Shares of Billionbrains Garage Ventures, the parent of online broker Groww, jumped as much as 13% on Friday to Rs 162.65 on the BSE after Jefferies initiated coverage on the stocks with a 'buy' rating, arguing that India’s largest retail brokerage by active clients is following a Robinhood-style playbook that could deliver a 35% compound annual growth in earnings over the next three years as new products scale and margins expand.
The brokerage set a price target of Rs 180, implying 26% upside from the previous close and valuing the company at 33 times its estimated December 2027 earnings. That multiple represents a roughly 15% discount to US-based Robinhood, which Jefferies said Groww increasingly resembles in both strategy and execution.
Jefferies believes Groww now has multiple levers to sustain high growth, including continued gains in its core broking business, rapid scaling of newer products and a resumption of margin expansion after a near-term dip.
Jefferies highlighted that nearly half of Groww’s client assets are currently held in mutual funds that do not generate revenue for the platform. As Groww cross-sells higher-yield products to these clients, the brokerage estimated that newer businesses could contribute about 20% of revenues by FY28, up from around 1% in FY25, led primarily by margin trading and wealth management.
On profitability, the brokerage said Groww’s adjusted EBITDA margin had already risen from 36% in FY23 to 59% in FY25, higher than both Robinhood and domestic peer Angel One. While margins are expected to contract in FY26 due to softer broking revenues and the initial drag from the wealth business, Jefferies expects a 700 basis point expansion from the FY26 trough as operating leverage kicks in, average revenue per user rises, and marketing spend remains in line with other internet peers.
Jefferies flagged regulation, competition and cyber threats as the key risks to its thesis, but said Groww’s ability to execute on new businesses would be central to any re-rating.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times.)
