Groww shares hit record high today: What's the reason?
What's the story
Stocks of Billionbrains Garage Ventures, the parent company of online brokerage platform Groww, surged 10% to a record high of ₹216 on the Bombay Stock Exchange (BSE) today. The jump came after the firm reported a stellar performance for the March quarter (Q4 FY26), with a whopping 122% year-on-year (YoY) increase in consolidated net profit at ₹686 crore. Revenue from operations also saw an impressive 87% YoY growth to ₹1,505 crore.
Financial highlights
Strong margin expansion
Groww's earnings before interest, taxes, depreciation, and amortization (EBITDA) also saw a massive 142% YoY jump to ₹939 crore. This is a clear indicator of strong margin expansion for the company. The improvement in profitability can be attributed to faster revenue growth outpacing largely fixed costs, signaling operating leverage across segments. Customer assets on the platform grew by 36% YoY to ₹3 lakh crore despite a bit sequential dip due to mark-to-market losses during the quarter.
User engagement
User growth and product performance
In its letter to shareholders, Groww said its total number of transacting users grew 25% YoY to 21.6 million. This includes an active user base of 16.7 million. The company also noted a marginal increase in the contribution of equity derivatives to overall revenue from 53.5% to 54.6%. New product segments like Margin Trading Facility (MTF) and commodities also saw strong traction during this period, contributing significantly to overall revenues due to higher penetration and user adoption rates.
Market response
Brokerages divided on stock with varying target prices
Motilal Oswal has reiterated its 'Buy' rating on Groww shares with a target price of ₹235, suggesting an upside of around 20%. The brokerage firm believes that Groww continues to show strong revenue growth due to rising user adoption and solid activation levels. However, JM Financial has maintained a 'Sell' rating with a target price of ₹150, implying a downside of 23.5%.