Brokerage firm Jefferies has initiated coverage on Billionbrains Garage Ventures, parent company of India’s largest broking platform Groww on Friday, December 19.Jefferies initiated coverage on Groww’s parent with a “buy” recommendation, with a price target of ₹180 apiece, implying a potential upside of 26% from Thursday’s closing levels.
Despite starting the business only in financial year 2021, Groww has become the largest broker in the country with regards to active clients, according to Jefferies, who believes that the company has several levers to grow its Earnings per Share (EPS) at a Compounded Annual Growth Rate (CAGR) of 35% over financial year 2026-2028.
The brokerage wrote that this 35% EPS growth CAGR could be realized by a 19% growth in the broking business led by client and market share gains, a 5x growth in new initiatives like its margin trading facility (MTF) and wealth management, along with a 700 basis points margin expansion.
Groww’s revenue may grow at a 29% CAGR over financial year 2026-2028, according to Jefferies, driven by product velocity and strong growth in client assets. The brokerage also expects the new business to contribute to 20% of the company’s financial year 2028 revenue, led by the MTF and wealth business, compared to the 1% contribution in financial year 2025.However, Jefferies expects Groww’s adjusted EBITDA margin to decline in the current financial year, due to lower broking revenue and wealth management acquisitions being break-even. Margins had grown from 36% in financial year 2023 to 59% in financial year 2025. From financial year 2026, margins could expand by 700 basis points led by increasing Average Revenue Per User (ARPU), ramp up of new products, and marketing spends being similar to internet peers.
Despite starting the business only in financial year 2021, Groww has become the largest broker in the country with regards to active clients, according to Jefferies, who believes that the company has several levers to grow its Earnings per Share (EPS) at a Compounded Annual Growth Rate (CAGR) of 35% over financial year 2026-2028.
The brokerage wrote that this 35% EPS growth CAGR could be realized by a 19% growth in the broking business led by client and market share gains, a 5x growth in new initiatives like its margin trading facility (MTF) and wealth management, along with a 700 basis points margin expansion.
Groww’s revenue may grow at a 29% CAGR over financial year 2026-2028, according to Jefferies, driven by product velocity and strong growth in client assets. The brokerage also expects the new business to contribute to 20% of the company’s financial year 2028 revenue, led by the MTF and wealth business, compared to the 1% contribution in financial year 2025.However, Jefferies expects Groww’s adjusted EBITDA margin to decline in the current financial year, due to lower broking revenue and wealth management acquisitions being break-even. Margins had grown from 36% in financial year 2023 to 59% in financial year 2025. From financial year 2026, margins could expand by 700 basis points led by increasing Average Revenue Per User (ARPU), ramp up of new products, and marketing spends being similar to internet peers.
The stock currently trades at 27 times December 2027 estimated Earnings Per Share, which is a 30% discount to its global peer Robinhood, despite superior growth. Jefferies expects that discount to narrow, as the MTF and wealth management businesses scale up. “We value Groww at a premium to its Indian peer Angel One, considering the former’s higher growth, better margins and lower F&O exposure,” Jefferies wrote in its note.
This is the first coverage that Bilionbrains Garage Ventures as received.
Shares of Groww ended 0.4% higher on Monday at ₹143.57. The stock is down 15% in the last one month, having corrected from its post-listing high of ₹193.8.
