Shares of Billionbrains Garage Ventures fell 2%, snapping a five-day rally, even as brokerages initiated coverage with bullish views. BofA and JPMorgan highlighted strong growth prospects, profitability and market leadership, while flagging near-term risks from market slowdown and potential supply overhang following the expiry of the post-IPO lock-in period.

Groww share price dips over 2% after massive 26% gain in 5 sessions. Right time to buy?

Synopsis

Shares of Billionbrains Garage Ventures fell 2%, snapping a five-day rally, even as brokerages initiated coverage with bullish views. BofA and JPMorgan highlighted strong growth prospects, profitability and market leadership, while flagging near-term risks from market slowdown and potential supply overhang following the expiry of the post-IPO lock-in period.

Shares of Billionbrains Garage Ventures, the parent of Groww, declined 2% to hit their intraday low of Rs 203 on the BSE on Thursday. The drop snapped the stock’s five-day winning streak, during which it had surged 26%.

On Wednesday, BofA Securities initiated coverage on the retail brokerage platform with a Buy rating and a target price of Rs 235, implying an upside of around 13% from the last closing price. The Wall Street firm said Billionbrains Garage Ventures is well placed to benefit from India’s growing retail investor base. It expects the company to deliver revenue growth at a CAGR of 30% over FY26–FY28. The initiation comes after the stock has already gained 31% in calendar year 2026.

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BofA highlighted Groww’s strong profitability, noting further scope for improvement as operating leverage kicks in. It expects EBITDA margins to expand to 67% and PAT margins to rise to 52% by FY28, levels it considers superior to peers. The brokerage has valued the company at 39x its estimated FY28 earnings.

The bank, however, flagged a couple of near-term risks for investors. A slowdown in broader capital market conditions could weigh on transaction volumes and impact revenue. It also highlighted the expiry of the six-month post-IPO lock-in period, which may lead to a supply overhang as early investors become eligible to sell their shares.

Last month, JPMorgan initiated coverage on Groww with an ‘overweight’ rating and a price target of Rs 210 per share. The brokerage described Groww as the most lucrative India-listed consumer internet platform, highlighting its consistent market share gains and strong appeal among aspirational investors. It also noted the company’s robust cross-selling capabilities and operating leverage, which could enable it to outpace overall market growth.

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JPMorgan added that while Groww appears expensive when viewed purely as a discount broker, it looks attractively valued when assessed as a broader internet platform.

Groww is the largest broker in terms of active clients, with a 28% market share, compared with 15% for the second-largest player. This leadership is driven by its strong mutual fund funnel, an easy-to-use UI and UX, and robust word-of-mouth traction.

In Q3, the company posted a 27.8% year-on-year decline in consolidated net profit at Rs 546.93 crore, compared to Rs 757.11 crore in the same period last year. Revenue from operations, however, showed strong growth, rising 24.8% year-on-year to Rs 1,216.07 crore, up from Rs 974.53 crore in the year-ago quarter.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

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