UBS has initiated coverage on Billionbrains Garage Ventures (Groww) with a Neutral rating and a 12-month price target of Rs 185, implying valuation at 36x September 2027 earnings estimates. The brokerage described Groww as India's largest retail broking platform, with a 28% share of NSE active clients as of January 2026. UBS highlighted the company's strong mutual fund franchise, user-friendly interface and technology-led positioning as key strengths underpinning its leadership.
However, UBS said the current valuation - about 37x FY27 estimated earnings - largely reflects the positives, limiting further upside unless execution surpasses expectations.
Broking Growth Moderating
UBS noted that Groww was among the key beneficiaries of the surge in retail trading activity in recent years. Broking revenue grew at a 79% compound annual growth rate between FY23 and FY25.
Looking ahead, the brokerage expects broking revenue growth to moderate to 17% CAGR over FY26-28, reflecting normalization in market activity. Trading and investing revenue streams - including margin trading facility, wealth management and credit - are expected to grow at 59% CAGR over the same period, albeit on a smaller base.
UBS said the moderation in broking growth is expected to enable operating leverage and margin expansion over time.
Non-Broking Monetisation
The brokerage sees incremental growth being driven by non-broking segments. Revenue from these segments is projected to grow at 59% CAGR over FY26-28, up from a 7% CAGR over FY21-25.
UBS said Groww's expansion into adjacent offerings such as credit and wealth products could differentiate it from traditional brokers. However, comparisons with US peers remain constrained due to differences in regulatory structures and product monetisation avenues.
Operating Leverage to Aid Margins
UBS expects operating revenue to grow at 22% CAGR between FY25 and FY30, slightly ahead of an estimated 19% CAGR in cost to serve, enabling margin expansion.
EBITDA margins are projected to expand from 59% in FY25 to 68% by FY30. That said, margins in FY26 may temporarily dip to around 85% of FY25 levels due to integration costs.
The brokerage added that Groww's tech-led model should support gradual operating leverage as scale improves.
UBS said its Rs 185 price target represents a discount to Robinhood's long-term average multiple but a premium to peer Angel One, reflecting Groww's scale and execution track record.
However, UBS flagged limited base-case upside at current levels, maintaining a Neutral stance despite the platform's strong positioning in India's retail investing ecosystem.
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