Kotak Initiates Groww Coverage With 'Buy', Projects 20% Stock Upside
Overview
Kotak Institutional Equities launched coverage on Groww (Billionbrains Garage Ventures Ltd.) with a 'Buy' rating and a ₹190 price target, suggesting a 20% potential gain. This adds to positive analyst sentiment from Motilal Oswal and Jefferies. Analysts praise Groww's product-led growth, expanding monetization, and technology. Groww is now India's largest broker by active clients. Projections forecast a 35% EPS CAGR through FY28, though JM Financial maintains a 'Sell' rating citing valuation.
Stocks Mentioned
Kotak Initiates Coverage on Groww with 'Buy'
Kotak Institutional Equities has initiated coverage on Billionbrains Garage Ventures Ltd., the parent company of discount broking platform Groww, with a 'Buy' recommendation and a price target of ₹190 per share. This valuation implies a potential 20% upside from Friday's closing levels.
Strong Analyst Support
The brokerage firm's constructive medium-term view is underpinned by Groww's durable, product-led growth model. Analysts point to expanding monetization opportunities across broking, margin lending, wealth management, and consumer credit, supported by a scalable in-house technology platform. This 'Buy' call joins similar positive initiations from Motilal Oswal, which set a ₹185 target, and Jefferies, which advised 'Buy' with a ₹180 target in December.
Market Leadership and Growth Projections
Groww has rapidly ascended to become India's largest broker in terms of active clients, despite commencing operations only in fiscal year 2021. Jefferies has previously valued the company at a premium compared to peers like Angel One, citing faster growth and superior margins. Looking ahead, Groww is projected to deliver a 35% Earnings Per Share (EPS) Compound Annual Growth Rate (CAGR) from FY26 to FY28. This growth is expected to be driven by an approximate 19% increase in the core broking business through client retention and market share gains. Newer initiatives, including margin trading facilities and wealth management, are anticipated to see fivefold expansion, coupled with nearly 700 basis points of margin improvement.
Contrasting Views Emerge
Not all market watchers are convinced. JM Financial initiated coverage in December with a 'Sell' rating and a ₹144 price target, arguing that Groww's current valuation is stretched for a business predominantly in the broking sector.
Stock Performance
Shares of Groww concluded Friday's trading session down nearly 1% at ₹158.90. The stock remains approximately 59% higher than its initial public offering price of ₹100. However, it is currently trading about 18% below its post-listing high of ₹193.
