Groww shares factor in all positives, non-broking business to drive growth, UBS says

About this update from Billionbrains Garage Ventures Limited

Shares of Billionbrains Garage Ventures Ltd., the parent company of Groww, are in focus on Monday, March 2, as brokerage firm UBS has initiated coverage on the stock. UBS has initiated coverage with a "neutral" rating on Groww with a price target of ₹185 per share, indicating an upside potential of 13% from its previous close. The brokerage believes the high growth phase for Groww's broking business is over, with a 79% compound annual growth rate (CAGR) seen between financial year 2023 - 2025. That significant CAGR growth is likely to slow down to 17% between financial year 2026-2028, UBS said. Groww is doubling down on non-broking businesses, by diversifying into margin trading facility (MTF), wealth management and credit by leveraging its platform. UBS believes that the non-broking business will be the next growth driver for Groww, with its revenue expected to grow at a 59% CAGR over financial year 2026-2028. UBS expects costs to normalise, enabling operating leverage and margin expansion. However, it said that the current valuations of 37 times its one-year forward price-to-earnings ratio largely reflects the positives. Of the six analysts who have coverage on the stock, four have a "buy" rating and one each have "hold" and "sell" ratings. Shares of Billionbrains Garage Ventures ended the previous session 0.9% lower at ₹163.5 apiece. The stock has gained 5.3% this year, so far and remains above its issue price of ₹100 per share.

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