Groww rises 11% as Jefferies says 'buy', sees stockbroker mirroring Robinhood's growth

Groww rises 11% as Jefferies says 'buy', sees stockbroker mirroring Robinhood's growth

Shares of Groww's parent Billionbrains Garage Ventures rose 10% to Rs 160.27 apiece on December 19 as global brokerage Jefferies initiated coverage on the stockbroker with 'buy' rating.

Jefferies gave a price target of Rs 180 for the stock.

The stockbroker's product velocity model mirrors Robinhood's, said Jefferies, adding it sees revenue growth of 29% CAGR over FY26-28.

Jefferies values Groww at a premium to its peer Angel One as the former has higher growth, better margins and lower F&O exposure.

Groww has most active clients despite starting four years ago, thanks to its mutual fund funnel, easy interface and strong word of mouth, added Jefferies

Last month, Groww reported a 12% year-on-year growth in its consolidated net profit to Rs 471.33 crore in the September quarter, driven by expanding user base and strong asset growth.

Headquartered in Bengaluru, the company had posted a net profit of Rs 420.16 crore in the July-September quarter of the preceding fiscal (FY25).

The broking firm's revenue from operations declined to Rs 1,018.74 crore in the quarter under review, from Rs 1,125.4 crore in the three months ended September 30, 2024, Groww, which released its first quarterly results after listing on stock markets earlier this month, said in a stock exchange filing.

Groww said its total transacting users rose to 19 million, marking a 27% year-on-year increase.

Further, customer assets surged 33% year-on-year to Rs 2.7 lakh crore, driven by resilient flows in both mutual funds and equities.

On November 12, Groww made a remarkable debut, closing with a premium of nearly 31% against the issue price of Rs 100.

The company's initial public offering (IPO) comprised a fresh issue of equity shares worth Rs 1,060 crore along with an Offer for Sale (OFS) component of 55.72 crore equity shares.

The company, which is backed by marquee investors such as Peak XV, Tiger Capital, and Microsoft CEO Satya Nadella, would use proceeds from the IPO to invest in technology development and business expansion.

Founded in 2016, Groww emerged as India's largest stockbroker, with over 26% market share.