Groww Stock Jumps on Kotak Buy Call, ₹190 Target Sparks Rally
Overview
Billionbrains Garage Ventures, the parent of discount broker Groww, saw its shares climb for a second consecutive session. Kotak Securities initiated coverage with a 'Buy' rating and a ₹190 price target, citing steady market share gains, improving unit economics, and strong growth potential. The brokerage projects revenue growth and margin expansion.
Analyst Optimism Fuels Groww Rally
Billionbrains Garage Ventures, the listed parent company of online brokerage Groww, extended its gains for a second straight trading day. The surge followed Kotak Securities' initiation of coverage on the stock with a 'Buy' recommendation and a price target of ₹190. This target implies a significant potential upside of over 16% from recent closing levels.
Growth Projections and Margin Expansion
Kotak Securities analysts expressed strong optimism regarding Groww's future performance. They forecast a robust 20% compound annual growth rate (CAGR) for revenue between fiscal years 2026 and 2028. The brokerage also anticipates substantial expansion in EBITDA margins, potentially reaching 65% by fiscal year 2028. This improvement is expected to be driven by growth in wealth management services and higher-margin offerings such as margin-trading facilities (MTF) and commodities.
Market Position and Client Base
Groww has demonstrated resilience and strategic growth, consistently expanding its share of active demat accounts even in a challenging market. Its market share grew from approximately 26% at the start of calendar year 2025 to over 27% by year-end. The company serves a substantial base of 12.1 million active clients, a figure that provides ample opportunity for monetization without compromising client retention.
Financial Strength and Risks
The brokerage highlighted Groww's strong internal accruals, which are deemed sufficient to fund expansion in MTF and on-balance sheet lending, ensuring capital efficiency. The company maintains an underleveraged balance sheet with a healthy Return on Equity (RoE) of 25%. Despite the positive outlook, Kotak Securities noted potential risks, including market cycle volatility, regulatory changes, execution challenges in wealth management, and intense competition within the broking sector.
