E-Paper
Groww has the wherewithal to become India's Robinhood, Jefferies says
Groww has a product velocity model similar to that of Robinhood Markets in the US, Jefferies says while initiating coverage of the stock with a “buy” rating.
Groww has the wherewithal to become India's Robinhood Markets Inc., Jefferies said while initiating coverage of the newly listed stock with a “buy” rating.
The online trading app operated by Billionbrains Garage Ventures Ltd. is India's largest brokerage in terms of active clients, despite starting the business in FY 21, Jefferies analysts Supratim Datta, Prakhar Sharma and Satvik Karabar wrote in a note dated 19 December 2025.
According to them, Groww has several levers to grow its earnings per share at compounded annual growth rate of 35% over FY26-28. These include:
- 19% growth in broking business led by client vintage and market-share gains.
- 5X growth in margin trading facility and wealth management business.
“Groww has a product velocity similar to Robinhood,” Jefferies said. The firm has quickly has quickly grown its bouquet of offerings to include commodities trading, bonds, wealth management and loans against securities. “This allows Groww to cross-sell to mutual fund-only clients (50% of the business) where it earns no revenue.”
Shares of Groww surged as much as 13.11% to ₹163.00 apiece on the vote of confidence from Jefferies, even as the benchmark Sensex traded up to 0.50% higher at 84,869.25 points.
Jefferies has a target price of ₹180 on the stock, which implies 33X earnings-per-share estimate for December 2027. That's still a discount of 15% to the Robinhood stock.
Wealth Management
A significant contributor to Groww's revenue going ahead would be the wealth management business, according to Jefferies.
“We see Groww's wealth business valued at ₹3,800 crore, assuming CAGR of 30% and improvement in cost-to-income ratio to 67% by FY30,” the Jefferies analysts said.
This assumes 10% penetration within Groww's client base. A 20% penetration would add 5% more to the target price.
Margin Expansion
Net profit of India's largest online stockbroker rose 24.6% over the previous quarter to ₹471 crore in the three months ended 30 September, on revenue that increased 12.7% sequentially to ₹1,019 crore, according to an exchange filing on 21 November 2025.
The earnings before interest, tax, depreciation and amortisation increased 25% QoQ to ₹604 crore, at an EBITDA margin of 59.3%—up 590 bps sequentially. Between FY23 and FY25, the EBITDA margin improved by 23 points to 59%.
“This is higher than Robinhood and Angel One,” Jefferies said. “We expect margins to contract in FY26, due to lower broking revenue and wealth management acquisition being break-even.”
Thereafter, Jefferies expects 700 bps improvement due to:
- ramp-up of new product offerings
- increased average revenue per user
- competitive marketing spends
That Groww has developed its UI/UX and underlying technology in-house is margin accretive in the long run, Jefferies said.
“Groww trades at 27X 1-Year EPS, a 30% to Robinhood despite better growth,” Jefferies said. “We value Groww at a premium to its Indian listed peer Angel One considering the former's higher growth, better margins and lower F&O exposure.”
