Groww shares rise as brokerages lift targets to Rs 250 after Q1
Groww's shares rebounded 4% after the Indian brokerage reported a doubling of EBITDA, prompting three major analysts to raise earnings estimates and set a unified price target of Rs 250.
Groww shares rebounded 4% on Friday after the Indian brokerage reported a doubling of first-quarter EBITDA, prompting three major brokerages to lift their price targets to a uniform Rs 250. Operating revenue surged 66% year-on-year to Rs 1,504 crore, while EBITDA jumped 101% to Rs 971 crore. Net profit rose 7% to Rs 735 crore.
The results triggered a notable shift in analyst sentiment, most strikingly from JM Financial, which upgraded the stock to "Buy" from "Sell" and raised its target from Rs 170. Jefferies maintained its positive stance, noting the company is positioned to capture the ongoing shift of Indian household savings into equities. Motilal Oswal also reiterated its buy rating.
A key driver of the optimism is improving operating efficiency. JM Financial highlighted that Groww's cost-to-income ratio fell by 3 percentage points sequentially to 36%, reflecting disciplined cost control. The firm raised its earnings-per-share estimates by 4% for fiscal 2027, 6% for 2028 and 11% for 2029, now valuing Groww at a 50% premium to rival Angel One, up from 20% earlier.
Underlying business metrics showed resilience even as retail trading activity moderated from its fourth-quarter peak. Groww added 115,000 net clients during the quarter and retained its position as India's largest platform for direct mutual funds, with assets under management reaching Rs 1.9 lakh crore. Its systematic investment plan inflows grew 32% year-on-year, outpacing the broader industry's 16% growth.
In stock broking, deliberate risk controls reduced Groww's retail average daily turnover share to 15.1% sequentially, though this was still 3.3 percentage points higher than a year earlier. The firm offset this by expanding its retail market share in commodity derivatives to 28.6% across the MCX and NSE. Motilal Oswal, which based its revised target on 38 times fiscal 2028 estimated earnings, expects overall broking orders to grow by more than 20% over the next two fiscal years.
