Motilal Oswal Financial Services (MOFSL) has initiated coverage on Groww with a buy rating and a target price of ₹185 per share, implying an upside of around 19% from current levels. The brokerage highlighted Groww’s rapid scale-up into India’s largest retail broking platform and expects the next phase of growth to be driven by improving earnings quality and diversification beyond pure broking revenues.
Groww has emerged as the largest retail broking platform in India within just four years, commanding a 26.8% share of NSE active clients, materially ahead of peers. What began as a zero-revenue mutual fund distribution platform has evolved into a full-stack investing ecosystem, spanning equities, derivatives, commodities, margin trading facility (MTF), credit products, and wealth management. The platform currently serves 14.8 million active users, underpinned by strong organic customer acquisition.
MOFSL believes the key transformation underway is a structural improvement in earnings durability. The brokerage noted that Groww is consciously reducing its reliance on volatile broking revenues by scaling higher-quality and more predictable income streams such as MTF, commodities, loan-against-shares (LAS), loan-against-mutual-funds (LAMF), and wealth management. As a result, broking’s contribution to revenues is expected to decline from 85% in FY25 to around 67% by FY28, even as absolute broking revenues continue to grow.
Motilal Oswal highlighted several structural advantages that differentiate Groww within India’s competitive fintech landscape. The platform enjoys over 80% organic customer acquisition, resulting in a low customer acquisition cost and quick payback periods. Its fully in-house technology stack enables rapid feature deployment and keeps cost-to-serve structurally low. Combined with a fixed-cost-heavy operating model, this provides strong operating leverage, which should increasingly reflect in profitability as revenues scale.
The brokerage outlined multiple growth levers that are expected to unlock the next phase of expansion. Groww’s MTF book stands at ₹17 billion, still at an early stage with roughly 2% market share, but offers high-yield potential with around 15% ARPU uplift. Commodities trading provides incremental broking growth without incremental acquisition costs, while credit offerings monetise over ₹30 billion of assets already on the platform. In wealth management, Groww’s affluent client base—about 0.3 million users holding nearly 33% of platform assets—offers significant monetisation potential, with the Fisdom acquisition accelerating scale and capability in this segment. MOFSL expects these non-broking businesses to drive more resilient and less cyclical earnings over time.
On the financial front, Motilal Oswal forecasts a 25% revenue CAGR, 30% EBITDA CAGR and 30% PAT CAGR over FY25–28E. EBITDA margins are projected to expand from 59% to around 66% by FY28, supported by strong operating leverage and disciplined cost management. Contribution margins are expected to approach 90%, reinforcing Groww’s scalability and profitability profile.
From a valuation perspective, Groww trades at around 22x FY28E P/E, which MOFSL views as attractive relative to global peers such as Robinhood, which trades closer to 40x forward earnings. As the revenue mix shifts towards credit and wealth, the brokerage expects improved earnings durability to support a valuation re-rating.
Disclaimer: The views and recommendations above are those of Motilal Oswal Financial Services. Business Upturn does not endorse them. Please consult a financial advisor before making investment decisions.