Groww Shares In Focus As Kotak Securities Initiates Buy Coverage — Check Target Price

Kotak Securities has initiated coverage on Billionbrains Garage Ventures Ltd (Groww) with a Buy rating and a target price of Rs 190, implying a valuation of around 35 times March 2028 estimated earnings. The brokerage’s constructive medium-term outlook is anchored in Groww’s ability to build scale through trust and technology, expand monetization across multiple financial products and deliver rising profitability supported by strong unit economics.

Kotak believes Groww’s growth engine is structurally differentiated, driven by a durable product-led flywheel that enables the platform to acquire, engage and monetize users at significantly lower costs than peers. This advantage is reinforced by expanding revenue streams across broking, margin trading facility, commodities, wealth management and consumer credit, reducing reliance on pure turnover-linked broking income. Scalable in-house technology further enhances speed, reliability and cost efficiency, positioning Groww well for the next phase of growth.

In terms of earnings trajectory, Kotak expects financial year 2026 to be a year of broadly flat earnings growth, followed by a sharp acceleration thereafter. Earnings are projected to grow by about 35% in fiscal 2027 and around 25% in financial year 2028, led by strong growth in underpenetrated products such as MTF and commodities, the addition of wealth revenues through both organic and inorganic initiatives, and operating leverage benefits that should drive margin expansion.

Groww’s product-first DNA, organic customer acquisition engine and technology focus have helped the platform scale faster and monetize more effectively than peers, while continuously broadening its revenue mix.

Kotak notes that Groww has consistently gained market share across products, demonstrated pricing power and improved unit economics. The wealth management pivot is seen as a key medium-term driver, with successful execution critical to sustaining premium, platform-like valuation multiples typically associated with diversified global peers.

Kotak expects Groww to deliver around 20% revenue CAGR over FY2026–28, with Ebitda margins expanding to about 65% by fiscal 2028 from roughly 60% in financial year 2025. Margin improvement is expected to be driven by scale benefits, declining cost intensity and higher-margin revenue streams such as MTF and commodities.

Marketing costs as a percentage of revenue have already fallen sharply to 12% in fiscal 2025 from 21% in financial year 2023 and are expected to decline further to around 10% by fiscal 2028. Strong internal accruals are expected to comfortably fund growth in MTF and on-balance sheet lending, keeping the business capital efficient. Kotak also highlights Groww’s under-leveraged balance sheet and a healthy return on equity of around 25%.

While the outlook remains positive, Kotak flags several risks to its thesis. These include market cycles and changes in retail investor behavior, the possibility of prolonged regulatory scrutiny extending to other areas of broking, execution risks in scaling the wealth management business and transitioning toward more recurring revenues, intense competition within the broking space and the risk of mature users migrating toward more advanced trading platforms.