ventures surged to a new short-term high as investors reacted to Jefferies’ bullish coverage on Groww
The brokerage highlighted Groww’s market leadership, fast product launches and strong earnings growth outlook
In contrast, JM Financial warned that broking will continue to account for the bulk of revenues despite diversification efforts
Groww Shares Jump 20% in Three Days as Broker Views Split
Shares of Billionbrains Garage Ventures, which owns online investment platform Groww, extended their rally for a third straight session on Monday, climbing sharply to an intraday peak of ₹172 apiece
(L-R) Neeraj Singh, Ishan Bansal, Lalit Keshre and Harsh Jain, Groww founders
Summary
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Shares of Billionbrains Garage Ventures, the parent company of Groww, jumped up to 7% on Monday, touching an intraday high of ₹172 apiece. This marked a third consecutive session of gains in a row.
The latest rise has pushed the stock’s total surge over the past three sessions to more than 20%. This comes after international brokerage Jefferies initiated coverage on the stock on Friday with a ‘Buy’ rating.
It stated that Groww is India’s largest retail broker by active clients, which is adopting a Robinhood-like strategy that could drive a 35% compound annual growth in earnings over the next three years as newer products scale up and margins improve.
Jefferies pegged the stock’s target at ₹180, suggesting a potential upside of about 12% from its last close of ₹161 on the BSE. The brokerage even highlighted that Groww has emerged as India’s largest brokerage in terms of active clients, despite launching its broking operations only in FY21.
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The firm now commands a 26% market share, well ahead of the 16% held by the next biggest competitor, a lead Jefferies attributes to Groww’s mutual fund–driven onboarding strategy, user-friendly interface and strong organic referrals.
It added that Groww has several growth drivers in place, including steady market share gains in its core broking business, faster scale-up of newer offerings, and a return to margin expansion after a near-term moderation.
Jefferies’ positive outlook is anchored in Groww’s expanding range of offerings, which the brokerage compared to Robinhood’s strategy of rapid product rollouts.
It projects Groww’s revenue to grow at a compounded annual rate of 29% between FY26 and FY28, driven by the introduction and scaling up of newer businesses such as margin trading, wealth and advisory services, commodities, bonds, and loans backed by securities.
On the contrary, JM Financial gave a ‘Sell’ rating to Groww, while initiating coverage on the stock, which is based on valuing the company at 21 times its estimated FY28 earnings per share of ₹7.
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“Despite the DNA of a wealth manager, the company saw 88% of its 2QFY26 revenue coming from broking activities – broking fees, MTF (Margin Trading Facility) and client float. The company has a good track record of product launches – broking was launched only in FY21, still it had become the largest broker by FY24,” it noted.
“We believe MTF is a low-hanging fruit but wealth and consumer credit will need focused execution. Even if consumer credit and wealth scale up, we expect 80%+ of Groww’s FY28e revenue to come from broking,” it added.
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