Citi Backs Angel One, Groww: Eyes 32% Jump in Capital Market Stocks
Overview
Global brokerage Citi initiated coverage with 'Buy' ratings on Angel One and Groww parent Billionbrains Garage Ventures Ltd. Citi forecasts up to 32% upside, citing their evolution into one-stop financial platforms, strong customer acquisition, niche leadership, and significant cross-sell potential in India's expanding capital markets.
Stocks Mentioned
Citi Initiates Coverage with 'Buy' Ratings
Global brokerage Citi has thrown its weight behind two prominent capital market platforms, Angel One and Billionbrains Garage Ventures Ltd. (Groww), initiating coverage with 'Buy' recommendations and flagging significant upside potential.
Citi has assigned Angel One a price target of ₹3,215 per share. For Groww, the brokerage set a target of ₹195 per share, signaling strong conviction in both companies.
Evolving Platforms Attract Citi's Eye
Citi noted a broader industry trend where large retail broking platforms are transforming. These firms are moving beyond traditional brokerage services to become comprehensive financial product hubs. This evolution is seen as a key driver for future growth.
Strengths Highlighted
For Angel One, Citi pointed to its aggressive customer acquisition strategies and robust execution capabilities as core strengths. The brokerage views these factors as critical support for its positive stance on the stock.
Groww, according to Citi, stands out due to its leadership in niche markets, a customer-centric approach, and high brand recognition. The company's lean business model also contributes to superior operating efficiencies, which Citi finds compelling.
Growth Potential and Risks
Cross-selling opportunities are identified as substantial for both Angel One and Groww. A rapidly expanding product portfolio and a large, fast-growing customer base provide fertile ground for these opportunities. Citi believes this is a significant tailwind.
However, the brokerage acknowledged near-term risks, including market volatility and potential regulatory challenges. Despite these, the nascent stage of India's capital markets and shifting consumer behavior in financial product purchases position these platforms favorably for long-term growth.
Re-rating Depends on Diversification
Citi stated that a meaningful re-rating for both Angel One and Groww will hinge on their success in diversifying their business operations. Diversification beyond core offerings is seen as key to unlocking further valuation potential.
Analyst Consensus
Currently, nine analysts recommend 'Buy' for Angel One, with two suggesting 'Hold' and one advocating 'Sell'. All four analysts covering Groww have initiated with a 'Buy' rating.
