Groww Shares Extend Rally On Jefferies’ Robinhood Comparison, But JM Financial Flags Tail Risks
JM Financial initiated a 'Sell' on the firm noting that broking orders fell 29% over past two quarters in FY25 following regulatory action from Oct. 24
Billionbrains Garage Ventures Ltd. The parent company of Groww’s share price continued its rally as it rose 6.58% on Monday following a spike of over 13% on Friday. The rally comes on the heels of bullish commentary by Jefferies.
The brokerage initiated coverage on the discount broker highlighting the fintech's strong growth and even drawing comparisons to American trading app, Robinhood. "Groww is Groww-ing up to be Robinhood," Jefferies said in its Friday note, as it initiated coverage on the counter with a 'buy' rating and a target price of Rs 180.
Jefferies acknowledged Groww's strong growth and how it has become the largest stockbroker in India. The firm admits the fintech has had a similar growth path as Robinhood.
However, on Monday, JM Financial initiated a 'Sell' on the firm with a target price of Rs 144. The brokerage noted that broking orders fell 29% over past two quarters in FY25 following regulatory action from Oct. 24, calling this a significant tail risk for Groww’s business model.
While wealth and lending segments are expected to scale quickly, JM Financial believes broking will continue to dominate revenue. Despite these concerns, the firm projects Groww’s revenue and PAT to grow at a CAGR of 34% and 45%, respectively, over FY26–FY28.
Founded by Vlad Tenev and Baiju Bhatt, the application started off with the promise of making trading easier and accessible to everyday user, specifically targeting the young audience.
Notably, Groww delivered a stronger post-listing performance. The stockbroker-co was listed on Nov. 12 at around Rs 112 on the NSE, accounting for a 12 premium over its IPO price of Rs 100. The stock surged to Rs 134 on debut before closing near Rs 131.
