Groww Shares Trade Firm After Brokerage Initiates Coverage With Buy Call
Shares of Billionbrains Garage Ventures Ltd., the parent entity of popular discount broking platform Groww, traded marginally higher on Monday after Motilal Oswal Financial Services initiated coverage on the stock with a bullish outlook. The brokerage cited strong market positioning, rapid client acquisition, and improving revenue diversification as key drivers for long-term value creation.
The stock touched an intraday high of ₹159.70 on the National Stock Exchange, gaining as much as 2.7 percent during early trade. However, gains were pared later in the session, with the stock trading at around ₹155.89 by mid-afternoon, up a modest 0.23 percent.
Motilal Oswal Sees Nearly 19 Percent Upside From Current Levels
Motilal Oswal initiated coverage on Groww with a ‘Buy’ rating and set a target price of ₹185 per share. This implies a potential upside of nearly 19 percent from Monday’s closing levels. The brokerage highlighted that Groww’s ability to scale rapidly in a highly competitive environment reflects strong execution and product-market fit.
In its note, the brokerage said Groww has emerged as the country’s largest retail broking platform on an active client basis within just four years of its launch. This swift rise has allowed the platform to gain significant market share, positioning it ahead of several established players in the discount broking space.
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Market Leadership Strengthens Groww’s Competitive Position
Motilal Oswal pointed out that Groww commanded a market share of 26.8 percent in November, which is nearly nine percentage points higher than the second-largest player in the segment. This leadership, according to analysts, gives Groww a strong foundation to cross-sell new financial products and deepen customer engagement.
“Groww’s rapid scale-up to the top position in retail broking highlights its strong digital-first approach and customer-centric design,” the brokerage said, adding that its simplified user interface and focus on first-time investors have played a crucial role in driving adoption.
Revenue Mix Set to Evolve Beyond Core Broking Business
A key highlight of Motilal Oswal’s investment thesis is Groww’s evolving revenue profile. The brokerage expects the contribution of broking revenue to decline steadily over the next few years as the company builds new growth engines. Broking revenue is projected to fall to 67 percent of total revenue in FY28 from a high 85 percent in FY25.
This shift, analysts believe, will lead to a more resilient and balanced earnings profile, reducing the company’s dependence on transaction-based income that is sensitive to market cycles.
New Growth Levers Aim to Improve Earnings Quality
Motilal Oswal noted that Groww is actively investing in additional business verticals to diversify revenues. These include the expansion of its margin trading facility, growth in the commodities trading franchise, scaling up the loan against shares portfolio, and a planned entry into wealth management services.
Key diversification drivers highlighted by the brokerage include:
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Expansion of margin trading facilities to improve yield per customer
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Growth of the commodities segment to tap active traders
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Rising loan against shares book to generate steady interest income
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Entry into wealth management to target higher-value clients
The brokerage said these initiatives could meaningfully improve earnings quality and provide better visibility on cash flows over the medium term.
Shift in Revenue Mix Seen as Structural Positive
Motilal Oswal believes that a lower reliance on pure broking revenues could insulate Groww from periods of low market activity. As revenue streams become more diversified, earnings volatility is expected to moderate, making the business model more sustainable.
“Diversification into lending, commodities, and wealth management should help Groww transition from a transaction-led model to a more balanced financial services platform,” the brokerage said.
Stock Movement Reflects Cautious Optimism Among Investors
While the stock’s intraday move showed initial enthusiasm following the coverage initiation, the marginal close suggests investors are weighing long-term potential against near-term market conditions. Market participants said the measured reaction reflects broader caution in fintech and capital market stocks amid ongoing volatility.
Analysts added that Groww’s valuation and execution on diversification plans will remain key factors influencing stock performance in the coming quarters.
Long-Term Outlook Hinges on Execution and Market Conditions
Looking ahead, Motilal Oswal expects Groww to deliver steady growth as India’s retail participation in capital markets continues to expand. The brokerage remains constructive on the company’s prospects, citing its strong brand recall among young investors and its ability to innovate rapidly.
As one analyst summed up, “Groww’s leadership in retail broking gives it a strong launchpad, but the real value will be unlocked as non-broking businesses scale up and contribute meaningfully to earnings.”
For investors, the initiation of coverage with a ‘Buy’ rating underscores confidence in Groww’s long-term strategy, even as near-term stock movement remains modest. With a clear roadmap for diversification and a growing customer base, Groww is positioning itself as a broader financial services platform rather than just a discount broker.
