Groww shares surge 10%, back near post-listing high after Q3, State Street deal

Shares of Billionbrains Garage Ventures Ltd., the parent company of discount broking platform Groww, were trading up as much as 10% on Friday, January 16. The stock extended its rally after positive brokerage commentary following its December quarter results.

Brokerage firm Motilal Oswal maintained its 'Buy' rating on Groww and revised its price target to ₹190 per share. The brokerage said the company continued to deliver strong revenue growth, driven by rising user adoption across products and robust user activation.

Motilal also said that Groww's broking business is gaining market share across segments, backed by recent product launches such as margin trading facility and commodities, which are contributing to incremental growth.

It added that the rising number of affluent customers is opening up wealth management opportunities, with the ongoing integration of Fisdom expected to further strengthen this segment.

The brokerage raised its FY27 and FY28 EPS estimates by 2% each, factoring in strong expansion in the MTF book and a better than expected rollout of the commodities segment.

State Street invests in Groww AMC

Separately, State Street has announced an investment in Groww AMC. State Street, the world's fourth largest investment manager with $5.5 trillion in assets under management, will invest ₹580 crore in Groww AMC for a 23% stake.

The deal includes a ₹380 crore secondary purchase and a ₹200 crore primary capital infusion into the AMC, while voting rights will be capped at 4.99%, allowing Groww to retain control.

The investment is seen as strategically significant, as it brings global expertise in passive and quantitative strategies to Groww.

The AMC currently manages assets worth ₹4,119 crore. Groww had acquired the AMC from Indiabulls in 2023 for ₹175 crore.

Groww reported a strong performance marked by healthy year-on-year topline growth and rapid expansion in the MTF book. The company recorded its highest number of user additions in a year.

Revenue rose 19% quarter-on-quarter to ₹1,216 crore, while EBITDA increased 20% sequentially to ₹710 crore. Net profit climbed 16% quarter-on-quarter to ₹547 crore, and the MTF book expanded 38% sequentially, aided by market share gains from a low base.

On a year-on-year basis, revenue grew 25% to ₹1,216 crore. EBITDA declined 29% due to a high base in Q3FY25, which had included a one-time reversal of ₹425 crore in long term leadership incentive costs following the company's redomiciling exercise.

Adjusted EBITDA rose 24% to ₹710 crore, while adjusted profit after tax also increased 24% to ₹547 crore.

Shares of Billionbrains Garage Ventures are now trading 7.58% higher at ₹176.80.