Groww Shares Rally on 66% Revenue Jump and Broker Upgrades After Q1 Results
Indian brokerage platform Groww saw its shares rise 9% over two sessions after reporting a 66% year-on-year revenue increase, prompting major brokerages to upgrade the stock on improving operating leverage and sustained market share gains.
Shares of Indian financial services platform Groww rallied 9% across two trading sessions following the release of robust first-quarter results. The company reported a 66% year-on-year surge in revenue from operations to 1,504 crore rupees, up from 904 crore rupees in the same period last year.
Net profit for the quarter increased 7% to 735 crore rupees from 686 crore rupees a year earlier. Earnings before interest, taxes, depreciation, and amortization more than doubled to 971 crore rupees, representing a 101% increase from the year-ago period.
The resilient performance has shifted analyst sentiment, with JM Financial upgrading the stock to "Buy" from "Sell" and lifting its target price to 250 rupees. The brokerage cited stronger growth visibility and a cost-to-income ratio that improved by 3 percentage points quarter-on-quarter to 36%.
JM Financial subsequently raised its earnings per share estimates for FY27, FY28 and FY29 by 4%, 6% and 11%, respectively. It now applies a 50% valuation premium to Groww over rival Angel One, up from 20% previously, pointing to higher margins and stickier client assets.
Motilal Oswal also revised its earnings estimates upward by 1% for FY27 and 3% for FY28, maintaining a 250-rupee target price based on 38 times FY28 estimated earnings. The firm projects overall broking orders to grow by more than 20% over the next two fiscal years, driven by market share gains and higher revenue per order.
Operationally, Groww strengthened its market position during the June quarter by adding 115,000 net clients despite a broader industry slowdown in retail trading. The platform retained its status as India’s largest direct mutual fund distributor, managing 1.9 lakh crore rupees in assets.
Systematic investment plan inflows grew 32% year-on-year, significantly outpacing the industry average growth of 16%. In stock broking, retail average daily turnover order market share settled at 15.1%, while commodity derivatives market share expanded to 28.6% across the MCX and NSE exchanges.
Looking ahead, management indicated that artificial intelligence will fundamentally transform its customer service and product development. While the company plans significant investments in AI to enable zero-wait customer query resolution and personalized research, it expects its existing scale to absorb these costs without materially impacting margins.
